Could Raising the Minimum Wage Kill Walmart?

I have been thinking about the minimum wage today and it occurred to me that the reason the GOP and their backers are so opposed to raising it is that Walmart (the Walton heirs being among the top 10 richest people in the USA, and, taken together, richer than anyone else) has based their entire business model on keeping the minimum wage from being raised.

If the wages they have to pay were enough for people to live on, their employees could get off food stamps, which means there would be fewer food stamps coming into the stores and Walmart is the largest recipient of payments via food stamps. It also means that their employees (who make up a large portion of the food stamp recipients) would be able to afford to shop at other stores, not just at Walmart. So, there would be a double whammy — less food stamps (from employees) AND less employee spending at the store.

The really important part of this, though, is even more subtle.

A major part of what is wrong with America is the lack of job growth, which is mostly fueled by small to medium sized businesses. Walmart has done more to kill those businesses than anyone and they have taken their places in market niche after market niche.

Sure, you CAN buy groceries (for instance) somewhere else — if you want to buy them from Kroger, which is not exactly a mom-and-pop operation, or if you have access to good transportation and time to hunt up the dwindling alternatives.

The same goes for clothing, housewares, and many other retail areas. Walmart (and, to a lesser degree, all the Big Box stores) has locked down their respective slices of the market by being almost-literally the only reasonable choice.

If the huge number of Walmart employees were to receive a living wage (which is what the minimum wage was supposed to be anyway), this would inevitably lead to more money going to smaller businesses, which could grow and hire more people and begin to offer real alternatives to all consumers.

I am sure someone smarter than me can spin out the reasons why this would or would not work. But it seems that raising the minimum wage is the best way possible to wound and, just possibly, kill Walmart — far better than wasting time calling for boycotts that can not succeed while Walmart has so many market niches locked up.

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About Tim Gatewood

55+, male, widowed (May 2016). Mobile notary public and signing agent, freelance writer, and ordained minister. Science fiction and fantasy fan, willing servant to cats, avid reader and collector of books and other stuff. Please see my websites (including this blog and others) for more info on me and what I think about the issues of the day.
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2 Responses to Could Raising the Minimum Wage Kill Walmart?

  1. delmarvausa says:

    For a company that has built an empire on being the cheapest in town, I’d think this could be a huge problem for them. Then again, how many other places would people go?

    Like

  2. delmarvausa says:

    Reblogged this on delmarvausa and commented:
    For a company that has built an empire on being the cheapest in town, I’d think this could be a huge problem for them. Then again, how many other places would people go?

    Like

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