Will the end of low wages bring higher prices?

Krissy Clark, from Marketplace, and Andrew Bouvé, from Slate, have a look at what would happen if Wal Mart raised wages to its workers enough to make it a living wage:


Their conclusion: not a whole lot. Wal Mart would have to raise the hourly wage for its salaried employees to $13.63/hour, for a total cost of $4.8 billion annually. This might sound like a lot of money, and it is, but Wal Mart had a $17 billion profit last year alone, and that´s after spending $15 billion on stock buybacks to make its shareholders happy.

Even without reducing its profits one dime, the reports find that the retail chain would only have to raise prices on its stores by 1.4% to cover the increase in wages.

The video is part of a wonderful series from Marketplace, "The Secret Life of a Food Stamp", giving an in depth look on how companies like Wal Mart rely on public benefits both to make money and to pay workers low wages. Make sure to have a look.

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