Should policy makers consider supporting legislation that would raise wages at Walmart? Should they be concerned that low-income shoppers will bear the cost if Walmart is required to increase its minimum wage to $12 an hour?
Our data suggests that a $12 per hour minimum wage standard at Walmart would be effective in aiding lower-income families. If Walmart increased its minimum wage to $12 per hour, 41.4 percent of the income gain would accrue to workers with wages below 200 percent FPL. These low-wage workers could expect to earn an additional $1,670 to $6,500 a year in income.
If Walmart passed on 100 percent of the wage increase to consumers through price increases, which is unlikely, the impact for the average Walmart shopper would be $12.49 a year (Table 6, page 8). We estimate that 28.1 percent of the impact of the price increase would be borne by shoppers with incomes below 200 percent FPL.
Finally, we should consider the impact of a mandated wage increase on the economic viability of big box retailers. Some analysts suggest that Walmart could not just raise wages, and prices, given that it operates in a competitive environment. However, a living wage policy would require all large retailers to operate under the same standards.
Jacobs, Graham-Squire, and Luce | APRIL 2011 7
Defending the Community:
$12.00 an hour minimum wage for large employers in Eureka: