Wal-Martnomics is a Distraction from the Real Problem of What to do with Unskilled Labor


Wednesday of last week, the DC city council approved a bill that would require certain large retailers to pay employees a “living wage” of $12.50 an hour, which is 50% higher than the city’s minimum wage of $8.25. After the bill passed, Wal-Mart officials announced that they were scrapping plans to build three new stores in the city.

Predictably, this has led to plenty of outcries from both sides about how the other guys aren’t playing fair. It appears that the city council was specifically aiming the legislation at Wal-Mart: The rule applies to retailers with corporate sales of $1 billion or more that operate in spaces over 75,000 square feet, excluding stores like Starbucks and Apple (two companies with higher profit margins and which cater to a much higher-income clientele, ironically).

Although many soi-disant “social commentators” are all-too-eager to take to snarkily bloviating on the Internet about Wal-Mart (or any corporation that doesn’t build cell phones), much of the opposition to Wal-Mart isn’t hard to understand. In the 90s and 2000s, the company completely changed the economics of retailing, which put a lot of pressure on small businesses to either try to compete on prices or shift their business models away from easy general retailing and toward the more difficult strategy of selling specialized products and services.

And on the other side, you’re Wal-Mart, and you have no idea if any given job applicant is an outstanding worker or the kind of employee who rolls their eyes at customers and calls in sick every other week. You’re reading Randy Truckerhat’s application for a stock-boy position and you see he’s left his previous two jobs after just three months. Now, you may well be willing to give him a chance at $330/week, but if he demanded $500, you’d be ready to release the hounds.

If some city council member says you have to give it to him, you’d go balls-out Galt on that city.

But both of those fair points aside, the bigger issue we’re really talking about when we condemn Wal-Mart or living wages is this: what the hell are we going to do with unskilled/low-skilled labor?

Manufacturing, on any scale that provides jobs for large numbers of the educationally un-credentialed, is not coming back to America. Unions are all but totally irrelevant in the 21st-century economy. College wasn’t the panacea everyone thought it would be. Marriage rates are falling for lower income groups, so the working poor aren’t even pooling their resources. Immigrants are paradoxically “taking the jobs” that “no Americans will do anyway,” however that works.

And, though Wal-Mart brings jobs, puts downward pressure on the price of consumer goods, and often stimulates more retail investment via building new stripmalls nearby, it unquestionably disrupts local business communities and has put many mom-and-pops out of business. The unemployment rate is slowly falling, but the employment level of 25–54-year-old men has been stagnant since 2008, and disability enrollments are up.

The future of American workers who lack the skills for the knowledge economy is a huge, huge problem that, in addition to entitlement reform and the country’s batshit financial shape, milennials are going to have to deal with, whether Wal-Mart is here—or is the solution to that problem—or not.

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