On Black Friday, thousands of Walmart workers across the country went on strike, demanding a living wage and a right to form a union. This situation was not unique to Walmart alone: in New York City this past week, employees from several different fast-food chains, including McDonald's and Burger King, skipped work and joined a picket line as well.
These strikes are indicative of a larger trend that has been taking place for quite some time. Due to the rise in free trade over the past 30 years, countless skilled manufacturing jobs that payed well in America have been outsourced overseas. As a result, the economy has shifted from being primarily manufacturing-oriented to more service-based.
In a vacuum, that is not bad in theory. There should be a balanced mix of both manufacturing and service industries in a well-performing economy. However, this shift has gone way too far.
Too many factories have closed, leading to the decimation of local economies all across the country. To fill the void, multinational corporations such as Walmart move in, but this forces small businesses on Main Street to shut down because they cannot afford to compete with a behemoth that pays near-slave wages for production labor overseas, and doesn’t have to pay tariffs to sell those products in America.
To add insult to injury, Walmart pays a vast majority of their workers minimum wage. Granted, that is all well and good for part-time help, but many employees at Walmart work there full-time and cannot support their families, let alone themselves, on that salary. Despite the minimum wage being raised periodically, this is still not enough to account for the rise in inflation and cost of living. According to the National Low Income Housing Coalition, a full-time job that pays minimum wage is not enough in any state to afford fair market rent for a two-bedroom apartment.
This forces minimum-wage, full-time employees to rely on food stamps and welfare to make ends meet. Meanwhile, the American taxpayer is subsidizing Walmart in more ways than one. Not only are taxpayers footing the bill on public assistance to employees of Walmart, but Walmart receives billions of dollars in tax breaks a year from outsourcing production overseas.
Not to mention the fact that Walmart’s CEO, Michael Duke, makes $17.6 million a year (to put that in perspective, he makes more in an hour than his employees earn in a year), and that Walmart rakes in $405 billion annually in sales. Certainly, Walmart could afford to pay their workers more.
In addition, according to a study done at UC Berkeley, researchers found that if Walmart raised their minimum wage to $12 an hour, shoppers would only pay an average of 46 cents more per trip if the increase were passed on to them.
Of course I can go on from here about the why a protectionist policy is best for the American economy, how outsourcing tax loopholes need to be closed, and how the tax code and the minimum wage need to be indexed to inflation and geographic cost of living, but I have already explored these issues in great detail in many of my other pieces over the years:
What I am calling for is Walmart to allow their workers to unionize. This will allow full-time employees to negotiate for, and earn, a living wage while sparing taxpayers the bill. Ultimately, this will help lift many working families out of poverty and put more money in the pocket of the consumer, creating more demand, leading to more jobs and a better economy as a whole.