 |
| source |
Lately it has become popular to talk about how Walmart pays its employees so little that they have to organize food drives for themselves and depend on public assistance, burdening taxpayers. Journalists have railed against Walmart's moral depravity for providing such low compensation. Set aside questions about how to define "low" wages (e.g., why do so many people apply for these low-wage jobs? How do they stack up in international context? etc.). Even if we all agree to call Walmart's wages "low," the system of morality that is motivating these attacks is puzzling. If paying low wages is a sin, it's a sin of omission--and we're all guilty.
Walmart employs 1.2 million people in the US, more than any other private firm. Why is Walmart any more obligated to pay high wages to 1.2 million people than you or I? Does Walmart's decision to provide jobs for these people automatically obligate them to provide pay above a certain level?
What makes this complicated is that you, these journalists, and I employ zero people (or close enough by comparison), which means we effectively pay 1.2 million people a wage of $0/hour.
Walmart critics embrace two moral standards: in the first, morality requires payment of high wages to 1.2 million people. In the second, morality can be achieved without employing anyone at all--that is, by paying zero wages. Most of us have chosen to live by the second standard, and from our lofty moral position we can criticize Walmart for not meeting the first standard. How convenient!
In other words, according to the system of morality embraced by the Walmart critics, Walmart could "rise" to our level of morality by either (a) raising pay to some arbitrary level preferred by the critics or (b) reducing the wages of their 1.2M employees to $0/hour, thus choosing the standard of morality that the rest of us prefer to apply to ourselves. Of course, option (b) means that those employees would leave Walmart--but that's the point. Then Walmart would be equivalent to us. Somehow I don't think the workers would be any better off, and it seems likely that even more costs would be passed to taxpayers as the ranks of the unemployed swell, but at least then the Walmart shareholders would no longer be the target of the critics and could instead join us in sanctimoniously raising awareness of some other huge employer's moral depravity.
It's a funny sort of logic that says that Walmart "transfers" poverty assistance costs to taxpayers by paying workers less than some journalist thinks they should be paid. On an employment-weighted basis, Walmart is less guilty of paying low wages than is anyone else on the planet. If taxpayers have an obligation to provide a safety net (and I think we do), then the system works exactly as it should: Walmart pays people an amount roughly requisite with their marginal contribution to the firm's revenue, keeping them off of unemployment and enabling the miracle that is the Walmart business model to deliver goods to the poor and middle class at prices lower than they would otherwise be. Meanwhile, the government picks up the residual of the workers' needs. It's just as accurate to say that Walmart is picking up part of the tab for the safety net (by providing jobs for the otherwise unemployed, not to mention low prices) as it is to say that taxpayers are picking up part of the tab for Walmart wage policies. The two statements describe the same reality.
This is the social safety net. This is the setup that progressives have demanded, yet they complain when it is used. Focus on making a more efficient and effective safety net, and let Walmart make its own factor payment decisions.