By Paul Jacob
Sunday, August 18, 2013
The left’s war on Walmart ramped up a notch a few weeks
ago, when a higher-up in the Bentonville, Arkansas, company let loose with an
email defending the big box store’s wage policies.
As reported at The Daily Beast, Steve Restivo, “a senior
director of communications at Walmart,” took umbrage with an online campaign at
the progressive magazine The Nation, blurbing an email with the subject line
“people in glass houses.”
Restivo effectively deflected a few stones.
The Nation’s campaign was designed to rally protest
against the low wages paid at Walmart — to bring up the average wage way above
the national minimum. Restivo’s email noted, on the other hand, that wage
policies at the august journal suffered a bigger embarrassment:
The Nation — “America’s leading progressive print and online magazine”— recently encouraged its readers to sign an open letter demanding that Walmart increase wages to $12/hour and this article called our company one of the “biggest abusers of low-wage labor.” In an ironic twist, ProPublica recently reported that starting this fall, “interns at the Nation Institute will be paid minimum wage for the first time in the history of the 30-year-old program.” As ProPublica noted, The Nation has been paying its full-time interns a weekly stipend of $150 per week — less than the current federal minimum wage rate of $7.25 per hour.
Furthermore, Reason’s Katherine Mangu-Ward archly noted
that the foundation funding The Nation’s internship program, in planning to up
the compensation for said interns, expects to employ two fewer than previously.
Exactly. When prices and profits remain unchanged, but one input’s costs rise,
you make do with less of that input. This is a classic case against the minimum
wage: artificially raise the wages and fewer workers will be employed at the
higher rate.
Something’s gotta give. Businesses don’t run on magic and
wishful thinking.
At Common Sense I made two additional points against The
Nation’s oh-so-typical swipe at the big box store:
1. The Nation writes as if Walmart employees are victims of stinginess. But these workers choose to work at the big company because that company offers them the best deal. If some other company were offering more, they’d work elsewhere. Are they victims or victors? After all, what would Walmart workers’ wages be if Walmart hadn’t employed them? More? Not plausible. Plus, Walmart’s mom-and-pop competition typically pay lower wages. Almost never do leftist critics mention the possibility that Walmart, if forced to pay higher wages by law or social pressure, might choose different (perhaps higher-skilled) workers. Like in most discussions of the minimum wage, leftists (and even left-leaning centrists) blank out on the issue of opportunity cost, supporting policies that might as well be designed to hurt most the people they say they aim to help.2. The Nation makes much of the concept of a “living wage,” focusing on the idea of a Walmart worker supporting a typical “family of four.” If you imagine yourself as benevolent overlord, this perspective can seem awfully persuasive. Then you realize that you aren’t an overlord, your benevolence is probably more fantasy than reality, and the whole perspective is ineffectual. Markets aren’t run by overlords. After all, whose responsibility is it to feed “a family of four”? The employer of one family member? No. The parents in the family, who might be morally compelled to develop more lucrative skills or a plan for contraception or abstinence. Of course, many Walmart workers are single, or have spouses or parents who work as well — thus obviating the alleged compulsion that Walmart set wages that would, in every case, allow one person to support three dependents.
Lurking behind the critique of Walmart is a strange view
of business. . . . very old-fashioned. It is almost as if progressives see big
businesses as little different from slave plantations. When the masters treat
the slaves well, then left-leaning critics might give them a pass. But when the
masters don’t meet up to some imposed standard, then the masters are said to be
evil.
To the left, employers remain “masters.” And workers
remain “slaves.” The terms of the wage contracts that would prove otherwise get
little or no respect. You can tell by progressives’ willingness to override or
prohibit any contract they don’t approve of.
This weird institutional bias seems to dominate leftist
imagination. The institutions are there to employ workers, and they are under
obligations more specific than merely living up to their contracts. The reason
to treat workers well is entirely a matter of “morality,” of “humanity,” and
not business sense or contract. That is, the only reason businesses do not
drain and drink the blood of their employees is because governments, urged by
well-meaning activists, prohibit such acts.
Not mentioned? The business reasons contra-indicating the
draining of employee blood.
The bias assumes radical inequality: Workers have few
obligations; employers have many. And yet every wage contract is between two
parties. Both have some negotiating room. Both can reject offers. It is
commonly said that businesses have more options than workers do, considering
competition amongst laborers, but that depends on skill levels, and time and place.
Generally, the higher the skill set of a worker, the higher the pay — and the
more options. It’s related to productivity, to something economists call
“marginal product,” but apparently no wants to talk about that. Even ignoring
productivity, just looking at the numbers game of supply and demand
competition, the more employers there are the more workers will bid up wages
(that’s one reason why most wages aren’t as low as they are at Walmart, or its
competitors).
So you might think that those who say they want higher
wages would try to minimize the obstacles to business formations and capital
accumulation.
But you’d be wrong.
Indeed, they take the opposite approach: attack
successful big businesses as a sort of compensation to help more struggling
businesses. Whether from the desks of The Nation or the geniuses in the
District of Columbia’s ruling body (who have recently been favoring some big
box stores over others), the demand of the moment is for the bigger outfits to
pay wages substantially higher than smaller businesses would be forced to pay.
This, they reason, might help favor the small at the expense of the big.
Maybe. But it’s not the only effect of the policy.
Raising the costs to the successful stores means that the
lower prices offered by those stores will not so effectively reach the mass of
consumers, many of whom are poor. Indeed, considering the effects on consumer
prices of the left’s obsession with big box stores, I have to wonder: who
really is being served by all this?
As near as I can make out, only the progressives
themselves. Their desire to interpose between producer and worker, consumer and
producer, shows no consistency other than that of a meddler, a puritanical
scold who “always knows best.”
But does fewer people working at higher wages paying
higher prices for goods make any sense?
Not if you’re poor.
But it does feed the eternal “progressive” love for
progressively larger government.
No comments:
Post a Comment