Wal-Mart store closings: The high price of always low prices

Wal-Mart workers and supporters block Jefferson Street as they protest in front of Wal-Mart Neighborhood Market on Nov. 28 in the West Loop in Chicago. (Zbigniew Bzdak/Chicago Tribune/TNS)
Wal-Mart workers and supporters block Jefferson Street as they protest in front of Wal-Mart Neighborhood Market on Nov. 28 in the West Loop in Chicago. (Zbigniew Bzdak/Chicago Tribune/TNS)

It is possible that Wal-Mart is closing stores for repairs. It is much more likely that Wal-Mart is closing stores to silence activism.

According to the LA Times, a Wal-Mart store in Pico Rivera, California is closing for six-12 months purportedly for “plumbing repairs.” Five hundred employees will lose their jobs. They will have to find other ways to survive and feed their families.  Do the stores need to close? Do the repairs necessitate a lengthy shutdown?

“One wouldn’t have to ask why, of the list of 50 ‘plumbing issues’ Wal-Mart provided to the Times dating back to July 2014 for the Pico Rivera store, half were identified as ‘non-emergency’ and involved problems such as leaky urinals and broken toilet handles,” LA Times reporter Michael Hiltzik said. “One wouldn’t have to ask why such problems hadn’t been fixed when the store underwent a $500,000 refurbishment over the last year, during which it didn’t have to be closed — a refurbishment that included the restrooms and the              grocery department.”

So, why is the store closing?

It is not out of the realm of possibilitiy that it is an effort on the part of the corporation to silence the activism of the workers, who have been seeking higher wages and better working conditions. The workers filed a complaint on Monday, April 20, with the National Labor Relations Board.

The workers are part of a national effort to raise the minimum wage — an effort under the name of the “Fight for 15.” On April 15 of this year, protesters across the country gathered to fight for a minimum wage of $15 per hour.

Public support for raising the minimum wage in the United States is overwhelming. A survey by Hart Research Associates and sponsored by The National Employment Law Project showed that 75 percent of Americans support an increase in the minimum wage to $12.50, and 63 percenet supported a raise to $15. The vast majority of Americans, including 53 percent of Republicans, supported raising the minimum wage. So, why hasn’t it happened yet?

A raise to the minimum wage has not occurred because, according to some experts, it would not benefit the economy, or more importantly, those supposedly affected with low wages — the poor.

Economists Thomas MaCurdy and Frank McIntyre of Stanford University conducted a study in which they simulated “the effects of a minimum wage increase in a world with no job loss or decreased profit margins.” Their findings suggested that, while one in four “of the poorest workers gain from an increase in the minimum wage, three in four of the poorest workers lose from shouldering the costs of higher prices resulting from the wage increase.” To be more specific, the economists concluded, “low-families are not necessarily low-income families. So, contrary to conventional wisdom, raising minimum wages poorly targets the poor.”

Dealing with economic issues such as the minimum wage is never without complications. It’s not as simple as deciding that people are worth more than they are currently paid — it’s about the effect it will have on the rest of the economy. Do people deserve to be paid $15 per hour? Absolutely. Will it benefit the individuals it is supposed to benefit while improving the economy? Probably not.

Everyone may deserve to be paid more than the incredibly low minimum wage in this country, but the costs seem to outweigh the benefits at the moment. If three in four of the poorest workers in this country would not benefit from an increase in the minimum wage, what is the point of  raising it?

Perhaps, activists should re-emerge with a different goal in mind before they launch campaigns against Wal-Mart. Wal-Mart is wrong for attempting to silence activism, but workers need to go back to the drawing board to come up with effective solutions that deliver concrete benefits before they can truly create meaningful change.