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Why Raising Walmart Wages Helps The Economy

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Walmart CEO Michael Duke’s $35 million annual salary constitutes an hourly wage equal to the annual salary of the average Walmart employee. — Jonathon Turley

Walmart tops the “leading retailer by employment chart” with over 2 million employees — next on the list is Target with only 365,000.  Today Walmart workers will go on strike to demand fair wages among other issues. A study by Demos reports that “Retail jobs are a crucial source of income for the families of workers in the sector, yet currently more than 1 million retail workers and their family members live in or near poverty.3 More than 95 percent of year-round employees at large retail firms are ages 20 and above. More than half (54.2 percent) of workers in this group contribute at least 50 percent of their family’s total income. A large number of them – almost 1 in 5 – are the sole earner for their family…according to the Bureau of Labor Statistics, the typical retail sales person earns just $21,000 per year. Cashiers earn even less, bringing home an annual income of just $18,500.2 …” Jonathon Turley reports that “new Walmart employees are paid $8.75 an hour — a gross salary of $13,650 a year.”

If the base salary for retail workers was raised to $25,000:

The Demos survey found:

  • A wage standard equivalent to $25,000 for a full-time, year-round employee would lift 734,075 people currently in poverty – including retail workers and the families they support – above the federal poverty line.
  • An additional 769,191 people hovering just above poverty would see their incomes rise to above 150 percent of the poverty line.

…The economy would grow and 100,000 or more new jobs would be created.Families living in or near poverty spend close to 100 percent of their income just to meet their basic needs, so when they receive an extra dollar in pay, they spend it on goods or services that were out of reach before. This ongoing unmet need makes low-income households more likely to spend new earnings immediately – channeling any addition to their income right back into the economy, creating growth and jobs. This “multiplier effect” means that a higher wage standard for retail workers will also generate new jobs.”

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