Wal-Mart’s woes revive the debate on the minimum wage in the US

premier-employeur-pays-walmart-drastiquementWalmart created a sensation by raising the pay of its 500,000 employees but seems to regret today that upgrading has sealed its accounts, says the American giant and reopens the debate on the minimum wage in the United States.

Largest employer in the country, the distribution group has drastically revised its earnings expectations Wednesday, pointing to a particular culprit: his salary increase program announced in February and aimed at bringing the minimum wage to 10 dollars, against 7.25 in Federal.

Snatched under pressure from the unions, this boost had snowballed, resulting notably McDonald’s in its wake, when many states [New York …] and cities [Los Angeles, Seattle …] passed also to action to overcome the hostility of Republicans in Congress.

The bad pass Walmart, however, could curb this trend and has also not failed to react the – many – Opponents of a higher minimum wage, which has not been upgraded since 2009 at the federal level.

“The revelation by Walmart that their salary increase program contributes to their disappointing results confirms the undeniable fact that wage growth has a significant impact on even the largest employers,” said AFP Randy Johnson, a officials of the powerful employers’ lobby of the US Chamber of Commerce.

The reasoning is known: companies would put profitability at risk by increasing their employees.

“If even Walmart feels the effects, other employers will certainly have the same problems,” Mr. Johnson in his email.

This argument was immediately used to play at fast-food movement that employees have stepped punch of shares in the United States and always demand a minimum wage increase to $ 15.

Such an increase “will mean no doubt that the use of many people would be in jeopardy,” said Tim Worstall, economist at the Adam Institute in London. “Companies will have to rely heavily on a well-trained workforce […] rather than a larger number of low-skilled workers,” he said in an article published by Forbes magazine.

“Absurd”

Taught by the misadventures of Walmart, large groups will they really slow down not before raising wages? The question is open.

“The companies for whom this has an economic basis shall continue to grant increases,” said AFP Michael Strain, the conservative think tank American Enterprise Institute.

But those that are tempted to do so for reasons of public relations “will think twice,” he added, saying the companies likely to be torn between two approaches: to seduce the general public or pampered shareholders.

“People committed to the social responsibility of companies will say,” you increase salaries voluntarily, it’s great! “. But the business community rather say, “it really is no good profit”, “says Strain.

Experts however, are not of one mind.

Researcher at the Economic Policy Institute in Washington, David Cooper wishes first to relativize the negative impact of the wage boost for Wal-Mart.

“The idea that rising wages threaten the profitability of the company is totally absurd,” said the expert told AFP, noting that the cost of upgrading ($ 1.5 billion) represents only 0, 3% of total Group sales.

“This is just a drop in a vast ocean,” he adds, noting that the poor performance of Wal-Mart also wish to increased competition from online trade and the weight of the strong dollar.

Above all, he and others ensure that the beneficial effects of a wage increase can not be seen in the long-term.

“Investing money on labor may not satisfy short-term investors,” he develops, but it makes sense when the United States are close to full employment.

“There will be more competition to attract and retain the best employees,” says Mr. Cooper. “If they are better paid, they will stay longer and so will save on the high costs associated with replacing employees”.

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