We have defended Wal-Mart when its property rights have been attacked by governments and activists. But the retail behemoth deserves criticism when it uses its immense clout to itself manipulate government. An example of the latter is being advanced by Wal-Mart’s CEO, H. Lee Scott Jr.
On Monday, he said Wal-Mart would throw its weight behind raising the federal minimum wage, currently $5.15 per hour.
“While it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families,” Mr. Scott was quoted in CNN/Money online. “Wal-Mart maintains that it pays above the current $5.15 an hour minimum wage to its employees,” CNN/Money online reported.
If Congress acted on Wal-Mart’s recommendation, it would mean “using the government to combat its market competition,” Tim Kane, a Heritage Foundation economist who has written often on the issue, told us. “Wal-Mart would outprice all of the mom-and-pop stores out there,” that currently pay the minimum wage to many employees. “It’s a pretty rotten thing to do.”
In addition, Mr. Kane pointed out, most studies show that minimum-wage hikes actually kill jobs. When the wage goes up, companies fire workers or develop automation to hold the line on costs.
Wal-Mart should drop this stance and instead adopt a 100 percent free-market philosophy.