Killing the Working Class at Wal-Mart

Daily News Article - February 8, 2016


NOTE: In place of a news story, for today’s “Daily News Article” category we have posted a commentary as a follow-up to last Monday’s Daily News Article on Walmart’s store closings across the country. This commentary presents ideas that are not widely reported on but are important to consider.

1. Who is Andy Puzder?

2. What effect does Mr. Puzder say an increased minimum wage has on employees?

3. What did Walmart cite as the first factor it looked at when deciding which stores to close?

4. What is your reaction to each of the following assertions/explanations about increased minimum wage made by Mr. Puzder in this commentary?

a) From paragraph 4:

Every retailer has locations that are profitable, but only marginally. Increased labor costs can push these stores over the line and into the loss column. When that happens, companies that want to stay competitive will close them. That’s one of the reasons that substantially increasing the minimum wage poses real risks for working-class Americans.

b) From para. 8-9:

It’s harder to count the jobs that were never created in the first place because of the minimum wage. But here’s an anecdote: Wal-Mart also canceled plans to build two stores in Washington, D.C., where the minimum wage is $10.50 and rising to $11.50 in July. A November ballot initiative could bring it to $15.

Councilman Jack Evans, who sits on the district government’s finance committee, reported, according to the Washington Post, that in closed-door meetings Wal-Mart “cited the District’s rising minimum wage”—as well as proposals to force employers to provide paid family leave and a minimum number of hours for hourly employees—as a reason to pull out.

c) From para. 10:

D.C. Mayor Muriel Bowser said she was “blood mad” about the store cancellations, but she shares the blame as one who supported raising the minimum wage. Perhaps she understands this better than she lets on, as she has declined to endorse the proposed increase to $15.

5. In para. 11, Mr. Puzder explains:

In the face of increasing competition from online retailers such as Amazon, traditional stores like Wal-Mart are minimizing expenses to stay competitive. Substantial minimum-wage increases make the belt much tighter.

He asserts:

But businesses that fail to adjust to a changing environment might cease to exist or shrink to mere shadows. This is a reality that progressive groups and legislators may choose to ignore, but businesses do so at their peril. Ask Borders bookstores or Blockbuster video.

Ask a parent: Do you think this is a reasonable assertion? Explain your answer.

6. Mr. Puzder concludes his commentary with the following suggestion/solution:

Jobs, salaries and benefits increase when businesses thrive. If you want to give working-class Americans a path to the middle class, adopt policies that free up the businesses who want to hire them. Otherwise, you’ve merely priced people out of a job.

a) Do you agree with Mr. Puzder? Explain your answer.
b) Ask a parent or grandparent the same question.