Wal-Mart hiked wages effective in April, with more to come by next year. Already they're reporting two important features of the new policy: lower turnover and an increase in the volume of applications. Since training new employees is expensive and time consuming, it sounds like this could be to the firm's advantage. It's difficult to say for sure without actually seeing the accounting documents, of course. And differential training cost estimates are not mandatory 10-k filings, so it's likely I'll never be able to really say for sure.
But what I can say for sure is that if the Reuters report is accurate, there have been quite a few disappointed applicants since April. For the folks who find a job and keep it, the wage increases are wonderful. But for the folks who never even get called back, well, they are obliged to look elsewhere. The benefit to incumbents comes at the expense of aspirants.
And that's fine. That's Wal-Mart's concern. They are in the business of selling consumer products to customers. They are not a works project, they are not a charity. Any in-house hiring or wage rate decisions they make are reflected in their marketplace performance. I certainly don't know how to run Wal-Mart any better than the residual claimants of the firm or their agents. And anyone who claims otherwise should probably be viewed with a great deal of skepticism. What I do know is that we should also be skeptical of claims that the entire labor market can follow this example and expect to flourish. If someone isn't worth hiring at Wal-Mart at nine bucks an hour, it's likely they're not worth hiring at Tom's Tobacco Hut at nine bucks an hour. He needs to have a way to bid down his asking wage, and with minimum wage statutes in place, that's malum prohibitium illegal.
Work is not euvoluntary for the least productive members of society. It's worth remembering that when we petition the state to price them out of work entirely.
Price is very affordable only if the services are worth enough for the pay.
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