Walmart is a class traitor. That is the core message from an opinion piece in The Wall Street Journal. Headlined More Minimum-Wage Backfires, the unsigned editorial singles out Walmart for threatening the wealth of investors by giving in to the growing minimum-wage movement.
The campaign for higher minimum wages continues to inflict damage on business employees and owners. About the only ones not feeling the pain are the labor unions that back this movement. Meanwhile, in a growing number of U.S. jurisdictions, unions are succeeding in exempting themselves from the laws they seek to impose on everyone else. Wal-Mart announced last week that second quarter operating income was down 10% compared to the same period last year, even as revenue was slightly higher. Wal-Mart, a non-union shop under relentless media pressure to boost compensation, increased its minimum starting wage to $9 per hour in April, $1.75 above the federal minimum. This amounted to a raise for more than 500,000 workers. The company says it is a worthwhile investment that is creating a better, happier workforce and a better customer experience. But—minimum-wage activists, take note—increased compensation costs cannot simply be passed along to consumers at the whim of the company. In conference calls with securities analysts and reporters, company officials made clear that wage hikes are among the factors exerting a negative impact on Wal-Mart’s profits.
This last whine, that increased compensation costs cannot simply be passed along to consumers at the whim of the company, is key. Of course no one with half a brain would expect those costs to be offset by reduced profits! This is America, where profits are more sacred than Christmas. Jeff Hess: Have Coffee Will Write.

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