Minimum Wages Hurt the Poor
Walmart as an example:
“… while the company’s revenues seem high, Walmart’s profit margin is far from fat: a mere 3 percent. The company has billions in expenses every year—so significant that in a 31-day month, all its sales in the first 30 days go toward paying expenses. Only on the 31st day does the company actually turn a profit, assuming nothing goes wrong during that month—like an unexpected jump in wages.
Just like any other firm, Walmart employs individuals who will earn the company revenue. After pay increases early this year, the average full-time Walmart employee will earn $13.38 per hour, well above the industry average of $10.29. With other benefits, including short-term disability and paid time off, the company’s actual cost per employee is significantly higher.
That Walmart pays an average of $13.38 an hour plus benefits means it expects the average employee to earn the company more than that amount. While a jump in pay of just a few dollars may seem trivial, for a company that employs 1.4 million domestic employees, it is positively massive. This is not to mention the additional costs associated with taxes paid for each employee. With such thin profit margins, Walmart cannot afford to ignore these costs.
As the cost of employing workers increases, Walmart has to decide whether its current workforce is worth the price. For example, if a worker’s hourly wage plus benefits is $30 per hour, but he or she generates only $25 in revenue, the company loses money for every hour the employee works. Under those circumstances, it would benefit the company and its shareholders to lay off workers. It has nothing to do with “corporate greed.” It’s business. Firms can’t operate at a loss.”
It really is simple. If the government forces employers to pay workers more than those workers make for the company, the company will either stop employing them or go broke. There’s no point whining about reality. No one owes you a job. If you don’t want to work for yourself, get a job by proving to an employer that you will make more than you cost.