# Start Here > Guest Forum >  A $10.10 minimum wage would force Walmart to raise prices by exactly one penny

## Boshembechle

Let me preface this by saying that Henry Ford once doubled the wages of his employees so that they could buy his products. It worked out extremely well. 

http://thinkprogress.org/economy/201...m-wage-prices/

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## pcosmar

> Let me preface this by saying that Henry Ford once doubled the wages of his employees so that they could buy his products. It worked out extremely well. 
> 
> http://thinkprogress.org/economy/201...m-wage-prices/


You have absolutely no idea what Walmart pays.

Or how much they would raise prices to maintain their profit margin.

The starting wage here is one of the best in the area. They start above minimum wage. And offer a profit sharing program.
I do know because my wife works there.

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## Boshembechle

> You have absolutely no idea what Walmart pays.
> 
> Or how much they would raise prices to maintain their profit margin.
> 
> The starting wage here is one of the best in the area. They start above minimum wage. And offer a profit sharing program.
> I do know because my wife works there.


Would you pay one penny extra so these employees can get off of food stamps and other programs? Did you even read the article?

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## FloralScent

Get a real job if you don't like how much they're paying you.

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## Boshembechle

> Get a real job if you don't like how much they're paying you.


Deflection, deflection, deflection. Would you or would you not pay one penny extra to get walmart workers off of welfare?

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## pcosmar

> Would you pay one penny extra so these employees can get off of food stamps and other programs?* Did you even read the article?*


Hell no I did not read that crap. (I won't give them the click traffic)
We are not on food stamps. or any other welfare.

we live on very little income.. and it can be done.

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## FloralScent

> Deflection, deflection, deflection. Would you or would you not pay one penny extra to get walmart workers off of welfare?


Nope, and I'd pull the welfare rug out from under everyone else today and let mother nature take it's course. [mod delete]

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## Cabal

> A $10.10 minimum wage would force Walmart to raise prices by exactly one penny


Even if we grant this assessment as factually accurate, the amount is irrelevant. The operative word is force.

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## euphemia

> Would you pay one penny extra so these employees can get off of food stamps and other programs? Did you even read the article?


I read the article.  I saw nothing about employees being on food stamps and other programs.

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## euphemia

> Deflection, deflection, deflection. Would you or would you not pay one penny extra to get walmart workers off of welfare?


How many WalMart workers are on welfare, exactly?

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## jkr

SOLD!

i still wont shop there because of their treatment of the noble land crab, aka hermit crabs!


my friends

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## angelatc

> Let me preface this by saying that Henry Ford once doubled the wages of his employees so that they could buy his products. It worked out extremely well. 
> 
> http://thinkprogress.org/economy/201...m-wage-prices/


But it would force WalMart's smaller competitors to shutter their doors.  Why are you here trying to use the government as a tool for corporations to use to cripple their smaller competitors?

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## FloralScent

> But it would force WalMart's smaller competitors to shutter their doors.  Why are you here trying to use the government as a tool for corporations to use to cripple their smaller competitors?


NeoLibs and NeoCons are both nothing more than corporatists.  It's a multi-pronged attack.

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## angelatc

> NeoLibs and NeoCons are both nothing more than corporatists.  It's a multi-pronged attack.


That's why WalMart usually lobbies *for* minimum wage hikes.  Last I heard they were reviewing the $10.10 figure to decide if they should support it.

Go post that in the ThinkProgress comments, and they'll snarl something like "any business that can't afford to pay their employees $3.00 more an hour doesn't deserve to stay in business anyway."

They are just horrible, nasty people who don't actually care about the working class.

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## Petar

> That's why WalMart usually lobbies *for* minimum wage hikes.  Last I heard they were reviewing the $10.10 figure to decide if they should support it.
> 
> Go post that in the ThinkProgress comments, and they'll snarl something like "any business that can't afford to pay their employees $3.00 more an hour doesn't deserve to stay in business anyway."
> 
> They are just horrible, nasty people who don't actually care about the working class.


True. 

And similar to the scumbag WallMart execs that lobby the government for such tactics...

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## Boshembechle

> How many WalMart workers are on welfare, exactly?


About 15% of Walmart slaves are on the dole.

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## Boshembechle

Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.

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## Cabal

> Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.


Yet by your own admission prices will be made to increase.

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## heavenlyboy34

> Nope, and I'd pull the welfare rug out from under everyone else today and let mother nature take it's course. *[mod delete] would cease to exist within a couple of generations.*


IDK about that.  They seem to have always existed...

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## CaptUSA

> Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.


Um, do you realize that even if you use their poor math, that's 1.4% of everything everyone buys at Walmart?  Not just one penny.

And it would be way more than that anyway since employers don't just pay wages, but taxes on those wages as well.

But let's use the 1.4%...  That means the entire community of Walmart shoppers would be 1.4% poorer since they'd have to pay 1.4% on everything they bought at Walmart.  Do you see that this hurts poor people the most?  If I spend 10K per year shopping at Walmart, I will now have to spend another $140.  That was the $140 I planned on using to get my wife's hair done.

What do you have against hair stylists?!  You want to put them out of business!!!  It's scientific and arithmetic proof that you hate working women!

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## erowe1

> Let me preface this by saying that Henry Ford once doubled the wages of his employees so that they could buy his products. It worked out extremely well.


When you say that it worked out extremely well, that means you must have done a great deal of research learning how it worked out. Please tell us more about this, and what it is that happened that you have in mind when you say it worked out extremely well.

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## erowe1

FWIW, I agree that the argument against MW on the grounds that it will increase prices is not a good one.

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## Quark

> Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.


Possibly the prices won't change, but this will certainly happen. 



But to address your next argument: 

http://econlog.econlib.org/archives/...ce_of_sel.html




> Part of the reason is admittedly my strong prior.  *In the absence of any specific empirical evidence, I am 99%+ sure that a randomly selected demand curve will have a negative slope.*  I hew to this prior even in cases - like demand for illegal drugs or illegal immigration - where a downward-sloping demand curve is ideologically inconvenient for me.  What makes me so sure?  Every purchase I've ever made or considered - and every conversation I've had with other people about every purchase they've ever made or considered





> But suppose you disagree with me on both counts.  Suppose you have a weak prior about the disemployment effects of the minimum wage.  Suppose further that you think that the best empirical work in economics is very good indeed.  Doesn't existing evidence then oblige you to admit that the minimum wage has roughly zero effect on employment?





> 1. The literature on the effect of low-skilled immigration on native wages.  A strong consensus finds that large increases in low-skilled immigration have little effect on low-skilled native wages.  David Card himself is a major contributor here, most famously for his study of the Mariel boatlift.  *These results imply a highly elastic demand curve for low-skilled labor, which in turn implies a large disemployment effect of the minimum wage.*





> This consensus among immigration researchers is so strong that George Borjas titled his dissenting paper "The Labor Demand Curve Is Downward Sloping."  If this were a paper on the minimum wage, readers would assume Borjas was arguing that the labor demand curve is downward-sloping rather than vertical. * Since he's writing about immigration, however, he's actually claiming the labor demand curve is downward-sloping rather than horizontal!*





> 2. The literature on the effect of European labor market regulation. *Most economists who study European labor markets admit that strict labor market regulations are an important cause of high long-term unemployment.  When I ask random European economists, they tell me, "The economics is clear; the problem is politics," meaning that European governments are afraid to embrace the deregulation they know they need to restore full employment. * To be fair, high minimum wages are only one facet of European labor market regulation.  But if you find that one kind of regulation that raises labor costs reduces employment, the reasonable inference to draw is that any regulation that raises labor costs has similar effects - including, of course, the minimum wage.





> 3. *The literature on the effects of price controls in general.* * There are vast empirical literatures studying the effects of price controls of housing (rent control), agriculture (price supports), energy (oil and gas price controls), banking (Regulation Q) etc.  Each of these literatures bolsters the textbook story about the effect of price controls - and therefore ipso facto bolsters the textbook story about the effect of price controls in the labor market.*





> *4. The literature on Keynesian macroeconomics.*  If you're even mildly Keynesian, you know that downward nominal wage rigidity occasionally leads to lots of involuntary unemployment.  If, like most Keynesians, you think that your view is backed by overwhelming empirical evidence, I have a challenge for you:* Explain why market-driven downward nominal wage rigidity leads to unemployment without implying that a government-imposed minimum wage leads to unemployment. * *The challenge is tough because the whole point of the minimum wage is to intensify what Keynesians correctly see as the fundamental cause of unemployment: The failure of nominal wages to fall until the market clears.*

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## Cabal

> FWIW, I agree that the argument against MW on the grounds that it will increase prices is not a good one.


I concur, and a raise in MW doesn't necessarily mean a rise in prices; there are other areas besides prices where the difference can be made up. Essentially, this thread is a straw man.

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## angelatc

And the Ford example is just yet another entirely fabricated liberal lie:

http://www.forbes.com/sites/timworst...hat-you-think/




> It should be obvious that this story doesn’t work:* Boeing would most certainly be in trouble if they had to pay their workers sufficient to afford a new jetliner.* It’s also obviously true that you want every other employer to be paying their workers sufficient that they can afford your products: but that’s very much not the same as claiming that Ford should pay his workers so that they can afford Fords.
> 
> 
> So, if creating that blue collar middle class that could afford the cars wasn’t why Ford brought in his $5 a day wages, what was the reason?
> Actually, it was the turnover of his staff.
> 
> 
> 
> 
> ...

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## MelissaWV

Assuming Henry Ford doubling salaries so people could afford his product worked very well, there are several things to take note of:

1. He is not the Government.  He raised the salaries on his own, and did not actually force every other company --- regardless of product or profit margin --- to raise their salaries.
2. It was a newer product, demanding a higher price, and a novelty that allowed for the possibility of high profits on each product that the company made.  
3. Will you please tell us how many Ford employees at that time ran out and bought a car with their additional wealth?

* * *

No company with more than one product is going to raise all of those products' prices by a penny.  That's ridiculous.  You generally want to raise prices by percentages, making sure that your biggest high-price sellers bear the brunt of the increase (raising your best-selling TV's price by $5 would, in your theory, allow you to keep/reduce prices on 499 other products in the store).

Moreover, as others have pointed out, you are focusing on WalMart.  How much would a small business have to raise their prices to afford to pay a few more dollars an hour?  Most likely they'd just ditch an employee or two and try to make do, or else they'd simply go out of business at some point.

Those who remain employed would face higher prices, offsetting a lot of their higher wages to begin with.  Those who are unemployed are going to find fewer jobs on the market.  Those in the service industry, who rely on tips, are going to have to work their butts off harder to make up the difference between the wage they get and the minimum you're proposing.

And, of course, like every single "raise it to this" argument, you ignore cost of living.  $10.10 per hour is absurdly low for some areas.  For others, it's really damned high.  Instead, you get Federal Government calculations dictating the absolute minimum you can pay someone regardless of where and how they live.

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## angelatc

> Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.


There was no science or arithmetic in your post though.

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## GunnyFreedom

> Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.


You..._really_...have no clue about economics, do you?  I'm sorry, but you simply cannot add a bunch on the left side of the equals sign without changing the right side of the equals sign too.  I don't care if some advanced Marxist philosopher claims it's possible - he or she needs to take a course in basic math too!

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## UtahApocalypse

This is another outcome

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## angelatc

More hilarity about the Ford piece:




> It’s also not true that the offer was of $5 a day in wages. It was all rather more complicated than that:
> 
> 
> The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees’ homes to ensure that they were doing things the “American way.” They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become “Americanized.” Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.


This is what the progressives at ThinkProgress actually advocate for - total control of every single aspect of our lives.

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## angelatc

And here's some math:




> Car production in the year before the pay rise was 170,000, in the year of it 202,000. As we can see above the total labour establishment was only 14,000 anyway. Even if all of his workers bought a car every year it wasn’t going to make any but a marginal difference to the sales of the firm.
> 
> 
> We can go further too. As we’ve seen the rise in the daily wage was from $2.25 to $5 (including the bonuses etc). Say 240 working days in the year and 14,000 workers and we get a rise in the pay bill of  $9 1/4 million over the year. A Model T cost between $550 and $450 (depends on which year we’re talking about). 14,000 cars sold at that price gives us $7 3/4 million to $6 1/4 million in income to the company.
> 
> 
> *It should be obvious that paying the workforce an extra $9 million so that they can then buy $7 million’s worth of company production just isn’t a way to increase your profits. It’s a great way to increase your losses though.*

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## Boshembechle

The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.

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## MelissaWV

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


No, it isn't.

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## GunnyFreedom

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


and then onto unemployment for 30 weeks until their unemployment ran out, and then back on welfare -- more than when the goat-rope started.  You are pushing a policy that will see fewer people employed, more people on welfare, and more people than ever in poverty.  Is that what you are after, making poor people poorer. making middle class people poor, and making rich people richer?  Because that's exactly what you are asking America to do.

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## erowe1

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


No it wouldn't. When you make it illegal to work for less than $10 per hour, then when all these people who would otherwise be working for less than $10 per hour are unemployed, their jobs having just been made illegal by you, then many of them will be on welfare.

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## Cabal

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


Non sequitur

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## Quark

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


That persuades me! If you use the phrase "the fact of that matter" it certainly must be true! I'm very much convinced. Screw basic economics, that stuff is wrong because you know, it's "the fact of that matter."

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## milgram

How many liberal blogs were advocating a $10 minimum wage _before_ Obama started talking about it?

It seems like "grassroots" Democrats support whatever issues are first deemed appropriate in high-level DNC strategy meetings.

The status quo has nothing to fear from this top-down advocacy.

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## amy31416

> About 15% of Walmart slaves are on the dole.


I wonder how many would quit or go part-time just to stay on the dole. Must be a pretty sweet deal to get free healthcare and food while you're working. I'm sure they can figure out the basic math of it and realize that they're better off with slightly lower wages in order to keep their "benefits."

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## pcosmar

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


NO it is  not a fact.

The fact is,,as MW increases, companies close their door and fire people.

Walmart already did that when one area raised the MW.. They closed the doors.. 

It has happened all over this country,, between Union wages and MW companies have moved their production elsewhere.

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## angelatc

> The fact of that matter is that a MW wage increase, at the expense of a penny increase in price, would get people off of welfare.


It has never worked that way in the past.  Why would it be different this time?

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## thequietkid10

Why in the hell is everything about Wal Mart with you people?  You do realize that there are hundreds of box stores and fast food restaurants out there and thousands and thousands of mom and pa restaurants and general stores that would be affected by this minimum wage increase as well?

I'm not a "Social Darwinist" and I'm try and avoid wasting too much time blaming the victim.  But seriously $#@! you 

Let me get on my soap box and tell you a story.

In 2009 I was about ready to finish my degree in Social Studies Education.  However, I failed student teaching, I wasn't ready for it, It was the greatest humiliation and greatest failure of my life.  In my humiliation and youthful ignorance, I left college with only a degree in History.  I graduated in May of 2009.  I spent most of the next two years landscaping for a local amusement park.  then I get job working for a ma and pa take out place.  It is a beautiful well maintained location in one of the rougher parts of Buffalo.  A month later, one of my lines came back, I got a job offer working for a major manufacturing, third shift industrial cleaner making 10.23 an hour, almost full time.  While living with my girlfriend I took night classes and now I have entry level job at a law firm, making 10.85 an hour with virtually unlimited overtime.  

Yes, I benefited tremendously from support from my parents and my girlfriend (now ex).  But I never took food stamps, never took subsides housing, and never took welfare.  The only government benefits I ever got was unemployment for the first winter as a landscaper and from late October to January (when I got my delivery boy job)

I could not be less sympathetic to the sob stories from people working at some minimum wage job for five, six, seven years.  Or the sob stories about someone who has been unemployed for six plus months.  Especially someone in their 30s, 40s or 50s   If it is that important that you make more money.  Get off your ass and make something of yourself!

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## oyarde

> Let me preface this by saying that Henry Ford once doubled the wages of his employees so that they could buy his products. It worked out extremely well. 
> 
> http://thinkprogress.org/economy/201...m-wage-prices/


I could give a crap about Walmart. What it will do is eliminate another job for a 15 to 17 yr old kid who needs it at a small business.Anyone who supports it is a $#@!stick.

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## Natural Citizen

> Why are you here trying to use the government as a tool for corporations to use to cripple their smaller competitors?


You baffle the heck out me sometimes, woman.

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## pcosmar

> Why in the hell is everything about Wal Mart with you people?


Because the Unions are pushing to get their hooks in the largest retailer. 

WalMart has the highest visibility,, so they are the target.

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## osan

> Let me also say that I posted this not as an indictment of walmart, but as a scientific and arithmetic refutation of the absurd lie that MW increases will cause price increases.


You are missing the central point, which as Cabal mentioned is "force".  Walmart is a private entity.  Who holds the authority to force them to pay a minimum wage?  Nobody.  If you do not like the offered wage, look elsewhere for work.  Nobody is entitled to a position at Walmart or any other place of employment.  A minimum wage is an entitlement enforced by so-called "government" upon the parties to private contracts (employers and employees).  "Government" has no rightful authority to put its nose in such business.

It is irrelevant whether increases in minimum wave increases prices.  What is relevant is the fact that neither you nor anyone else holds the least moral authority to force a private business entity to pay a minimum hourly wage.  If you think otherwise, you will have an impossibly tall order presenting a valid and true proof of the claim.  But if you think you have the chops, please enlighten us.  But beware that several of the people here are crackerjack analysts and will slice and dice your argument until it is naught but a burning wreck on its way to brunch with Davey Jones.  You will be needing your AAA-game.

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## oldietech

I am sure Walmart is already squeezing that 1 penny.  What makes you think they are leaving anything on the table as far as their prices in the first place? 

Basic economics.  Price fixing has all sorts of unintended consequences.  Price discovery is a market function.  Not something that people who feel sorry for other people mandate their government to do.  

The last thing that any one working at walmart needs is to have the government force their employer to pay a welfare tax directly to the employees.

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## 56ktarget

You're right, lets pay workers 1 cent per month, that way unemployment can drop to 0%.

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