STUDY: WAL MART REDUCES NATIONAL WAGES $4.5 BILLION A YEAR

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Retail workers in the U.S. are making $4.5 billion less each year due to
Wal-Mart's presence, according to a new study by the University of
California's Center for Labor Research and Education. 

The study focuses on stores that opened between 1992 and 2000 and
concludes, "Opening a single Wal-Mart store lowers the average retail
wage in the surrounding county between 0.5 and 0.9 percent."

Wal-Mart's presence pushes down wages in two ways. "First is the
substitution effect: a new Wal-Mart store replaces better paying jobs
with lower-paying ones," the authors explain. "A second factor is
competition: Wal-Mart pushes down wages in competing businesses."

Not only did Wal-Mart lower average wage rates, but "every new Wal-Mart
in a county reduced the combined or aggregate earnings of retail workers
by around 1.5 percent." Because this number is higher than the reduction
in average wages, it indicates that Wal-Mart not only lowered pay rates,
but also reduced the total number of retail jobs. That finding is
consistent with a major study published earlier this year that found
that the opening of a Wal-Mart store causes a net loss of about 150
retail jobs.

"At the national level, our study concludes that in 2000, total earnings
of retail workers nationwide were reduced by $4.5 billion due to
Wal-Mart's presence," they find.

Most of these losses were concentrated in metropolitan areas. Although
Wal-Mart is often associated with rural areas, three-quarters of the
stores it built in the 1990s were in metropolitan counties.

Another new study from the UC Center for Labor Research and Education
indicates that Wal-Mart could substantially raise its workers' earnings,
particularly those living at or near poverty, with little impact on most
shoppers. "Living Wage Policies and Wal-Mart" analyzes the effects of
instituting a $10 minimum wage at Wal-Mart. More than half of the
retailer's employees (56%) currently earn less than $10 an hour.

"We find that 46.3 percent of the pay increase would go to workers in
families with total incomes below 200 percent of the federal poverty
level," the study finds. "These poor and low-income workers could expect
to earn an additional $1,020 to $4,640 a year."

http://www.newrules.org/retail/news_slug.php?slugid=365

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