Friday, February 20, 2015

The Greatest Joy In Management Life Is A Reliable Employee: Raising The Minimum Wage

From The Wall Street Journal, Opinion, "Wal-Mart’s Capitalist Payday: The giant retailer raises its minimum wage at a fortuitous time:"
Critics of capitalism promote the myth that businesses will always pay the lowest wage they can get away with. But it’s more accurate to say smart capitalists pay the wages they need to keep employees productive and contributing to growth and higher profits. More often than not this means regularly raising pay to avoid losing the best workers. As anyone who has ever hired someone knows, the greatest joy in management life is a reliable employee.
By raising its minimum pay some 24% above the national minimum wage of $7.25, Wal-Mart will be able to outbid competitors who can’t afford the extra costs. So business self-interest elides with political inoculation.
Wal-Mart’s decision proves that the best way to raise wages is with faster economic growth that creates more demand for labor. Workers can move to better opportunities as more emerge, and their current employers may conclude they have to pay more to keep them. And if the economy is growing faster and sales are rising, most businesses will be able to pay more. None of this requires the visible foot of government.

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