Here's How You Know Wages Are Too Low

A blog about business and economics.
Nov. 18 2013 1:11 PM

Here's How You Know Wages Are Too Low

179603974
Anti-Walmart campaigners in Miami.

Photo by Joe Raedle/Getty Images

Here's a shocking image brought to us by Scott Keyes. Walmart is organizing a food drive to deliver food to its own needy employees:

1384798224

Courtesy of Scott Keyes

I won't comment on the specific corporate politics here, but that's about as solid an indicator you could imagine of the economywide problem that economywide wages are too low. Look at it from Walmart's perspective? Suppose low-skilled workers in this country on the whole made somewhat more money. What would they do? Well as Walmart indicates with this sign, one thing they'd do is buy more groceries. And where would they buy the groceries? Well, many of them would buy them at Walmart—America's leading grocer.

Advertisement

Of course any particular company can improve its own bottom line by cutting compensation to the bone. But corporate America as a whole has been so successful in squeezing the labor share of national income lower and lower that it's become a substantial constraint to businesses' ability to sell things to people. The cycle of low wages, low demand, weak hiring, weak bargaining power, and low wages just keeps grinding on.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

Two Damn Good, Very Different Movies About Soldiers Returning From War

The XX Factor

Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough

So they added a little self-immolation.

Politics

Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Weigel
Sept. 20 2014 11:13 AM -30-
  Business
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
  Life
Quora
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
  Arts
Brow Beat
Sept. 20 2014 3:21 PM “The More You Know (About Black People)” Uses Very Funny PSAs to Condemn Black Stereotypes
  Technology
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 21 2014 8:00 AM An Astronaut’s Guided Video Tour of Earth
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.