Chain store influencing public policy -- when does a chain store become too big to displease? It's the neoliberal dreamstate -- government of, by and for the corporate person. In the piece, Marion Barry called it "a stick-up."
Walmart argues that raising the minimum wage will drive employers away, causing unemployment. But raising wages also boosts demand, creating more employment. Card and Kreuger's classic survey showed that minimum wage raises actually increased employment. Even more interesting, Neumark and Wascher showed disemployment effects only in large fast food stores, with a rise in employment among small restaurants.
You can see what's going on. The large corporations disinvest because they are more mobile. They can leave a state with higher wages for a state with lower wages. Small owners are not as mobile, so they are stuck with the higher wages, but eventually reap the benefits of greater demand!
And you can see where this is going. Walmart has already stated that it will disinvest, regardless of greater demand. After all, Walmart depends on low-wage bargain hunters. If wages rise significantly, the higher demand might not be good for their bottom-end offerings. Walmart has an interest not only in low wages to keep their pricing down, but also to maintain its low-income market demand. They promote themselves as offering low prices, but actually they are in the business of creating low incomes to feed their own market. And its model doesn't move upward as it grows. It grows by spreading the bottom. It's an impoverishment model. Their corporate goal is to vastly increase the bottom.
The DC living wage might have been a test case to see the efffects of demand vs employment cost-cutting, but by stating its intention to leave, Walmart shows up front that it will bias the results. So if employment declines, everyone can blame it on Walmart's political ploy.
Capital mobility is another reason to be wary of the neoliberal giant global corporation. Small businesses have to take the pain. Ironically, they also reap the benefit.
But what's more shocking than the impoverishment model that Walmart is admitting to here, is Walmart's threat to public policy-making. When will corporations become so big that we can't say 'no' to them ever again? Think of the consequences for food (Monsanto), the environment, fracking -- it's not just about wages. It's the entire fabric of life.
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