Rising income inequality and wage stagnation threaten the
future of America’s middle class. While corporate profits
break records, the share of national income going to
workers’ wages has reached record lows.
Wal-Mart plays a leading role in this story. Its business
model has long relied upon strictly controlled labor costs:
low wages, inconsiderable benefits and aggressive avoidance
of collective bargaining with its employees. As the largest
private-sector employer in the U.S., Wal-Mart’s business
model exerts considerable downward pressure on wages
throughout the retail sector and the broader economy. This
model has multiplied across the sector. While employers like
Wal-Mart seek to reap significant profits through the
depression of labor costs, the social costs of this low-wage
strategy are externalized. Low wages not only harm workers
and their families – they cost taxpayers.
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