Wal-Mart, Other Big Corporations Not Opposing Minimum Wage Hikes


Wal-Mart has joined the growing number of large corporations declining to oppose raising the federal minimum wage.

In the wake of increasing pressure from labor groups and Democrats, calling for substantial increases in hourly pay standards, Wal-Mart U.S. President Bill Simon has reiterated the company’s position on the current initiative to raise the federal minimum wage from $7.25 to $10.10 an hour.

“We are not opposed to minimum wage increase, unless it’s directed exclusively at us,” he noted, referring to an attempt by the District of Columbia city council to require big retailers to pay a $12.50 an hour starting wage instead of the city’s minimum.

Recently, the CEOs of Panera Bread, Subway, and Gap have all either endorsed a higher minimum wage or taken an ambivalent stance, emphasizing that they do not oppose the hikes as long as they are applied equally among the business community.

While mandated wage bumps will impact the nation’s largest employers’ bottom line, bigger companies will be able to absorb the costs far better than smaller competitors, explained Aloysius Hogan, a senior fellow at the free-market Competitive Enterprise Institute.

“There is a competitive advantage to being a huge established company,” Hogan told The Daily Caller News Foundation. “You have the wherewithal to deal with extra costs whereas smaller business may not.”

And not only will forcing companies to hike wages make it tougher for smaller businesses, “but you are raising the barrier to entry for potential new businesses,” he warned.

This is a major concern for the members of the National Federation of Independent Businesses, says Ashley Fingarson, the organization’s Manager of Legislative Affairs.

She told TheDCNF that small businesses “just do not have the profit margins to absorb these costs.”

Unlike some large companies, “They don’t have the capacity to handle everything that is being thrown at them at a federal and state level.”

If an increase in the federal minimum wage becomes a reality, small businesses will be faced with few options, says Fingarson.

She explained that small businesses “will either have to raise prices on consumers or trim their staff to pay their employees a higher wage rate.”

Small businesses employ nearly half of the private-sector workforce and have created almost two-thirds of nation’s net new jobs over the past decade and a half.

The nonpartisan Congressional Budget Office has also estimated that the Obama Administration-backed wage hike to $10.10 an hour would cost Americans 500,000 jobs.

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