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How a higher minimum wage could help Walmart

Walmart in Chicago. Photo: Tim Boyle/Getty

If Walmart CEO Doug McMillon's public challenge to Congress to raise the federal minimum wage from $7.25 turns into reality, it could be a big boon for the retail giant.

What's happening: McMillon issued his call yesterday at Walmart's annual shareholder's meeting, saying the federal rate was "lagging behind." Among the upsides of such a move for Walmart...

  • A higher minimum would put more money in the pockets of low-income consumers — Walmart's customer base — and potentially boost sales.
  • It also could improve the chain's already-substantial financial advantage, since in many small towns it competes with local businesses for workers and market share. In those cases, a higher minimum wage that the few remaining smaller shops can't afford could kill them, leaving the behemoth as the only game in town.

"Publicly declaring support for raising a minimum wage that is well below what Walmart already pays its workers is a cost-free way for Walmart to appear 'worker-friendly' while remaining staunchly anti-union and maintaining extremely coercive management tactics," says David Huyssen, a historian of capitalism at the U.K.'s University of York.

The backdrop: Walmart pays its workers a minimum of $11 an hour, which, while significantly above the federal minimum wage, is lower than what rivals Target ($13) and Amazon ($15) pay.

  • At the company shareholders' meeting, Sen. Bernie Sanders showed up and accused Walmart of paying "starvation" wages.
  • "Walmart has a serious image problem as an exploitative employer, one that Bernie Sanders' presidential campaign is in the midst of highlighting," Huyssen says.