No company has symbolized the new economy more than Wal-Mart. Its pioneering use of hi-tech information systems to order just enough inventory at just the right time has set the standard for how big box retailers operate. Its control of offshore suppliers coincided with the decline in American manufacturing. And its low prices have crushed competitors too small to keep up.

This has made Wal-Mart the world’s largest private employer, with 1.3 million employees in the United States alone, roughly 1 percent of the workforce. That’s also true in Maine, where Wal-Mart is the second leading employer.

So, when Wal-Mart does anything, it’s a big deal, and last week’s announcement that no worker would earn less than $9 per hour will be good news if it ripples through other businesses like Wal-Mart’s earlier innovations.


Since Wal-Mart is not a philanthropic organization, its move could be a sign that the declining unemployment rate combined with economic growth is finally putting some upward pressure on Wal-Mart, which according to some reports has had difficulty finding enough people to staff its stores. Other businesses are experiencing the same pressure, which could lead to much-needed across-the board increase in wages, which were stagnant even before the recession.

But Wal-Mart’s move should not be seen as a sign that we don’t need a higher minimum wage. It’s just the opposite: Wal-Mart has shown that the minimum wage is inadequate. People can’t live on so little, and that is a drag on economy.

Congress has not raised the federal minimum wage of $7.25 since 2007. Maine’s minimum wage is $7.50 an hour; people who earn it gross only $15,600 a year, below the poverty line for a single parent with one child — and that’s if they never get sick or take a day off. Even Wal-Mart’s new $9 minimum would not be enough to lift a breadwinner in a family of three out of poverty.

And all of these calculations assume that all these low-wage workers are getting full-time hours. That would be a mistake.

By some estimates, about one-third of Wal-Mart workers are part timers. Using the company’s definition of less than 24 hours per week, a part-timer making $9 per hour would gross no more than $11,200, which is under the poverty line for an individual.

Maine’s unemployment rate has dropped during the past few years, but the number of “involuntary part-time” workers has climbed, comprising 6 percent of the workforce in 2013. These are people who may qualify for food stamps or heating assistance even though they have jobs, and are one medical emergency or car breakdown away from being completely destitute. These are people who need help, and they are the ones who would benefit from an increase in the minimum wage.


Despite heavy lobbying from the service industry, an increased minimum wage remains popular across the nation. Alaska, Arkansas, Nebraska and South Dakota, hardly liberal bastions, approved voter-initiated increases to the state minimum wage last year. In Maine, Portland and Bangor are exploring a local wage above the state minimum. But lawmakers in Augusta and Washington don’t seem likely to break the logjam and give our poorest workers a raise.

Wal-Mart has made a step in the right direction, and its size and status as an industry leader make us hopeful that other businesses will follow in the competition for good workers.

Wal-Mart’s decision should be good for the company, but to spread the benefit throughout the rest of the economy, we need the state and federal governments to act.


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