Wal-Mart & Catholic Social Teaching
by Michael Sean Winters | Jul. 11, 2013
"There is a dictate of nature more imperious and more ancient than any bargain between man and man, that the remuneration must be enough to support the wage-earner in reasonable and frugal comfort. If through necessity or fear of a worse evil, the workingman accepts harder conditions because an employer or contractor will give him no better, he is the victim of force and injustice." -Leo XIII, Rerum Novarum, # 45
Yesterday, the City Council for the District of Columbia passed a new “living wage” law that applies specifically to large scale businesses like Wal-Mart. Indeed, the day before the vote, as mentioned yesterday, Wal-Mart threatened to suspend plans to build three additional stores in DC if the new law passed. The threat was straight out of the Wal-Mart playbook which is to throw its considerable weight around to get its way, and its way is to be the lowest possible wages to shore up their profit margins. Usually, it works, at least for Wal-Mart which posted $17 billion, with a “b” in profits in its most recent fiscal year.
They achieve this high profitability through a variety of means. The ability of Wal-Mart to undercut prices at more traditional local stores may be a short-term boon for consumers, but when traditional, often family-run, stores are forced to close in their usual downtown locations, the center of many American towns become ghost towns, their customer-base lost to the big box stores. So, Wal-Mart creates jobs and takes away jobs in sales in any given community. And, Wal-Mart’s profitability is also premised on its ability to import cheap consumer goods from countries like China and Bangladesh where wages are low, thus further damaging the American worker by encouraging the movement of manufacturing jobs overseas.
All this would be enough to indict Wal-Mart in my eyes, but there is not a lot a city council can do about it. City councils do not set trade laws, nor determine the minimum wage in Bangladesh, nor have the capacity to convince customers that the price the pay for the goods at Wal-Mart may be cheap, but the loss of a downtown commercial center may be far more expensive, not only in terms of economic activity but in terms of quality-of-life assessments. But, city councils, and state legislatures, and Congress, can set a minimum wage.
http://ncronline.org/blogs/distinctly-catholic/wal-mart-catholic-social-teaching
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