Study: Retailers vary and so should retail minimum wages
by Marianne Wilson
March 18, 2016
Source Chain Store Age
Should Walmart and Costco be required to pay employees the same minimum wage?
The answer is no, at least that’s the conclusion of a new study according to the National Center for Policy Analysis, a conservative think tank based in Dallas.
The analysis warns that requiring the same minimum wage regardless of industry could be detrimental to the very workers “living wage” advocates are trying to help. In its comparison of Costco and Walmart, the first and least favorite retailers of “living wage” advocates, the study found that:
• Retail wages vary by type or store, ranging from an average of $11.19 paid to gas station clerks, to $22.12 paid to electronics and appliance store clerks.
• Profit margins for retail industries also vary, ranging from about 2 to 4%.
• Business models also differ between retailers. Thus, Costco caters to a higher income and small business shopper than Walmart, and they charge a membership fee.
• Productivity aside, raising wages often leads to price increases on basic goods, which hurts price-sensitive, low-wage workers.
According to a geographic analysis of Florida and Texas contained in the study, Costco stores are more likely to be located in areas with higher median household incomes than Walmart store. While Walmart stores are ubiquitous, Costco stores are more likely to be located in areas with a median income in the top 40%.
“It is simply unrealistic to expect that one retailer is going to provide the same pay and benefits as another, particularly if they are targeting shoppers of different income levels,” said Pam Villarreal, NCPA senior fellow and one of the authors of the study.
The study, entitled “Should Walmart Imitate Costco? The Variation in Retail Wages” can be downloaded here.