CBS’s Charlie Rose and Norah O’Donnell apparently think it’s their job to be economic policy experts instead of journalists. On July 23’s “This Morning,” CBS did a segment on the battle between Walmart and the Washington, D.C. Council and the anchors called for Walmart to “compromise” by raising the wages it pays its workers.
The D.C. Council passed a bill July 10 requiring Walmart to pay its local employees a “living wage” of at least $12.50 an hour, an absurd 51 percent increase in wages. Walmart has not backed down and has threatened to shut down three of six planned stores in D.C. and take the jobs elsewhere.
But CBS anchors clearly have no problem with entry-level jobs being taken away from those who could use them the most. CBS interviewed a barber, Carl Williams, who works across the street from one of the proposed D.C. Walmart stores. Williams suggested that Walmart raise its wages to “Nine, Nine fifty” an hour from the $8.25 it already pays. The federal minimum wage is $7.25 an hour. Anchors Charlie Rose and Norah O’Donnel praised the barber for his economic insight.
Rose: Washington needs Carl Williams, the barber, who said, “Come on, compromise. Bring it up to $9.
O’Donnell: I know.
Rose: Carl should be somewhere between Pennsylvania Ave and the White House.
O’Donnell: That’s exactly right, he was very smart in saying there’s got to be a compromise to this situation.
This isn’t the first time that a city council has threatened Walmart to raise its wages to a “living wage.” In 2006, Chicago’s city council also bullied Walmart to raise its wages, but the mayor ended up vetoing the measure when Walmart refused to acquiesce to the council’s demands.
“Living wage” laws were proposed by labor unions in the 1990s and laws have been enacted in major cities across the U.S. Living wage laws require local businesses to pay about three to seven dollars more an hour than the federal minimum wage to full-time employees to supposedly combat poverty. This becomes a problem when city councils mandate businesses pay extra money to their employees, as businesses would rather just set up stores in other cities that do not have the imposed living wage ordinances.
As James Dorn, editor for CATO explained in Forbes Magazine [1], raising minimum wage also raises employer expectations for work produced when hiring employees. Thus, raising minimum wage doesn’t help low-skilled workers, but impairs them, as they cannot compete when higher skilled, more experienced employees are applying for the same higher-paid jobs.
As the Business and Media Institute has written previously [2], raising minimum wage wages hurts the poor the most. As James Sherk, Senior Policy Analyst in Labor Economics for Heritage has said, there is “no correlation between higher minimum wage and lower poverty.”