This Wal-Mart low-prices, low-wages thing isn’t working out so well — even for Wal-Mart.
The company released its quarterly numbers last week, and they weren’t pretty. Same-store sales declined by 0.3 percent, and the company lowered its earnings-per-share forecast. Bad news wasn’t limited to Wal-Mart. At the low end of the retail consumer market, Kohl’s reported similarly bad news; Macy’s, a little higher up the food chain, lowered its earnings forecast as well.
While Americans with money are boosting both the housing and auto markets, the growing number of Americans without are curtailing their shopping. As Douglas McMillon, chief executive of Wal-Mart International, noted last week, “When we do see good things in the economy, sometimes they don’t immediately flow through to a paycheck. Remember how the average American lives.”
And who signs more paychecks than any private-sector employer on the planet? Ah, yes: Wal-Mart.
But let’s not single out the Bentonville, Ark., behemoth unduly. The good things in the economy aren’t flowing through to paychecks anyplace else in the U.S. economy, either. Corporate profits — which comprise a larger share of the nation’s economy than at any time since World War II — are being plowed into share buybacks or dividend payments, but decidedly not into wage increases. Worse yet, a steadily higher share of the jobs created in the current “recovery” are low-wage positions in retail and restaurants, while wages for the new generation of auto workers are half that of their predecessors.