Breitbart Lies About The Minimum Wage Closing An LA Walmart

breitbart-walmart

Breitbart is being deceptive, which is harmful because it’s a hugely popular website that many people trust.

1) Nothing in the article supports the claim that Walmart shut down this store due to either the minimum wage or “union harassment.” That seems to be entirely made up.

2) This is one of 269 Walmarts being shut down, including over 100 “Walmart Express” stores (the smallest format of Walmart), plus a bunch of Walmart “Neighborhood Markets,” which are smaller than a regular Walmart (i.e., they’re as big as a large supermarket). The Walmart in LA’s Chinatown, which is what the Breitbart article is about, is one of their “Neighborhood Markets.”

Since many of these closures are in states with weak unions and low minimum wages, Breitbart’s headline is nonsense.

Most of those 269 Walmarts aren’t in areas where the minimum wage is being raised to $15. For example, 9 of the closing Wal-Marts are in Alabama, 16 are in North Carolina, and 29 are in Texas; in all those states the minimum wage is $7.25, the floor set by Federal law.

3) So why did Walmart close those stores? Mainly, it appears that they’ve made a strategic decision to phase out smaller Wal-Marts. And secondly, weak holiday profits in the entire retail sector probably figured into their decision.

4) There is a real problem here, which is that once that Walmart closes, the Chinatown neighborhood won’t have a full-size supermarket. The city should try to get another supermarket – and hopefully a better supermarket – to open in that neighborhood, if necessary offering tax breaks.

5) Because a relatively high number of Chinatown residents earn at or near the minimum wage, a supermarket in that neighborhood could benefit from a rising minimum wage, due to shoppers in the neighborhood having more spending money. I’m not denying that there’s a cost to employers of higher minimum wages, but often MW opponents focus only on the costs and ignore the benefits.

6) Empirical evidence shows that the minimum wage has virtually no effect on unemployment. Or at least, no measurable effect. (Pdf link.) That doesn’t mean that no marginal businesses have ever had to lay off workers because the minimum wage went up; but in the overall economy, those businesses are replaced by other businesses that are able to function while paying reasonable wages.

7) On the other hand, $15 an hour is a big jump – bigger than the jumps existing evidence has looked at. Maybe a nationwide $15 an hour minimum wage would lead to higher unemployment. But for now, only self-selected areas are going to $15 an hour – and in those areas, the limited evidence suggests $15 an hour is sustainable. But the existing data is limited; we’ll be able to answer the question much better five years from now.

This entry posted in Minimum Wage. Bookmark the permalink. 

5 Responses to Breitbart Lies About The Minimum Wage Closing An LA Walmart

  1. 1
    LTL FTC says:

    Breitbart is being deceptive, which is harmful because it’s a hugely popular website that many people trust. means this day of the week ends in ‘y.’

  2. 2
    RonF says:

    The rule I follow these days is “Always be suspicious when a news article you’re reading confirms your existing opinions.”

    There may be a good reason that such an article confirms your existing opinions – your opinions are correct. But still, be suspicious, especially when the article confirms the opinions of the authors as well.

  3. 3
    pillsy says:

    Holy guacamole. That article… is not as good as I expected an article about economics at Breitbart to be.

  4. 4
    Sebastian H says:

    “6) Empirical evidence shows that the minimum wage has virtually no effect on unemployment.”

    You mention the caveat in the next paragraph but as is the statement isn’t right. Empirical evidence shows that during a booming economy, tiny increases in the minimum wage don’t seem to have a disemployment effect. There is no evidence suggesting the same when doubling the minimum wage in a soft economy.

  5. 5
    Sam says:

    Is this the first Breitbart article you’ve read? I would say, like, 75% of its articles are at least a little deceptive (rough, tongue-in-cheek estimate). I don’t disagree with this post, but anyone who reads Breitbart and takes it at face value probably was not going to come out in favor of increasing the minimum wage anytime soon.

    Once upon a time, I posted to Breitbart and cited sources to correct an inaccuracy. I got zero “likes,” and one response that said, “They don’t care, man.”