The Article: A $10.10 Minimum Wage Would Make A DVD At Walmart Cost One Cent More by Bryce Covert in ThinkProgress.
The Text: Raising the minimum wage to $10.10 an hour would increase the price of a $16 product at Walmart, such as the typical DVD, by just a cent if all of the extra costs were passed on to consumers, according to an analysis by an economist for Bloomberg News.
Ken Jacobs, chair of the Labor Center at the University of California, Berkeley, estimates that a minimum wage at that level would add $200 million to Walmart’s yearly labor costs, which comes to just 0.8 percent of what it currently spends. That also represents just 0.06 percent of the company’s billions in yearly sales, Jacobs told ThinkProgress, so if the company decided to pass the entire cost increase on to its customers, it would mean an extra penny for a $16 product.
The company may also very well decide not to pass the cost in that way. “It’s likely that some share of that cost would be passed through, but it’s not likely to be one hundred percent,” Jacobs said. An increased wage could increase its sales, as workers would have more money in their pockets to spend on its products, which could mitigate the cost. Bloomberg recently reported that the company is considering supporting a minimum wage increase, given that millions of its customers would “now have additional income,” according to a company spokesperson, although he said the company hasn’t made a decision. A $10.10 minimum wage would give 16.5 million workers across the country $31 billion more in earnings. Given all of that, “That penny per $16 an item may not turn out to be necessary,” Jacobs added.