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In North Dakota, Walmart employees start at $17.40/hr

Posted by Faith Braverman • 11 Jun 2014

WILLISTON, NORTH DAKOTA–Mark J. Perry, an acclaimed economics professor and writer, recently took a trip to Williston, North Dakota. Despite its remote location, the city is in the midst of an economic boom after the Bakken oil fields began gushing shale oil.

Bakken produces one million barrels of oil per day, making it one of the top ten oil fields in the world. In return, the city’s unemployment rate has dwindled to 0.9%. Dr. Perry took a picture of Walmart starting salaries, and explained the economic ramifications this has on the minimum-wage debate

1. Walmart pays wages that reflect the economic conditions in a local market based on the supply and demand realities of the local labor market. In other words, Walmart can’t really set wages independent of market forces and it’s really at the mercy of the market in every local community. If Walmart offered the minimum wage of $7.25 per hour in the Bakken area, it wouldn’t be able to staff its stores.

2. The fact that Walmart is paying almost 2.5 times the minimum wage in Williston, ND is evidence that a single, national minimum wage for every city, county, labor market in the country can’t possibly make sense. Even proponents of the minimum wage have to agree that a single national minimum can’t be optimal for every labor market in the country. In that case, they would logically have to support thousands of minimum wages tailored to thousands of local communities, or maybe even more logically agree that minimum wages are unworkable.

3. You probably won’t be hearing anybody calling for a $15 per hour “living wage” in North Dakota, since the entry-level wages at Wal-Mart there are already above that.

4. The energy sector is the strongest sector of the US economy, and is bringing wealth, prosperity, and high-paying jobs to places like western North Dakota and south-central and western Texas.

5. Of course, what we also have here is a huge hole blown in the “we need minimum wage because businesses won’t pay good wages” argument.

Dr. Perry points out that Obama has decided not to visit “the most prosperous part of the most prosperous state in the nation” this week. Rather, Obama has decided to pay the Standing Rock Sioux Indian Reservation a visit, where the unemployment rate is 86%.

“When Obama lectures the Native Americans this Friday about jobs and economic development in their part of North Dakota, perhaps he should mention that there’s a labor shortage only a few hundred miles away, with hundreds, if not thousands of immediate openings for high-paying jobs in the oil patch.”

Faith Braverman is a proud contributor to The Libertarian Republic, and writes in the hopes of advancing the liberty movement in any way possible. She has written extensively for The Daily Caller, and is a frequent guest on Liberty Movement Radio, as well as Stossel (in her wildest dreams). Follow her on Twitter and Tumblr.
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  • kernals

    So what’s wrong with raising the minimum wage if market wages are higher?

  • Gentil Aquitaine

    A specious argument for going with no federal minimum wage. The Feds needs to set a floor beneath which even states like Texas, Alabama, and Mississippi can’t fall. (Granted the minimum wage in Seattle is gong to be higher than this floor…) Minimum Wage is the state making a moral decision that businesses are not constituted to make. It is folly to expect Corporate America to consider the well being of the American worker when making decisions on what to pay workers. More than folly, it is a misunderstanding of the employer-employee relationship (here, anyway).

    • echelon

      Your assessment makes me weep. Yikes! I want to live in a world where “The Fed” doesn’t exist. I want “The Fed” do no nothing for me.

      • Gentil Aquitaine

        I said “Feds” not “the Fed”… Is that who you thought I meant? About 90% of the anti-government rhetoric we have been conditioned to parrot and believe is pure B.S. It’s what greedy pricks like the Koch brothers want us to believe so that we will neglect participation in government and they can continue to skirt their obligations to the American people. (And, yes, as an American corporation, Koch Industries does have certain obligations to the people.) One of the jobs of American government (state, local, and federal) is to ensure the American people are not being screwed by employers and businesses. To the extent that its members are largely bought and paid for by special interests, that isn’t happening right now. The lack of a federal minimum wage increase (due to the Republican House) is a prime example of this failure.

        • echelon

          No, I mistyped. I meant feds. Where is all this “anti-government rhetoric” being taught and conditioned to us to parrot? I certainly don’t see it on the main stream news! Conversely I see them endorsing a large central power structure that apparently must be responsible for taking care of people from the cradle to the grave.

          Nowhere do I see where our Constitution or any other founding documents say that it’s a duty or job of any level of government to ensure that we are not being screwed by employers or businesses. The only duty of government – ours at least – is to secure our natural rights.

          Murder, theft, fraud, etc. is wrong no matter if it is perpetuated by one person against another, a company against many people or a government against its’ own people.

          It seems to me that 90% of the anti-Koch brothers rhetoric has been taught and conditioned to us to parrot and believe by greedy people in government who want us to believe that they are our benevolent gods who will swoop in and save us from every peril and disaster.

          One of the jobs of the American People is to ensure that the American government is not screwing them. There would be no one to pay for if the power wasn’t there to buy.

          We look back and see the violent struggles to untangle the power structure of “church” from state. A hundred years from now people will look back on the violent struggles to untangle large global business from state.

          But this I know. The world cannot run largely without business or trade. It can run largely without government.

          • Gentil Aquitaine

            “GOVERNMENT BAD, MARKET GOOD!” has been the mantra of the Republican Party since the 80s. In its most radical and least substantive form it is Randian Objectivism, the ideology of libertarian right these days. It has been hammered into the brain of Red State America for over 30 years now. (Repetition and thought-terminating clichés are a staple of right wing propaganda.) What many of master capitalists don’t grasp, however, is that, absent a strong state and rule of law, capitalism and the market system is finished. (And I am of the opinion it is on its way out as we speak–at least in the West.) Without a public sector to keep private power in check, we drift into neofeudalism.

            As for the world running w/o business and trade, it is eventually going to have to. The capitalist system such as we know it is dying of two maladies: the decreasing value of labor and, with the latter, a chronic lack of aggregate demand. Exacerbating the situation is the financialization of the G-7 economies. Regardless of what our two BS political parties do, a zero growth, resource based economy is going to have to developed by the coming generations.

  • Dennis Karr

    I believe you meant Mark J. Perry, not Berry, just a heads up.

    • Faith Braverman

      It’s been edited, thanks for bringing it to my attention!

  • Mike Till II

    There has to be a national wage floor. If not, and corporate America decides $2 an hour is the going rate, then regardless of the market, that will be all that’s available. Corporate America shafting the labor force to increase profits… Yeah, because that NEVER happens. What are we going to do? Not work? Not likely. While I applaud the wages that this particular Walmart pays, it actually has nothing to do with Walmart and more with forcing their hand… At the cost of our home. Fossil fuels need to become fossils in and of themselves. Doesn’t make a bit of difference if you’re pumping out a BILLION barrels of oil a day if you can’t breath the air or it’s 150 degrees outside and there’s no water to drink. While we’re on oil, let’s look at the LACK of supply and demand in this country… Specifically gasoline. Speculators set the price of gas based on everything BUT supply and demand. So, while this article looks amazing on the surface, it’s like digging for oil: the deeper you dig, the darker it gets.

    • echelon

      You’re referring to the spider-web that we’ve let the governments and cartels of the world create.

      There doesn’t have to be a national wage floor. What did people do in the world before there was a “minimum wage”? How did anybody survive? If a kid says he’ll mow my lawn for $20 and another says he’ll mow my lawn for $10 am I a bad guy because I choose to have the kid that wants $10 mow my lawn? No, it’s an agreement. If that kid values his time and effort at $10 and I’m willing to pay him that great.

      If people are getting shafted then yes they can choose to not work! Oh but how would they feed themselves? There are many ways to be self sufficient.

      The problem with any of this is that the markets are artificial because various gov agencies are involved and they create bubbles and other nonsense. If Walmart or anyone else didn’t pay people well then people wouldn’t work there and they’d go out of business. It’s that simple.

      • Matthew Bryant

        Uhh, before the minimum wage people did starve.

        And there aren’t many ways to be self sufficient when you live in a city where there is nowhere to grow food, and rent is already taking up 110 hours of your wages each month if you keep that crappy job.

        Technology is reducing our need for full employment, so there is going to be a significant number of unemployed forever now, that’s a fact of the current market. What’s happening now is that the cultural need to be ‘self-reliant’ is making it so just about everyone still needs that job to get by, and that creates excess supply of labor, and corporations are running to the bank on that idea by keeping their wages as low as possible and the fact that you can hire 10 new people the next week desperate enough to work that crappy job when the first 10 get fed up. This is unethical, and the whole system needs to change.

        And uhh, Walmart has been sued because they didn’t pay a bunch of their workers the overtime they worked, but they’re so big they can deal with a few billion in payouts.

        • Seaky

          You certianly put a lot of Faith in the big corps if you think they won’t pass the cost of increased labor onto customers. The system needs to be what it was always intent on being- free market capitalism. We’ve never had it due to greed and fascism, really. The whole argument needs to shift to incentives. How do you motivate someone to build a useful skill set and earn their own living? By not paying them $15 an hour to flip patties. Min wage jobs aren’t supposed to be permanent. This price floor sends the wrong message. If you can’t afford to live at your current status or in your current city then move to a city that needs labor. We are all too caught up in our own bubbles. Disillusion is rampant.

          • Matthew Bryant

            “free market capitalism” is an oxy moron. Free markets are based around competition. Capitalism is based around profit. There’s less profit when you have good competition. The two forces are opposed to each other. What we have now is rampart capitalism, but no free market. And it’s not regulations that prohibit the free market, it is the essence of capitalism. Companies rake in massive profits and then buy up any competition.

            I’ll only say that as you are mostly regurgitating senseless right-wing talking points, not anything that makes sense. Sure, “in theory” minimum wage jobs aren’t permanent. In REALITY though, they are. Then again the whole purpose of the minimum wage was for it to be a living wage, too…

            • echelon

              You make the mistake of painting everything with too broad a brush.

              Mom and pop shops and small local businesses rarely get “rampant” and care for their employees. They want to increase not only their wealth but the wealth of those around them.

              Giant, faceless corporations that are owned by stockholders and are beholden to Wall Street and the like are where these things come into play. Put corrupt politicians, judges and entire hegemony over the creation of currency and you have a perfect mixture of misery. It’s no different then putting all power in the hands of a King or Emperor.

              Once again I would also argue that capitalism only works in conjunction with a high moral conviction in the culture. If it is unthinkable to steal or defraud your neighbor then it doesn’t matter if you make $1, $1,000 or $100,000 or if you own one factory or one hundred.

              I would also disagree that “minimum wage jobs” aren’t permanent. They shouldn’t be permanent to a person who works hard and has aspirations to better themselves. But to someone who chooses not to work hard or does not want more responsibilities then it may be their chosen lot in life. We often forget that not everyone can be a doctor or an engineer or an artist. Maybe someone will only make hamburgers for a living…so what…then hopefully they should strive to make the best friggin’ hamburgers ever! If not, well again, it all comes down to our personal decisions and actions. Forcing an employer to pay someone something when they aren’t willing or able to do a job isn’t just or ethical. Neither is taxing productive people and giving it in perpetuity to people who won’t work for a living. Last I read that was called theft.

            • Thomas

              the competition is for capital gain, no? What we have now – due to over involvement of governmental agencies and corporation collusion, is fascism. We need to strenghten our immigration policy and as for those jobs that americans don’t want; well, reduce welfare food stamps and housing and many of those jobs will magically be staffed over night.

              • Matthew Bryant

                So you advocate making the poor poorer to help the economy? That’s not how you help the economy.

                And how do you combat corporate collusion without government involvement?

          • Anon

            Because up and moving is that simple right? It costs nothing, just enough for someone struggling to survive can get away from it all.

            • echelon

              Freedom isn’t free. Life is not easy. Everything comes with a cost. You either feed the machine or you do whatever you can to starve it so it dies. Period.

        • echelon

          And people aren’t starving today? That’s a part of the human condition. A government coming in and trying to force policies and statutes to prevent something just doesn’t work. If a people do not have an internal moral acumen to help those in need then no forced action or behavior by a government is going to change that fact.

          What is your definition of “getting by”? Most people can live on very little if they truly desire to. But if you are talking about “barely getting by” and having a smart phone and internet and a car and things like this then you are squarely in first world luxury land.

          This problem, along with most of the world’s problems, is wrapped up in layer and layers of things that have accumulated through the years. It’s not easy to sum up in a simple post but if you were to get the government out of everything and get taxes down to little to nothing I guarantee you that the standard of living would go up and prices would go down. When government weds anything else it equals doom. We’ve seen this when the government married the church and now we’re seeing this as the government has married big business.

          Would corporations still try to do dirty things? Yes. Humans + power + money are wont to do that. But if you get government the hell out of the way then corporation greed that is unsanctioned would be much easier to deal with.

          We are in agreement that “the whole system needs to change”, the question is what will the next experiment be? More Nanny State that controls a person’s entire life from cradle to grave or more liberty and freedom that allows for human fallibility and makes course corrections more naturally and evenly?