Essentially, over time. If you could also prevent other existing competitors from offering Wallmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Wallmart did, and now there's all these ex-Wallmart people looking for a job. New grocery stores would form, and if they paid enough to get these people off welfare, that would be (per GP) $6B of money freed to be allocated elsewhere. Food prices could raise a little bit, though, and food variety could get reduced (but these are not necessarily bad in the balance).
I'm no economist so I may be missing something; let's talk through this bit by bit and maybe you can help me understand your plan better.
> If you could also prevent other existing competitors from Walmart-level pay or worse. In this scenario, the demand for groceries didn't disappear - just Walmart did, and now there's all these ex-Walmart people looking for a job.
You mention existing competitors would face the same regulation and control that Walmart would but the rest of your post reads like you only expect Walmart employees to be laid off. What makes you think that Smiths, Macey's, Kroger, Target, etc won't have to let workers go for the same reasons that Walmart workers would be let go? If you're instituting policies that result in Walmart cutting its workforce, those same policies will absolutely cause the same to happen in competing chains.
Okay, so you've managed to flood the labor market with workers from a dozen grocery chains- what next?
> New grocery stores would form
How and why do you think new grocery stores that don't even have the established presence or infrastructure other chains had already built will be able to thrive once these other chains have disappeared?
> And if they paid enough to get these people off welfare
Where is the money coming from that allows these new stores to pay their workers $6.2b more than before? By
a) raising prices on groceries and
b) hiring fewer workers.
So, to recap: a large part of the workforce has been laid off, prices have risen for everyone across the board, and because the new stores with the higher prices aren't hiring as many workers to compensate for the policies you've instituted, part of the workforce that was laid off in the first place will still be out of work! That's without even taking into consideration the effect this will have on the rest of the working class. Do you think the families who were on the cusp of needing welfare before the prices on groceries rose will magically have their food budgets increased? Of course not. Either they'll work more to increase their incomes, learn to live with less while keeping their grocery budgets static, or get the government to subsidize them which is the whole problem you wanted to fix in the first place.
If you're instituting a policy that causes massive lay-offs for multiple corporations while increasing the cost of living for everyone (including the people you just got laid off), you're not going to free up $6.2b to be used elsewhere- you're creating a situation where
a) even more people will need to take advantage of government subsidies to make ends meet; wasn't this what you were trying to fix?
b) families will, as they always have, learn to survive on less while spending the same as before.
c) permanently add to the unemployment pool because the new stores are hiring fewer employees than were laid off by the new policies you instituted.
I don't like this solution. Am I wrong? I've never had any formal econ education so it's perfectly reasonable to believe I'm missing some key points here; this is just how it logically plays out in my mind.
> If you're instituting policies that result in Walmart cutting its workforce, those same policies will absolutely cause the same to happen in competing chains.
Fair enough. I'm not from the US, I don't know the US retail market that well, beyond recognizing some brands. I assumed, by the tone of the comment thread I replied in, that Walmart is unique in being a big retailer on the wrong side of the size of wages - but in retrospect, that was a stupid assumption.
> How and why do you think new grocery stores that don't even have the established presence or infrastructure other chains had already built will be able to thrive once these other chains have disappeared?
I handwaved the risk of total societal collapse here :). But companies folding doesn't mean the infrastructure is gone; it can be reacquired and reused by new companies.
> part of the workforce that was laid off in the first place will still be out of work!
Fair enough. My assumption here was that the demand for grocery store workforce is driven by the demand for food, which would not change in this situation. But perhaps there's a surplus of workers.
> Do you think the families who were on the cusp of needing welfare before the prices on groceries rose will magically have their food budgets increased? Of course not.
A good point.
I agree with your analysis. Thanks for breaking down and simulating the consequences of my idea in larger context, and thanks for calling me on my bullshit. I'm not particularly proud of that comment.
That said, I'm still having trouble buying the idea that arbitrarily low wages are a good thing - I feel (though I'm not 100% convinced either) that these wages aren't determined solely by what makes sense for a given job category; there's a feedback loop pushing the wages down to however low they can get, and I suspect that there are optimizations left on the table, or cashed in as profits, that could be instead used to raise the wages while not meaningfully affecting the survivability of the company or the end prices for consumers.
