Where the minimum wage was raised to $12.55 in Oakland, California the store closed. In the nearby city of San Leandro the minimum wage is $10 and the stores stayed open.
The difference between these three locations is the Oakland Wal-Mart has over a 25 percent difference in labor costs for entry-level employees than the San Leandro locations, says Mark Perry, an American Enterprise Institute scholar and professor of economics and finance at the University of Michigan’s Flint campus.A research fellow from the Heritage Foundation observes:
“Given the reality that Wal-Mart operates on razor-thin profit margins (only 2.8 percent last quarter), a 25 percent difference in labor costs for entry-level workers can be the difference between a store that turns a profit and a store that barely breaks even, or loses money,” Perry wrote.
“The true minimum wage is $0.00 an hour, Companies do not have to hire workers, and they will not pay them more than the value they create.”That's the reality of the private sector.
Hence the movement for higher minimum or living wages has now focused on the public sector where economic facts take a back seat to forced wealth redistribution ideology.