Wal-Mart Could Pull Off Low PricesBetter Wages: Study

WASHINGTON -- Being the low-price leader doesn't mean employees' wages and benefits have to be sacrificed, according to research about Wal-Mart Stores, Inc. released yesterday by the Economic Policy Institute, a nonprofit, nonpartisan think tank based here.

Wal-Mart could significantly increase employee wages and benefits while still maintaining its low prices, although it would earn a smaller profit, the research concluded.

Wal-Mart has begun taking steps to improve its health care and other benefits in the face of mounting criticism from labor groups and others. The retailer has maintained, however, that its low prices boost consumers' buying power and increase their standard of living. It cites a Global Insight study that found Wal-Mart saves U.S. families more than $2,000 per year.

The authors of the Economic Policy Institute report concluded that if Wal-Mart reduced its profit margin to about 2.9 percent, where it stood in 1997, from the 3.6 percent margin it recorded last year, the change would free up some $2.3 billion to pay workers without raising prices. That works out to just under $2,100 per non-managerial employee, the researchers calculated.
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