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Do Wal-Mart’s 60,000 New Employees Help the Economy?

Wal-Mart Stores Inc. (NYSE: WMT) will add 60,000 new “seasonal” workers, which is the start of holiday additions by big-box retailers and department stores. Industry analysts expect these retailers will add 700,000 workers for the holidays, which would be three times what the U.S. economy adds in a month. However, these workers are paid poorly and may be out of jobs at the end of the year. Therefore, their effect, on U.S. gross domestic product is negligible.

According to Judith McKenna, Chief Operating Officer, Walmart U.S.:

To help exceed our customer’s expectations, Walmart will give current associates the first opportunity to pick up additional hours. We are also hiring 60,000 seasonal associates, with a starting rate of at least $9 an hour. We know some of these hires are looking for a short-term opportunity to earn extra Christmas money, but for many, this could be the start of a career. In fact we have hundreds of store managers who started with the company as a seasonal associate. Last year, more than half of our seasonal associates stayed with Walmart in a permanent role after the holidays.

Most economists would not call $9 a “living wage.” As a matter of fact, this pay level could mean that these seasonal workers are below the poverty level. At least, Wal-Mart would reasonably argue, they have jobs.

The jobs will not turn most of these people into consumers in the classic sense. Most, if not all, of their incomes will go toward basic needs of housing, food and clothing. If they have to drive to their jobs, their incomes will help them less, even with gas prices at extremely low levels.

Wal-Mart’s decision will help 60,000 people, but probably only for three months. What it pays will not allow many of these people to buy anything to celebrate the holiday season.

ALSO READ: America’s Fastest Growing Jobs

By Douglas A. McIntyre


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