It often surprises me how out of touch most people are with the plight of the poor. One “journalist” who stopped surprising me long ago is Megan McArdle. She is ostensibly a business and economics reporter, but she quite often has issues with basic economic theory and even basic math sometimes. She is at her best (read worst) when she shows just how clueless she is about the people she is covering, though.
In a recent article about the recent Black Friday Wal-Mart strike, Megan says the following:
Recessions are also a time when employers don’t necessarily have a lot of profits to give up. Walmart’s $446 billion of revenue last year was eye-popping, but its profit margins are far from fat–between 3% to 3.5%. If they cut that down by a percentage point–about what retailers like Costco and Macy’s have been bringing in–that would give each Walmart employee about $2850 a year, which is substantial but far from life-changing. Further wage improvements would have to come out of the pockets of Walmart’s extremely price conscious shoppers. Which might be difficult, given how many product categories Amazon is pushing into.
Yeah, Megan, you’re right, for you, an extra $2,850 a year is far from life-changing. You waste more than that in a year. For a person making $20,000 a year, though, it is huge! You would suddenly have 14% more money than you did previously. Who wouldn’t be thrilled with a 14% raise? Megan McArdle, apparently. You would have $200 extra each month. You can pay for groceries with that. You can not get kicked out of your apartment with that. You can maybe start planning for a future with that instead of having to constantly worry about the present.
But, no, Megan, you continue to live in your fantasy world. Continue believing that $2,850 wouldn’t be life altering for almost 15% of the U.S. population. Your persistent writing with blinders on gives us bloggers plenty of fodder. I mean, it’s not like we can all just pick on David Brooks.