Walmart’s Response to Tax Reform Highlights US Wealth Inequality

The GOP is still reveling in victory at finally overhauling the U.S. tax code, while conservative allies work the press to claim that the cuts are already saving the middle class money and stimulating the economy.

One of their biggest success stories? Walmart. Ironically, though, it is Walmart that highlights the biggest problem with the new tax code — and why the wealth gap is only going to get worse.

Walmart was one of a series of businesses — many of them banks and airlines — to announce bonuses and raises in celebration of the new tax bill. Most chose bonuses, since, as the Washington Post reports, they don’t represent any sort of long-term commitment to better pay.

Walmart, on the other hand, chose to increase wages. Shortly after the bill passed, the company announced a new policy that would raise their starting hourly wage to $11 an hour, and even add perks like paid parental leave.

The announcement was hailed by many Republicans as proof that their bill would truly help lower and middle class Americans, rather than simply serve as a handout to the nation’s wealthiest. But the truth is that tax reform likely had very little to do with it.

“Observers said Walmart almost had to raise wages now if it wanted to keep step with peers such as Target, which late last year raised its starting wage to $11 an hour, with plans to reach $15 by 2020,” reports the Post. “‘I would’ve been astounded if they hadn’t raised wages,’ said Thomas Kochan, a professor at MIT’s Sloan School of Management. ‘What’s impossible to sort out is how much of this is because of savings from the tax cuts, and how much is because of pressure they’re receiving from employees and labor groups.'”

Odds are that public pressure, rather than tax breaks prompted the policy change. At the same time that Walmart announced its new pay structure and perks, the company also announced that it would be closing over five dozen Sam’s Clubs — another Walton family-affiliated business, resulting in job…

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