Why Don't They Go to Work for Trader Joe's Then?

Lorraine Devon Wilke at something called Addicting Info posted a piece with the headline, “Rejecting Walmart Strategy, Trader Joe’s Pays Employees A Living Wage And Wins”In it she makes the claim that while businesses like Walmart, Papa John’s Target, and Applebee’s continue with “Scroogian thinking” by paying the minimum wage,

One question I have is, why don’t all of the employees who work for the alleged exploiters quit and go to work for Trader Joe’s? Perhaps because the “smarter businesses” cannot afford to hire any more employees.

Economic reality remains reality regardless of our feelings. We may not like it, but the truth is the truth. As I explain in Chapter 9 of my Foundations of Economics, if an entrepreneur continues to pay workers more than their financial contribution to his business, he will eventually go broke. It is neither wise nor charitable to bully firms who pay the minimum wage into paying more. If it truly will be beneficial, those profit-seeking firms will figure that out for themselves quite soon. If it is not profitable, intimidating them to pay wages above what they are willing effectively gives some of their least productive workers the pink slip.

The fact that some firms like Trader Joe’s can afford to pay their workers above the minimum wage is merely evidence that the market wage for their workers is above the minimum. It would be nice if that were true for every worker, but such is not the case. Do not blame the Wal-Mart’s and the Targets of the world for the state of the market. They are paying wages as high as their competition demands.