Reports have surfaced the internet today that Walmart's Oakland branch is closing. The reason behind the closure is said to be because Oakland's local minimum wage is higher compared to the city's.
Tim Worstall, a contributor to Forbes, explains that it's not to examine whether the claim to blame the high cost of minimum wage is true, rather it's to examine if Walmart has done the reasonable thing in an economic and business standpoint.
It has been reported previously that Walmart stores are being closed nation-wide and abroad as well. Worstall explains that there is no connection to the local minimum wage if stores overseas are closing as well.
He describes the claim that the high cost of minimum wage as the reason for the closure as an interesting idea but that doesn't mean all the rest of the stores closing can have the same reason. So what is the real reason behind the stores shutting down? No one is sure.
However, sources have claimed that it Walmart officials that it was indeed the reason. Reasons behind closed doors explained that Walmart officials were open about the closing of its stores. They called out the minimum wage at $11.50 per hour and $15 per hour as a negative. Evans was quoted to say that they will be unable to run the stores at the cost and could not build more.
That may well be the reason however Worstall insists that there is a bigger picture behind all of this. One has to consider the impact it brought the company as to whether or not it caused instability to the company financially.
Oakland officials find this news from Walmart discouraging and if it is indeed connected with the minimum wage cost, the news is disappointing for the city officials.
You can view the rest of Worstall's description of Walmart's closure here.
