&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-904500130&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/904500130/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; (Photo by Scott Olson/Getty Images)
Walmart had good news and bad news for the hundreds of thousands of its employees recently. The good news is that it is hiking the minimum wage it pays them, beating federal government mandates. The bad news is that it is closing dozens of its Sam Club Stores, sending thousands of employees searching for jobs elsewhere.
And that&a;rsquo;s on the top of the previously &l;a href=&q;https://www.zerohedge.com/news/2017-07-19/wal-mart-replaces-more-4000-employees-machines&q; target=&q;_blank&q;&g;reported&l;/a&g; news that the company is replacing thousands of cashiers with self-checkout counters.
In theory, minimum wage hikes are a good thing. They place additional money in the hands of those who need it the most: low income people.
In practice, minimum wage hikes may not be a good thing for everyone in this group. Higher wages prompt companies to change their businesses in ways that hurt workers. One way is to substitute labor that has become more expensive with machines that have become less expensive and more sophisticated (i.e., substitute cashiers with self-checkout counters).
And that&a;rsquo;s one of the ugly truths about minimum wage hikes.
Another way companies respond to minimum wage hikes is to scale down businesses that are no longer profitable at the new wages. Like closing down stores, as Walmart has been doing lately. The company is&l;span&g;&a;nbsp;&l;/span&g;closing&l;span&g;&a;nbsp;&l;/span&g;63 Sam&a;rsquo;s Clubs,&l;span&g;&a;nbsp;&l;/span&g;a nearly 10% reduction in Sam&a;rsquo;s Club stores. There are 100,000 Sam&a;rsquo;s Club workers in the U.S. and an estimated&a;nbsp;&l;a href=&q;https://www.indystar.com/story/news/2018/01/11/sams-club-close-multiple-indianapolis-stores/1024476001/&q; target=&q;_blank&q;&g;150-160 working in each store&l;/a&g;, which could mean about 9,700 workers will be left without a job.
And that&a;rsquo;s the other ugly truth about minimum wage hikes.
To be fair, self-checkout counters would have eventually had made their way to stores anyway, as technology improved. And some retail stores would have had closed down, as on-line sales chipped away from traditional sales.
Still, minimum wage hikes can speed this process. That&a;rsquo;s why Walmart&a;rsquo;s announcement of store closings that followed the minimum wage hikes may not be a mere coincidence.
Walmart is a for-profit enterprise company in a dynamic free enterprise system, not a welfare agency.