Rep. Ilhan Omar (D-MN), who knows a thing or two about moral outrages because she has committed several herself, recently proclaimed moral outrage about the fact that Walmart’s CEO earns a considerably larger income than those of Walmart cashiers. She was reacting to a CNBC report on so-called “income inequality” that alleges it would take the average employee at a corporation 100 years to make what his CEO makes annually. To drive this point home, Omar selected the example of Walmart, claiming that the median pay for a Walmart worker is about $22,000, while Walmart’s CEO Doug McMillon takes home almost $23,000,000. There are a lot of problems here, so let’s go through this piece by piece.
First of all, it would only take an employee 100 years to earn his CEO’s salary if the employee remained in the same position, earning the same pay, for a century. I will try to be delicate when I say this, but if you haven’t gotten a raise in 100 years, it’s probably because you really suck at your job. Though I am impressed that you’re still working at such an advanced age. My point here is not merely sarcastic. This is important to stipulate: A person making 20 grand a year doesn’t have to remain at that level forever. And if he has any skill and ambition to speak of, he probably won’t. Which brings us to Omar’s point about Doug McMillon.
The congresswoman could not possibly have chosen a better example to illustrate her own cluelessness. McMillon’s trajectory proves that griping about “income inequality” at a place like Walmart is absurd. It just so happens that he began his career in a Walmart distribution center unloading trucks. After he obtained his bachelor’s degree, he started training to become a buyer for the company. Before taking the training program, he worked for some time as an assistant manager at an Oklahoma location. Then he became a buyer. Then he worked in merchandising. Then he ran Sam’s Club. Then he headed Walmart International. Then, after 30 years, he was named CEO of Walmart.
Why does he make exponentially more than a cashier who just started six months ago and hopes to have a new job somewhere else come summertime? Is that really even a question that needs answering? Here’s a better question: How many Walmart employees have been working there for at least, say, three years, and have been reliable and competent the whole time, have done things like inquire into management training courses, who plan to make Walmart a career, and yet still only make $22,000? I’m not saying nobody falls into that category, but I highly doubt that very many people fall into it. I think most of the lower-paid employees don’t stick around long, don’t want it to be their career, aren’t interested in taking additional training, and just basically do the bare minimum and go home. That’s certainly how I conducted myself when I worked retail. The real go-getters, in my experience, are somewhat rare. And, funny enough, they always seem to leapfrog everyone else and end up in better-paid positions.
The point is that the “income inequality” in Walmart can largely be explained by the fact that employees are doing different things, and have different skill sets, and different goals, and different levels of commitment, and different levels of competence. Income inequality in such a case is a logical result, not an “outrage.” And this dynamic at Walmart is, in many ways, mirrored by the economy as a whole. Generally speaking, if you’re competent, reliable, and ambitious, you have a shot to work your way up the economic ladder. That doesn’t mean everyone can be a millionaire, it doesn’t mean that every hard worker will necessarily be fairly rewarded for his efforts, and it doesn’t mean that poor people lack competence or ambition — it just means our free market system is the best possible system for giving people a shot to move from one position to a better one. It’s not perfect — no human system can ever be — but it’s a hell of a lot better than the alternative Omar and her socialist friends support.