Why it's naive to expect corporations to be nice to their workers

Why are companies so stingy with pay? Because they can be.

Capitalism unbound.
(Image credit: (Illustrated | Image courtesy GraphicaArtis/Corbis))

Henry Blodget had a welcome moment of moral exasperation in Business Insider on Sunday: "It is not a law that they pay their employees as little as possible," he fumed, ripping into American business managers and owners. "It's a choice."

And he's absolutely right. Take Walmart, the country's biggest private employer and the poster child for insisting your business model requires dirt cheap pay. It does, in fact, have the room in its profit margin to pay its employees several thousand more a year. And Blodget is right that inequality — the natural result of the perpetual drive to "minimize wage costs" — guts the consumer base, making the American economy less stable and sustainable.

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