It's plausible, but I was curious if the numbers backed it up. I have found that they do not: overall there is a very weak correlation between minimum wage and the recently announced closures. I've summarized my findings in a few graphs below.
Visualizing the Data
Predicting closures by minimum wage |
Controlling for party control of the state executive and legislative branch |
Another interesting point to consider would be which party has control of the state. Everyone loves to blame all our problems on the dreaded Other Party That Isn't Us™, so let's look at the data again but control for party. Democrat controlled states do have a fairly strong upward trend to closures, but the significance is well over .05 here as well. The trend among divided (one party controls executive branch the other controls legislative) and Republican states is mostly flat, with similarly low significance causing wide amounts of variation. The wide amount of variation can probably be explained by the fact that so few states are fully Democrat, so each data point has a lot more pull.
And here's a few charts summarizing the data:
State minimum wage |
Number of closures |
Conclusions
With the data being mostly insignificant, we will have to turn to theories to help us jump to some conclusions.
My theory is that Wal-Mart sucks and people are avoiding them. Wal-Mart has gotten a lot of negative publicity for their abysmally low wages, food drives for its own employees living in poverty and attempts to stop employees from speaking out about horrible working conditions, and of course the destruction of local businesses through low prices they're able to provide with things like child labor and underpaying employees. I wouldn't go so far as to call it an outright boycott, but I know I for one avoid going there at all costs. I usually went just to people watch and wander around. What else are you going to do in a small town at 2 am? It's safe to assume that with all the attention being drawn to what a horrible company they are that people are trying to find other ways to support themselves and their community.
The truth may be a little less of a crusade and a little more about shifting economics. People are shopping more online, which is thought to be eating into Wal-Mart's business significantly.
What do you think?
Data Sources:
List of Walmart closures
Partisan composition of states
Minimum wage by state
Data Sources:
List of Walmart closures
Partisan composition of states
Minimum wage by state