No adverse effects of rising minimum wage

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But in early 2015, Walmart announced it would actually pay its workers more. That set in motion the biggest test imaginable of a basic argument that has consumed ivory-tower economists, union-hall organizers and corporate executives for years on end: What if paying workers more, training them better and offering better opportunities for advancement can actually make a company more profitable, rather than less? It is an idea that flies in the face of the prevailing ethos on Wall Street and in many executive suites the last few decades.

But there is sound economic theory behind the idea. "Efficiency wages" is the term that economists — who excel at giving complex names to obvious ideas — use for the notion that employers who pay workers more than the going rate will get more loyal, harder-working, more productive employees in return. Walmart's experiment holds some surprising lessons for the American economy as a whole. Productivity gains have been slow for years; could fatter paychecks reverse that? Demand for goods and services has remained stubbornly low ever since the 2008 economic crisis. If companies paid people more, would it bring out more shoppers — benefiting workers and shareholders alike?

How Did Walmart Get Cleaner Stores and Higher Sales? It Paid Its People More