A former Walmart CEO opined Sunday that mass corporate layoffs occurring now could be detrimental to the U.S. economy.
Bill Simon, who used to run the nation’s biggest retailer, spoke about the impact of continuing layoffs in an appearance on “Fox & Friends Weekend.”
“It’s crazy right now,” Simon said Sunday. “We’re stuck in this loop of wage inflation, product inflation, cost inflation, and it’s just that cycle keeps going. And I think, unfortunately, an inevitable byproduct of some of the Fed’s moves and as the necessary medicine we have to take to kind of cool things down and get the inflation back under control on some of these layoffs that are coming.”
The Fox host asked if the mass layoffs being announced by many large employers, not just big tech companies, would return the economy to no inflation and maximum employment.
Simon said that, theoretically it could.
“But, at the same time, there’s this wage inflation that’s going on,” he said. “For example, last week Walmart announced it was raising its minimum wage, their starting wage, to $14 per hour. That’s a 17 percent increase.”
He noted that Delta raised salaries for its pilots by 25 percent, about the same wage increase negotiated for railway workers.
“Wage increases like that sort of counteract the employment layoffs we’re starting to see,” Simon explained.
The former Walmart CEO added that immigration is also a problem.
“We need workers but we need workers we can employ that are in the country legally,” he said. “What’s happening now is you’re letting people in that can’t participate in the workforce but do increase demand. So, you have increased demand driving prices up, without the workforce to be able to service it.”
“So, it’s a complicated factor,” Simon added. “Certain inputs are trying to solve inflation, but you have counteracting forces that kind of mess that up.”
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