IT HAS been a long time since the economy really worked well for most American workers. Those without a college degree have found themselves losing relative economic ground since the early 1980s, and nearly all workers have had a rough time of things—facing stagnant pay, for example—since the beginning of this century. It would be really great if workers, and those with less education especially, could find ways to earn more. In an intriguing piece published over the weekend, Neil Irwin, of the New York Times, suggests that Walmart, the massive discount retailer, may have found an answer: pay workers more and you get better workers. It sounds fantastic, a win-win for everyone, and why has it taken firms so long to discover this possibility? Yet the solution might not be as simple as all that.

Mr Irwin notes that Walmart has long been one of the most aggressive and influential cost-cutters in the American economy: credited, in some studies, with single-handedly depressing pay...Continue reading