Democrats took control of the U.S. House of Representatives in Tuesday's election and were on the brink of taking the Senate. Analysts widely expect a minimum wage hike to be high on the list of priorities for the next Congress.
This would be both good and bad for Wal-Mart, the world's biggest retailer and largest U.S. private-sector employer. While a higher minimum wage may increase labor costs, it would also put more money in the pockets of Wal-Mart's core lower-income shoppers.
ThinkEquity Partners analyst Edward Weller pointed out that a higher minimum wage would affect far more customers than workers.
"It is not at all clear to us that anything much would change about market share or profitability," he wrote in a note to clients.
"We would guess that most, if not all, moderate-priced retailers would see payroll pressures of the same order of magnitude, and generally speaking, it would not change Wal-Mart's low-cost competitive position," he said.
Wal-Mart became a political target this election year, with key Democrats accusing the company of providing inadequate wages and benefits while earning billions of dollars in profit.
The retailer, which has been a heavy contributor to the Republican party, launched a voter registration drive and provided election information to its 1.3 million employees.
Wal-Mart spokesman David Tovar said the retailer thinks the federal minimum wage should be increased from the current $5.15, but it was up to Congress to decide how much. The retailer's average full-time hourly wage is $10.11. It has not disclosed the average wage for part-time workers.
BANKING, HEALTH CARE
Chris Kofinis, spokesman for WakeUpWalMart.com, which has pressured Wal-Mart to improve pay and benefits, said the retailer could expect more scrutiny on hot-button issues, including health care and banking.
"This is a company that is going to face a seriously different political environment, which means a lot of the terrible things they've been able to get away with over the last 12 years are now going to face serious inspection and oversight," Kofinis said.
Wal-Mart's Tovar said the retailer was a "bipartisan company, and we partner with elected leaders from both sides of the aisle.
"We find the doors open to us across the political spectrum when we share the good things we are doing as a company to make a difference in America, like environmental sustainability, providing $4 generic drugs, job creation, and the millions of dollars that we give to local charitable organizations."
Voters tossed out the Republican governor of Maryland, who had sided with Wal-Mart against legislation that would require the retailer to spend more on health care. The Maryland legislature overrode Gov. Robert Ehrlich's veto, but a judge struck down the law in July.
Other states have considered similar legislation, and politicians may be emboldened after Democrats won a majority of U.S. governors' offices for the first time since 1994.
Wal-Mart is one of several companies seeking permission to operate a bank known as an industrial loan corporation. The company has said it wanted to process credit card transactions, but opponents worry that it has bigger banking ambitions.
Massachusetts Democrat Barney Frank, who is set to take control of the House Financial Services Committee, has said he wanted federal banking regulators to extend a moratorium on industrial loan corporations.
Tovar said the bank bid should be approved, noting that similar applications were approved for some 60 other firms.
Wal-Mart shares edged down 39 cents, or 0.8 percent, at $47.26 in afternoon New York Stock Exchange trading.
