Wages With Minimal Wiggle Room. The per-employee profit at Apple is $407,000. For big retailers, it’s $6,300. No wonder Wal-Mart feels the pinch of its pay increase.

The Wall Street Journal reports:

Long the target of progressives looking to increase the minimum wage, Wal-Mart announced earlier this year that the company would increase its base wage to $9 an hour in April and $10 an hour by February 2016. How’s that working out so far?

In November Wal-Mart announced a 10% decline in earnings per share, for the fiscal year’s third quarter. Higher wages were “by far the biggest driver of the decline in consolidated operating income,” as CEO Doug McMillon put it in the earnings conference call. In October Wal-Mart predicted a 6%-12% decline next year in earnings per share—despite the company’s plan to reduce the number of shares in a $20 billion buyback. Wal-Mart’s hourly wage increases accounted for “approximately 75%” of the reduction, according to CFO Charles Holley.

Plummeting earnings wasn’t the plan, and presumably management took other steps it assumed would prevent the decline. The lesson is that America’s largest private employer—known for its ability to control costs and operate efficiently—lost profit because the company couldn’t offset a wage increase to $9 an hour by increasing prices, automating tasks or scheduling employees more efficiently.

The demand for labor is always a downward sloping curve.