Wal-Mart Threatens DC Pullout If Mayor Signs ‘Living Wage’ Bill

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Washington, DC is one step closer to having the highest minimum wage in the country. Last month, in an 8-5 vote, the DC Council approved a $12.50 per hour “living wage” minimum. The bill, officially called the “Large Retailer Accountability Act” (LRAA), requires retailers with corporate sales of $1 billion or more and with stores of at least 75,000 square feet to pay workers starting salaries of no less than $12.50 an hour. The city’s current hourly minimum wage is $8.25. The federal minimum wage is $7.25 per hour.

It seems clear to many observers that the bill is targeted specifically at Wal-Mart, which announced nearly three years ago that it would enter the District and build six new stores ranging from 80,000-125,000 square feet in size. Interestingly, long-time unionized operators in the nation’s capital – Safeway and Giant – would be exempt from the potential new minimum wage.

DC Mayor Vincent C. Gray, who personally lobbied Wal-Mart officials at the 2010 International Council of Shopping Centers (ICSC) convention in Las Vegas to build stores in his jurisdiction, has not yet decided if he will veto the council’s decision or approve the bill.

At presstime on August 2, the bill had not yet reached Gray’s desk and there is speculation that it the DC Council may wait until after Labor Day, when all members are back from summer recess for the bill to be put in front of him. Once Gray receives the bill, he has 10 days to decide on a veto. If he does in fact veto the bill, the council then has 30 days to schedule an override vote, which requires the approval of nine of 13 members.

A day before the DC Council passed the bill (July 10), Alex Barron, Wal-Mart’s regional general manager who is responsible for about 90 stores and 30,000 associates in the DC area, including all stores planned for Washington, wrote in on op-ed in The Washington Post:

“For almost three years, Wal-Mart has worked on a plan to bring new stores to Washington, and we are close to opening our first location in the city. Unfortunately, the District may soon adopt legislation that discriminates against business and threatens to undo all that we have accomplished together.

“In November 2010, Wal-Mart announced a plan to bring more jobs, shopping options and fresh food choices to Washington residents. Just 12 months later, we increased our investment — from four stores to six and from 1,200 jobs to 1,800 — in an effort to expand access and opportunity to more underserved communities in the city.

“During this time, we also engaged in an open dialogue with residents, stakeholders, critics and elected officials. Our goal was to listen, share information about our company, answer questions about our plans and address any concerns.

“Residents told us that they wanted good jobs and more affordable grocery options in their neighborhood. We also heard about issues such as local hiring, competitive wages, an inclusive construction process, local products and support for community nonprofits.

“Through these conversations, it became clear that most residents thought Wal-Mart could be part of the solution in Washington, a sentiment supported by our polling, which showed that 73 percent of residents were ‘in favor’ of Wal-Mart.