(Walter Russell Mead) – DC has just become the latest battleground over Walmart’s business practices. The retailer recently announced plans to open a number of stores in the city, but the District government has been throwing obstacles in its path. On Wednesday, the city council approved the Large Retailer Accountability Act by an 8 to 5 vote. The bill would force any non-unionized retailer with more than $1 billion in revenue and more than 75,000 square feet of retail space (read: Walmart) to pay employees at least $12.50 an hour. Minimum wage in DC is $8.25.
Washington Mayor Vincent Gray now has ten days to veto the bill. On the eve of the vote, Walmart executive Alex Barron wrote in a Washington Post op-ed that the retailer would cancel its current plans to build three locations in the District if the law passed.
If the bill stands—or if the Walmart opponents manage to override a Mayoral veto—it’s the city’s residents who will ultimately suffer. Democratic Councilman-at-Large Vincent Orange, a key backer of the legislation, argued that, “The question here is a living wage; it’s not whether Wal-Mart comes or stays….We’re at a point where we don’t need retailers. Retailers need us.”
Mr. Orange is dead wrong. The three stores Walmart is threatening to cancel are all badly needed retail and grocery options in underserved and poorer areas of DC that don’t have many options. As Ezra Klein, no lover of Walmart, writes:
[S]everal of the locations where Wal-Mart has committed to open have very little in the way of retail around them, and Office of Planning Director Harriet Tregoning has emphasized that small businesses in the vicinity should be able to prepare for it. Currently, many District residents are skipping over those small stores anyway on their way out to suburban Wal-Marts; keeping them in the neighborhood might open up opportunities for complementary businesses – such as restaurants or auto-repair shops — to open around them. Finally, many of the developments had been searching for anchor tenants for years; it’s unclear that Wal-Mart could be easily replaced, leaving the sites fallow.
DC is already an incredibly expensive place to live, and a lack of outlets for affordable basic commodities makes scrimping that much harder for middle class and poor residents. Cheaper prices at Walmart mean that in terms of purchasing power everybody in DC gets an immediate pay boost.
Blue politicians who oppose Walmart in DC—and in Chicago, New York and Los Angeles before it—do so with good intentions to help low-paid hourly workers afford life in their overpriced metropolises. Blue-model economic governance has often looked for ways to increase prices for certain producers through things like farm subsidies, taxes, regulation and construction controls. For those that can’t pay, they provide offset subsidies like food stamps.
So one of the main reasons there’s a case for living wage laws at all is that a combination of bad urban policy, overstuffed bureaucracies, excessive regulation and government-endorsed economic cartels have all driven up the cost of living so much that people can’t afford to live on the national minimum wage.
Instead of raising the minimum wage or fighting discount retailers—steps sure to make everything more expensive and create further problems—cities like DC should be working aggressively to bring down the cost of living so that more people can live on the wages they earn.
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