Walmart has threatened to stop construction on three stores in Washington D.C. and to cancel plans for three more if Washington goes ahead with a dramatic increase in minimum wage to $12.50 an hour. Walmart argues that the bill arbitrarily discriminates against large retailers, and that is at least partly true. The measure under consideration would only apply to stores of at least 75,000 square feet and $1 billion in annual corporate profits. This net catches Walmart, Best Buy, Home Depot, Target and Macy’s, but not Starbucks (enough profits, but under 75,000 square feet) or local supermarkets like Giant Foods (possibly enough space, not enough profits).
Walmart has done this before. The country’s largest retailer helped convince Mayor Daley of Chicago to veto a living wage bill seven years ago, and they negotiated tax breaks with New York when the Empire State raised its minimum wage. However, they did agree to contribute $21 million to D.C. charities, stock local products, fund transportation measures, fund local transportation measures and create a job program for at-risk and low-income workers. That’s quite a wish list. It’s hard to know how much they would have done on each of those items, but as long as they held to those conditions, that does sound like a good deal.
That said, Walmart can afford to throw its weight around, and it is quite aware of the precedent it sets in each of these cases. Acquiese to Walmart, get the jobs and GDP that come with its stores, refuse and those dollars go somewhere else. The fact of the matter is that Walmart can pay its workers a higher wage, but they don’t want to, because that means less profits. If the minimum wage was $3/hour, they would grumble just as much if D.C. tried to raise it to $5. While three to six more Walmarts in D.C. would help its economy, having its lowest income workers earn more would have a broader and longer term effect. Congresspeople, their staff and the lobbyists who write our laws (yep) are in D.C. and aren’t going anywhere. There will be money in the city, and the higher the minimum wage, the more of it will make its way down to Washington’s down and out lower class.
If Washington D.C. needs a compromise, I'll suggest one: phase the increase in over two years, and require a reauthorization at $11.50 to get it up to $12.50. Also, drop the space requirement to include Starbucks, Subway and McDonald's. Deal?