Walmart Threatens Nuclear Option Over Minimum Wage Increase
In Washington, D.C., lawmakers are set to vote on a bill Wednesday that would raise wages by nearly $5 in attempt to break the chain of poverty in the district. However, as the vote comes to the floor, Walmart is crying foul and even threatening to cancel plans for new stores it had planned to open in the capitol. In an area already starved for large retailers, does Walmart have a responsibility to the communities it serves?
The Large Retailer Accountability Act (LRAA) aims to require large retailers to offer a living wage to its employees at $12.50 an hour, a sizeable leap from the District's set minimum wage of $8.25. According to the Washington Post, the bill defines a large retailer as one with a parent company with annual revenue of $1 billion. A draft report cited the Costco Model, wherein paying employees a living wage results in lower labor costs and greater profit margins overall.
Proponents of the bill say that large retailers can afford the rate adjustment. DC Council member Vincent B. Orange commented, "Washington, D.C., is the hottest market, not just for businesses but for residents, and they have a lot of disposable income. I believe businesses are going to come in and get this anyway."
Walmart, however, is calling it a "bait-and switch" tactic. Company spokesman Steve Restivo says that the deals brokered for the upcoming six Walmart stores in the Distract were based on current market conditions and regulations. He commented, "… We had no reason to believe that any of those business conditions were going to be changed."
While Walmart has every right to pull out of the District if they so choose, their argument based off of raising the wage seems unfounded, given that they had promised earlier to both the city and local community leaders that it would pay its employees well above the DC minimum wage, even declaring that it would start at $13 an hour. Restivo confirmed the pledge.
Additionally, all large retailers, including Costco and Home Depot, would be affected, creating a level playing field for box stores.
So if the District wants to set the floor to a standard for all retailers where's the issue? DC has long struggled with pockets of poverty and the target areas for the new stores have been historically plagued with food deserts. Opening a Walmart in these areas would bring living-wage jobs and access to higher quality food at more affordable prices. It would only seem logical that Walmart would jump at the chance for this expansion.
But dedication to the community has historically been a low priority on the Walmart radar. It resisted opening stores in Northeast D.C. in the past due to high crime rates. Considering high crime rates are linked to poverty, and poverty is linked to employment and wage rates, Walmart is turning a blind eye to a bigger systemic issue regarding its potential employees and consumers.
Mike Wilson of Respect D.C. said it best: Walmart "just doesn't like being told what to do." Unless it's on Walmart's terms, D.C. consumers won't get the chance to "live better."