Walmart Gets Anxious Over Demands For Living Wages in Washington D.C.
Walmart, the country’s largest retailer, has come to be known for its controversial business practices as much as its employees' distinctive blue vests. For years, labor unions, human rights activists, and documentary filmmakers have all criticized the corporation’s treatment of its workers, often forcing the company to respond. In its latest battle, however, Walmart has taken on a third-year college student.
Erin Riordan, a junior at Georgetown University, wrote an op-ed for the school’s newspaper, The Hoya, in support of the Large Retailer Accountability Act. LRAA is a piece of legislation currently making its way through Washington, D.C. city government that would require large retailers — including Walmart — to raise their minimum wage for employees in the District to at least $12.50 per hour, what is considered a “living wage.”
In a move atypical for such a large corporation, Walmart decided to respond to this piece. Senior Director of Communications Steven Restivo contributed his own op-ed to The Hoya, responding to Riordan’s points and outlining reasons why he believes the LRAA would be bad for Washington, D.C.
The act that has become a point of contention would require retailers whose locations occupy over 75,000 square feet of space, and whose parent companies gross more that $1 billion annually in global sales, to pay their employees $12.50 per hour. This number, which translates to $26,000 per year, is the amount calculated to be the living wage: the minimum salary a Washington, D.C. resident needs in order to cover the basic costs of food, shelter, clothing, and health care. These are costs that cannot be covered with a minimum wage salary, currently set at $8.25 per hour in D.C.
The LRAA passed through the D.C. City Council on an 8-5 vote, and now is waiting on Mayor Vincent Gray to sign it into law. But Walmart has not been hesitant in expressing its disapproval of the act. On July 9, just before the final vote on LRAA, the company announced that it would pull three of the six stores it had planned for the District if the measure passed. All three stores they planned to pull would be located in the most economically disadvantaged areas of the city. Between this action and Restivo’s response to Riordan in the Hoya, it’s clear that Walmart is intent on preventing LRAA from getting through.
I caught up with both Riordan and Restivo to get their take on the matter.
About Steven Restivo’s response to her piece, Erin had this to say: “I found it somewhat hilarious and ridiculous that a senior communications director responded to a college student’s op-ed.”
Restivo, however, found it appropriate to respond. “When there’s misinformation, people deserve to know,” he said in a conversation I had with him. “Whether it’s in [a national newspaper] or The Hoya.” When I asked what about Rirodan’s article was misinformed, he said that the article “speaks for itself.”
Misinformed or not, Rirodan’s article takes a strong stance on living wages. According to her, the question is not whether Walmart can afford to pay its employees more than the minimum wage — it’s whether it chooses to.
“If they wanted to, they could pay living wages. It’s their choice not to,” said Riordan. “It comes down to which business model Walmart has chosen, and they’ve chosen one that’s based on oppression and exploitation.”
In her piece, she cites a 2011 study out of the University of California which found that if Walmart were to transfer the entire cost of the $12.50 wage to their customers, it would only cost people 46 cents more per shopping trip. She also mentions an earlier promise Walmart made to pay its D.C. employees $13 an hour.
In his op-ed, Restivo claims that the company doesn’t need LRAA to set a wage floor for them because already, “Walmart’s wages meet or exceed our competitors’.” He says that the average wage for full-time employees in nearby Virginia is $12.39 per hour. Rirodan, however, doesn’t buy it.
“The comments about paying a similar wage to competitors are false,” said Rirodan. She mentions Costco, another large retailer, that is able to pay most of its workers an hourly wage of $20.89, and has a very low employee turnover rate. She also points out that Walmart’s $12.39 average wage is a misleading statistic, because it is influenced by extreme outliers such as managers, who Restivo himself claims can make up to $170,000 per year. A more accurate gauge of how they treat the majority of their workforce, she says, is the median wage, a statistic that Walmart has not made available.
When I asked whether Walmart would object to paying its employees $12.50 per hour, with or without a law, Restivo maintained that Wal-Mart would pay its workers a “competitive wage” compared to other businesses, but offered no numerical specifics. He insisted, though, that people do want to work for Walmart. “People who work in our stores have worked in retail before,” he said. “They know what a good retail company looks like, and consistently come out in droves to work at Walmart.”
But D.C. residents may never get the chance. Walmart officials, as well as other critics of LRAA, believe that the law is designed to keep the company out of the District. One of their biggest objections is that the bill would create “an uneven playing field” amongst large D.C. retailers because it would exempt companies with unionized workers. An article from The Economist says, “The bill did not mention Walmart by name, but it might as well have. It does not apply to Walmart’s unionised rivals, such as Giant and Safeway.”
Whether or not this is actually the case isn’t clear. The wording of the bill is ambiguous enough that no one is really sure whether union workers will be entirely untouched by LRAA’s living wage provisions. But the very possibility of a union exemption seems enough to upset Walmart and like-minded critics. Additionally, there are other aspects of the bill, such as the square-footage requirement, that do appear to target Walmart uniquely.
Despite all of this backlash, Riordan continues to believe in LRAA and wants to see it signed into law. To her it represents an opportunity for a better quality of life for many D.C. residents, and an ability to break a cycle of poverty that has adverse impacts for society at large. She hopes the bill will set a precedent for companies nationwide about the treatment of their employees. “This bill sends a message that companies need to be responsible to communities, responsible to residents,” she says. “We live in an economy where tens of millions of people work in low wage jobs, and if we want to recognize the fact that everyone is entitled to a decent life, we need to start paying people a decent living.”
There are several different, impassioned forces at play here: Walmart, as well as other major retailers, are resistant to LRAA because of what it can mean for their bottom line. Labor rights activists like Riordan support the bill because of what it can mean for the residents of Washington, D.C. Which side will win out will be determined by Mayor Gray. But whether LRAA or Walmart prevails, one thing is certain: Big changes are coming to Washington, D.C.'s economy.