Washington DC Mayor Vincent Gray faced a tough choice. Should he sign a living-wage bill that would make him the darling of progressives and unions in the nation’s capital, or should he veto it and cling to the opportunities for job creation in DC? The answer may well surprise readers:
District Mayor Vincent C. Gray vetoed legislation Thursday that would force the city’s largest retailers to pay a super-minimum wage to their workers, ending two months of uncertainty over the controversial bill’s fate and setting up a decisive override vote at the D.C. Council as early as Tuesday.
The debate over the bill, the Large Retailer Accountability Act, has polarized local leaders while garnering national attention and putting focus on the low wages many retail chains pay their workers.
Although the council denied it, the LRAA was squarely aimed at Walmart, long a target of both progressives and unions for their low labor compensation. The retailer had planned to open six stores in DC, and have committed funds to three of them already. The LRAA would have raised the minimum wage in DC from $8.25 an hour (a dollar more than the national rate) to $12.50 in combined wages and benefits, a 50% increase and a huge increase for existing large-footprint businesses as well as new ones.
Well, most new businesses, anyway. The LRAA included a big exemption for one particular class of employers:
The bill would require retailers with corporate sales of $1 billion or more and operating District stores of at least 75,000 square feet to pay their employees a “living wage” — no less than $12.50 an hour in combined wages and benefits. The proposal includes an exception for employers who collectively bargain with their employees, and existing employers have four years to come into compliance under the law.
This was the big payoff to the unions, and the slap at Walmart, which resists unionization. Thanks to this codicil, the grocery stores with which Walmart’s new stores would have to compete would not have to incur this increase in labor costs. Either Walmart would have to facilitate unionization in its stores, or jack up prices to cover the labor costs — a rather bald payoff to Big Labor by the council.
Left unexplained, of course, is why (a) a “living-wage” requirement is only imposed on large retailers, (b) union workers don’t deserve a “living wage,” and (c) the council didn’t just raise the minimum wage. Gray made that point in his veto:
In the letter, Gray said the bill was “not a true living-wage bill, because it would raise the minimum wage only for a small fraction of the District’s workforce.” He added the bill is a “job-killer,” citing threats from Wal-Mart and other retailers that they will not locate to the city if the bill becomes law.
“If I were to sign this bill into law, it would do nothing but hinder our ability to create jobs, drive away retailers, and set us back on the path to prosperity for all,” he said.
The council can still override the veto, but that will take nine votes. The LRAA only got eight votes in its passage last month, and the Washington Post notes that no members have publicly declared that their votes could change either way.
Walmart’s Steven Restivo, senior director of communications in the retailer’s Public Affairs & Government Relations office, released a celebratory statement provided to Hot Air and other members of the media:
Mayor Gray has chosen jobs, economic development and common sense over special interests – and that’s good news for D.C. residents.
Now that this discriminatory legislation is behind us, we will move forward on our first stores in our nation’s capital.
We look forward to finishing the work we started in the city almost three years ago: a plan to bring more jobs, shopping options and fresh food choices to Washington, D.C. residents.
They’re betting on a failed override vote. I’d guess that any such bet is expertly hedged until it actually fails, though.