So the DC council just passed a living wage bill requiring stores with parent companies whose revenue exceeds $1 billion/year to pay all employees a living wage of $12.50/hour. The bill will go into effect unless it is vetoed by the Mayor. The bill seems to be aimed squarely at Walmart, who is building 6 stores in the district (3 are nearly completed). Walmart says that if the bill is signed into law, they will abandon the stores. I am kinda torn on this issue. The best points on either sides as I can see them are:
PRO:
Walmart (and similar stores) growth is being subsidized by the government via resources like food banks, shelters, Medicaid, and food stamps. Walmart has been active in helping its employees get those government benefits.
Walmart can afford it, and it would go a long way towards making it’s employees self-sufficient and financially stable.
Walmart needs DC (and other urban areas for expansion) more than DC needs Walmart.
Sends a message to anti-union shops like Walmart that the government can step in to advocate for workers’ rights if Walmart doesn’t allow them to.
People have a basic right to earn a living wage that allows them to live independently, and with dignity.
CON
The bill specifically targets large retailers at the expense of smaller ones, which has the effect of driving more qualified employees to big box stores, and cutting profits at those same stores.
It makes a specific exemption for union shops even though they may not pay a living wage.
A poor paying job is better than no job.
Sets a precedent that the government can single you out if you become too successful or profitable.
Given DC’s small size, consumers can just go to Maryland and Virginia in search of more competitive prices in the event that DC Walmart prices are high due to increased labor costs. Additionally, the money will be spend outside the district by employees who work in DC, but live in other places with lowers costs of living.
Since the studies seem to be all over the map on whether Walmart creates jobs or saves them, and whether living wage laws are good at alleviating poverty, I am really torn on how to feel about this. Is this law a good idea? Should Mayor Gray veto the bill.
The Mayor of D.C. is wrong to ask for $12.50 at this time. WALMART and all big
retailers are at this time being clobbered by the ACA provisions for “health insurance
by all companies have 50 or more employees.”
This is simply the wrong time to decree or legislate a minimum wage increase.
In principle I agree that American cities should legislate a living wage for ALL hires
within their jurisdiction. In fact a town in Arizona (or New Mexico) approved a $10
minimum wage for all employees years ago. AFAIK the ordinance was successful.
However we now need to give capitalism a break so that corporate American can
adjust to the 2014 and 2015 Obamacare changes.
It looks like the law was written to address Wal-Mart only which I don’t believe exists in the D.C. borders. I imagine this is just part of the continuing effort by D.C. to block a specific business from operating inside their borders. I don’t feel that is wise, nor do I necessarily think it should even be legal–but I’m also mostly unconcerned if politicians in a small legal entity a few hours drive north of me want to do foolish things.
I’m not really convinced $12.50/hour is much of a living wage in D.C., either. I know people in government jobs in the D.C. area making $60,000/yr and they struggle mightily compared to what that would get you in other places. Most of them can’t afford nice cars if any cars at all, live in very cramped quarters, and the ones who live decently at all have spouses earning at least as much or more and they live in a small apartment so they get some “home economies of scale.”
We had a few threads on the minimum wage awhile back, and I pointed out back then that all the studies we had really found on the issue suggested that minimum wage laws don’t really appear to have a significant economic impact. There are many low income Americans, but there are few low income Americans who are adult, non-seasonal, non-student, perpetual minimum wage earners.
I think for most hourly, entry-level Wal-Mart employees the pay ranges from $8.50-10.00/hour or so with the higher end being longer term people who have scratched out raises. So this would be higher pay for them. Wal-Mart could most likely afford to pay that higher wage and still keep its prices low and maintain healthy profit margins. But the question is would they want to do so? I suspect not, just like they have pulled out of places that were close to unionization, I think they would decline to open a store in a jurisdiction so hostile to it and trying to push it on labor issues. I think Wal-Mart would see it as, “if we set up shop there after letting DC dictate how we pay people, we run the risk of making municipalities everywhere we operate do the same thing.” Sort of similar to their fear of union “contagion” if they allow one store to unionize in one jurisdiction.
I’ve lived a lot of my life in Virginia but not the NoVa area, but I do get up to DC enough to know that parts of DC are definitely in my opinion a classical “food desert” (I don’t know if they’re officially classified as such by any entities.) There are lots of little shops owned by Koreans and such in DC but a common problem with little shops is they don’t stock the staples or if they do they are of low quality, they tend to stock junk food. For whatever ills you think Wal-Mart has, they have a robust grocery section. When Wal-Mart goes into poor communities by and large the people who shop there end up with more money in their pocket and suddenly have access to far more products, especially grocery products, than they had before. Products they don’t have to ride 2 hours on a bus to get or drive to buy (which is not an option for many urban poor.)
Actually it does look like parts of DC are officially defined as food deserts (link) I’m mostly just adding this because I found that mapping tool which I had never seen before and found it interesting.
Under the original definition of food desert, a portion of DC is classified as one (meaning low income people are more than 1 mile from the closest supermarket.) Under the expanded definition (low income census tracts where a significant portion of residents are more than .5 miles from the nearest supermarket) a substantial portion of DC is considered to be in a food desert.
I’ll repeat whatever your beliefs about the effect of Wal-Mart on local businesses and economies, there is no food desert next to a Wal-Mart.
I’m not sure sure about the definition given the extensive, cheap ($1.60 round trip if you return within two hours), bus service in DC. The map is deceptive; many of these patches don’t have many people living in them. Once you subtract military bases, parks, schools, cemeteries, and commercial areas, there’s not much left in the “LI and LA at .5 and 10 miles” category that I think we’re both looking at.
That’s not to say there aren’t locations with poor access, I’m just sure how to figure out what is a real problem (the map does not show this) without playing “find the Safeway” with random street corners on Google Maps.
Does anyone know where these Walmarts are proposed? Will they actually alleviate any of the deserts? Or will they exacerbate them by putting some of the small markets (where I shop) out of business?
The term “living wage” always rubs me wrong. I’m not sure what it’s supposed to mean. And it seems arbitrary. Why not $10.50/h? Why not $20/h?
It’s almost impossible to tell where there is a problem with access because the definition only includes certain types of stores. It makes some sense not include food sources such as the gas station convenience store, but it doesn’t really make sense to say that someone lives in a food desert if the nearest supermarket is a mile away , but there is a small grocery store , fruit market and butcher within two blocks.
It depends on what type of small stores are near by. I know of neighborhoods where many of the residents can only afford food from small bodegas or convenience stores, that offer a very limited selection of healthy food and a lot of junk food for cheaper. [We also have evidence the people want that junk food and have no interest in the healthy food, which is another problem.] Living near a gourmet food shop or a good butcher doesn’t necessarily mean you can afford to shop there.
Places like Giant, Wal-Mart and similar places with huge supermarkets in them offer stuff for a lot cheaper. A lot of the meat is vacuum sealed and frozen and not the quality you’d get from a butcher, but it is still at minimum USDA Select, healthy meat and a lot healthier than Funyuns or whatever someone might buy at a lower scale store.
Of course it matters what type of small stores are nearby- that’s my point, that these surveys never take that into account. It’s not as if every small store is either a convenience store or a gourmet shop - the ones in my neighborhood mostly aren’t.
So Walmart should be forced to hire all unemployed people, too?
I don’t get this “living wage” business. Why don’t we have the government give people cash to live on, and let the free market do what it does best? In other words, remove some of the worst effects of ruthless competition, while keeping the freedom and progress it brings?
If you increase the costs of hiring someone, you’ll reduce the number of jobs and hurt the very people you’re trying to help. Why not make it to where it doesn’t matter how shitty your job is, or even whether you have one, you still have options, like learning a new skill and starting your own business. It will keep employers from treating people like shit, too, because why put up with that when you don’t have to?
“Living wage” laws lock poor people into shitty jobs while locking many unemployed people out of the workforce. Better to just give them cash, if you ask me.
If you zoom into Washington, DC, there’s a “box” looking shape in the far north of DC. One Walmart is proposed to be located at Georgia Ave and Missouri Ave, just west of that box. Another Walmart is proposed for South Dakota and Riggs, just east of the box.
If you look down in Southeast DC, there’s a fairly large strip that runs along the border with Maryland. One Walmart would be placed at the southwestern tip of that strip, at Good Hope Road and Alabama Ave.
And if you look at at the largest green area in DC, a lot of that runs right along New York Avenue. One Walmart would be placed at NY Ave and Bladensburg Ave, which is right in the middle of that area.
So of the six Walmarts planned for DC, four of them would definitely be serving food deserts.
I’m really not a fan of Walmart’s business practices. I never shop there, but it’s hard to get away from the conclusion that DC residents, even without the living wage bill, will probably get significant benefit from the new stores.
ETA: I’m using the ‘original’ food desert setting, with 1 and 10 miles.
First, I didn’t say any of those were my arguments. Second, don’t waste everyone’s time making asking foolish questions.
Well, the idea is that the social safety net is being abused by the free market since they can offer lower wages that will then be offset by government handouts. Walmart, and other businesses of that size, seem far more inclined to assist their employees in taking advantage of these programs. Given that the safety net isn’t going away, there need to be a way to counteract the distortive effect it can have on wages.
Maybe, maybe not. The data is not very clear on this at the level we are talking about. Plus, we in fact may better off fully subsidizing one person’s existence than partially subsiding two. Not just in directly in terms of dollars, but also because one middle-ish class job is probably better than two poverty level jobs in a number of other ways. There are many studies that link lack of social mobility to stress created by poverty. If you can pay someone enough to alleviate the day to day stress of having to worry about feeding yourself, you might make out better in the long run.
Well, there is a good amount of research that really shitty jobs often limit your options in reality. Besides, do you really think the people working for minimum wage at Walmart are learning many marketable skills, or starting their own businesses?
This bares little resemblance to anything I have observed in real life. There is a near infinite number of people who will volunteer for shitty jobs. Have you ever heard of a place like Walmart struggling to hire people, especially in urban areas? They have a well-deserved reputation for not treating people well, yet it doesn’t seem to make them have to raise their wages, or treat people better.
The idea is that a living wage job is not a shitty job.
I work for a large discount retailer (not WalMart) with locations in the DC area but not in the District itself. Normally lower-income areas and urban food deserts are locations we like to target, but I can’t imagine we would ever open a store if we had to pay $12.50/hour minimum. I doubt the store could be very profitable that way, and certainly less profitable than using our finite resources toward opening a store elsewhere.
I’m not a fan of these sorts of living wage laws in general, nor am I a fan of Walmart and will generally avoid shopping there, but that aside, this law really bothers me. If a law is going to be passed to provide a living wage law, it should apply to all, or at least most, businesses, and not be targetted at just a small number or, as it appears here, just one. Why should employees of one particular business be more worthy of a “living wage” than employees of another? If it really is about helping the poor, it should be applied much more universally.
And as others have pointed out, this seems even more foolish for DC. The city has a great need for exactly the sorts of jobs that a Walmart can provide and exactly the sorts of products that it sells. The most poor are stuck either shopping at the small, often more expensive, stores or going out of the city into Maryland or Virginia. Hell, chances are many of the working poor are stuck going to places like Walmart outside the city and would see some benefit just from being able to work and shop closer to home.
So, it seems to me, that all they’re really doing is shipping some of that business and some of those jobs out to Maryland and Virginia. I think they’d be better off letting them put in their stores and getting the tax revenue and using that to help the poor instead.
The Gonzaga location is located fairly close to Union Station and about six or seven blocks from Gallery Place. There is a Harris Teeter maybe a mile from there, and a Giant just opened up on 3rd and H NE. There is also a Safeway on 4th and L NW. That particular neighborhood is particularly well served. (I’m most familiar with this area since I go through there every day on my commute.
The location on Georgia Avenue is close to a Safeway. For the most part, that location is fairly low density with a lot of row houses and single family homes nearby. I recall there being opposition to this location because the people who lived there were concerned that this was going to screw up traffic. That isn’t a poor area and the house prices there are fairly shocking. Someone I know was looking at a $600,000 fixer upper nearby that sold within a week.
The location near New York Avenue is located in a food desert according to the map but that area is not really all that residential. The Wal-Mart there will pretty much require you to take a car as Metro doesn’t run nearby. I’m sure that the buses run through there, but I couldn’t tell you which bus line that is. There is a Costco that is further down where New York Avenue hits South Dakota that I don’t think is being counted on in the map. They are also opening a Shopper’s there so that won’t be green for long. That part of DC has a large chunk of light industrial uses along New York Avenue and Bladensburg and fairly low residential density. Most people living there probably have cars to get around.
The Capitol Gateway location is on E Capitol near the border with Maryland. It isn’t showing up on the food desert map as being in one. I don’t know that area at all, so I have no idea what is near there, but it looks like there is a Giant just over the border in Maryland.
The Fort Totten location is a food desert although the size of it is deceptive. A good chunk of it is made up of Catholic University. Fort Totten has a Metro and is developing so I would imagine that a grocery will open up there soon even without Wal-Mart.
Skyland is the location where Wal-mart has the most leverage. That has been a pet project of the Mayors for a long time. Wal-Mart was going to be an anchor for the entire project. It is a food desert.
I was looking at the map and part of the huge chunk in NE that was highlighted is the Langston Golf Course, the Arboretum, and Kenilworth Aquatic Gardens.
I’m not a huge fan of the bill since it seems to be targeting Wal-Mart as opposed to Target, and some other big box stores. I’m not sure that Wal-Mart not coming to DC will have much impact on things since there are a lot of grocery stores that will still be able to open up.
In general I agree, but Walmart is actively avoiding cost increases due to Obamacare.
Actually, many in DC government actively sought Walmart, which makes the law kinda strange and a bit unfair in my opinion.
True, but like most things, it matters how you spend your money. Look at this map of income by metro stop. The proposal would mandate basically a 25k/year salary. Some metro stop areas only have a median income around 35k. You won’t be rich making that kind of money, but you can get by reasonably well if you are responsible.
Probably. You never know as they are pretty recalcitrant as you suggested. But Walmart profits are not growing as fast as they once were, and I think they are eager to get into more urban areas. I think at worst they would not open 3 of the 6 stores.
I doubt it only because that is a losing proposition for Walmart in the long run. It one thing to crush unions given that people are not in short supply. But there are not too many places Walmart can go. Thriving big cities (like DC) don’t need Walmart. That is the fact that made them consider passing the law in the first place. Whether or not Walmart caves in this case doesn’t really change the calculus much for most city governments. If DC passes this law, I don’t see small cities being emboldened by this given they often rely on Walmart more than vice versa. `
Good point, but public transportation in DC is good and cheap enough to make this less of an issue than it would seem.
I believe in this case it’s roughly 50% more than minimum wage.
That’s the bigger question I guess. Some places like Costco pay more than the proposed amount, so they would not really be affected. Others like Target are either exempted for the time being, or have not put up much of a fuss. Regardless, I don’t think the law will force all large retailers out of the city. One study concluded a Walmart costs city governments roughly $1mm/year per store. I think they question becomes whether they provide enough benefits to merit such a cost. It really a math question, but the numbers are not easy to figure out.
As a Washingtonian, I was opposed to the law until Wal-Mart became so heavy handed in their response, including push polling akin to what they did in Chicago. The bottom line is that Wal-Mart needs DC and other cities more than those cities need Wal-Mart. There is a diversity in DC’s retail environment that Wal-Mart is not accustomed to encountering when operating in small rural communities. It’s all about what the market will allow, and I think Wal-Mart will cave if DC doesn’t cave first (that’s a big if).
I strongly disagree. The fact that DC has developed so much in the last ten years is that it has attracted new stores, and along with it, much more real estate investment. Those investments has turned around places like Columbia Heights, but really haven’t done that much (as far as I can tell) for other parts of the city, like Wards 5, 7 and 8. That’s where unemployment is at its greatest, where problems like food deserts are at their worst. And those are the same places where Walmart is putting its stores.
Yes, people who live in Dupont Circle already have their Whole Foods and a bunch of other great things; they don’t care about Walmart. Rich people can afford not to care about jobs in the poor parts of the city. It’s the poor parts of the city that need investment, and as much as I don’t like to defend them, Walmart is the anchor of that development.
True, but you could say the same about Columbia Heights 10 years ago. Investment will get to this areas as well with time, and jobs will come.
Who says the people Walmart hires will be from those areas, or that the Walmart money is going to stay in the city. Sure, it might mean cheaper prices for some of the people who live nearby, but it doesn’t mean it benefits DC as a whole if Walmart is costing more in aggregate than it save people. That’s not to say a net negative is always bad if it is essentially a wealth transfer from rich to poor, but Walmart acting as a middle man who takes their pound of flesh doesn’t sit right with me.
I can’t speak for Wards 7 and 8, but Ward 5 has the Home Depot shopping center which has a Giant, the new Costco and the shopping center which is going to be built there, and the proposed new development in Brookland. For a part of the city that really isn’t very densely built, they aren’t doing that badly in terms of retail.
I do think that the law is somewhat ill conceived since all Wal-Mart has to do is open up on the other side of the Maryland border in PG County. I also really don’t like the idea of one retailer being targeted since it feels almost like a shakedown.