Wisdom of DC living wage ($12.50/h) bill for big box stores

[DrCube]

@brickbacon

First, I didn’t say any of those were my arguments. Second, don’t waste everyone’s time making asking foolish questions.

If a living wage is a right, does that not imply that unemployed people also have that right? Why is that a foolish question?

And if those aren’t your arguments, then I’m not arguing against you. Please don’t take it personally either way.

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.

And I’m saying everyone’s income should be subsidized by a government safety net, from Bill Gates on down to the homeless. So no more distortion. And dismantling the means-testing, eligibility-requirements bureaucracy will save us a lot of money towards that end. And then the unemployed get the same rights as everyone else.

Essentially, I’d like to see SSDI offered to every adult American whether they are disabled or can get a job or not. Instead of discouraging finding work then, everyone would be encouraged to supplement their government income with a job. I’d also suggest that when that happens the minimum wage becomes unnecessary and we’ll see a freer job market, with all the benefits that entails.

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.

Right, so why do those problems not apply to the unemployed?

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?

No, they aren’t, hence why I suggest a minimum income be provided to those people. That way if they want to sacrifice their Walmart wages for a period of time, they can scrape by on safety net money while they learn to program a computer or try their hand at running a business. That’s an option that a “living wage” essentially closes off.

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.

My proposal offers people the possibility of living without a job. Not living well, but scraping by. This gives people an option to quit if they don’t like how they are treated at work. Neither today’s minimum wage slave nor this thread’s proposed “living wage” slave have that option.

The idea is that a living wage job is not a shitty job.

But it very well could be, there’s nothing in the living wage that prevents it that I see, and then those people are trapped.

[brickbacon]

@Caffeine.addict

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.

I don’t think Walmart can do that. MD is not a viable alternative in many of the proposed areas. For example, the Georgia Ave location is closest to Takoma Park, MD. The chances of them being able to build there are less than zero.

That said, I agree with you somewhat on the shakedown part. In many respects it is. I guess I question whether DC government bullying Walmart is more coercive, unfair, or objectionable than Walmart doing the same to their suppliers, customers, other governments, and employees? Additionally, given that the people the beneficiaries in this case, part if me thinks this shakedown couldn’t happen to a more deserving company.

[Ravenman]

@brickbacon

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.

Let’s get real now. There’s a reason that big retail came to Columbia Heights, and the reason isn’t inevitability. The government lured them there, with this. The development of Chinatown started with large tax breaks. Developers in Brookland (like Abdo) got tax breaks for their projects. To my understanding, however, Walmart has said that it isn’t seeking those same types of tax incentives for these stores (though I don’t know if the developers of the sites where Walmart will locate pursued tax breaks).

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.

Just as a common sense test, I think it is much more reasonable that given a low-wage job at some particular location, that most people who take those jobs will live fairly close to that location. Whether those people come from inside DC or just over the border in PG County, I’m not sure that makes a huge difference in terms of economic development. I don’t think it is realistic or even advisable for a city to pursue a policy of economic isolationism, where pay and taxes are required to remain predominantly within the city itself, to the exclusion of surrounding areas.

But I am interested in your point about whether Walmart will cost DC more in the aggregate than it saves people. How do you figure this is possible? I understand that Walmart workers will probably still be on their own for Medicaid and other benefits that I really think Walmart should provide, but I just can’t figure out how Walmart would make the costs for DC go up.

I mean, take a random under-employed person. They are eligible for Medicaid whether they work for Walmart or not. If they currently don’t receive Medicaid benefits, and Walmart helps them do so, why count this as a “cost” and blame Walmart? Having an underemployed person raise his income, and get the government benefits he’s entitled to, seems like all good news for me.

Now, I strongly wish that Walmart would pay for health care for its workers, and I’m not chagrined that someone is pushing Walmart on their pay and benefits. But at the end of the day, I think compromise is much, much preferable to hard-line stances that would drive three Walmarts out of DC.

[madmonk28]

The Georgia Avenue location is aready going up, I drive by it every day. Wal-Mart has said it will continue with the stores that are already under construction. Dn’t get me started on what that store is going to do the traffic at Georgia and Military, it was already a mess.

[Caffeine.addict]

@brickbacon

I don’t think Walmart can do that. MD is not a viable alternative in many of the proposed areas. For example, the Georgia Ave location is closest to Takoma Park, MD. The chances of them being able to build there are less than zero.

:D, That’s why I limited it to PG. I was thinking of the Montgomery County border, and the thought of them opening up in Takoma Park or Chevy Chase gave me giggles. I guess they could potentially open up in Silver Spring, but I can’t imagine where since that area is pretty built up.

[brickbacon]

@DrCube

If a living wage is a right, does that not imply that unemployed people also have that right? Why is that a foolish question?

No, it doesn’t imply that people have a right to a job. Again, I am not sure why you think it would. Does the minimum wage imply you have a right to a job? All it is doing is setting the conditions under which an employer can hire an employee.

@DrCube

And if those aren’t your arguments, then I’m not arguing against you. Please don’t take it personally either way.

Sorry, my tone was harsher than it needed to be. Either way, I don’t think this line of argument is worth debating much.

@DrCube

And I’m saying everyone’s income should be subsidized by a government safety net, from Bill Gates on down to the homeless.

So are you saying Bill Gates should get SNAP benefits and the like? If so, that makes no sense to me.

So no more distortion. And dismantling the means-testing, eligibility-requirements bureaucracy will save us a lot of money towards that end. And then the unemployed get the same rights as everyone else.

@DrCube

Essentially, I’d like to see SSDI offered to every adult American whether they are disabled or can get a job or not. Instead of discouraging finding work then, everyone would be encouraged to supplement their government income with a job.

Why would they do that if are comfortable on the dole? And if they are not making ends meet under your system, why do you think there will be jobs for everyone that needs them to make said ends meet?

There are plenty of people now on SSDI that could work, but don’t because they are comfortable living off those wages. Why would someone work a shitty job if they don’t “need” the money?

Plus, SSDI is insurance. Lots of people pay in to it so a much smaller number of people can get some money if the situation arises. It doesn’t work if everyone gets it. But even if you are suggesting a straight up transfer of monies from rich to poor, I don’t see how that incentivizes anyone to work more.

@DrCube

Right, so why do those problems not apply to the unemployed?

Certainly they do. But it does matter how and why they are unemployed.

@DrCube

No, they aren’t, hence why I suggest a minimum income be provided to those people.

I guess I am not really understanding your system. Please explain exactly what you are proposing if you wouldn’t mind? Also, why is you system of a minimum income that comes from the government (presumably via taxation) better than if it comes directly from employers?

@DrCube

That way if they want to sacrifice their Walmart wages for a period of time, they can scrape by on safety net money while they learn to program a computer or try their hand at running a business. That’s an option that a “living wage” essentially closes off.

Why would a living wage close that off? That job is one that would provide the resources to do the things you mentioned. How would one learn to program or run a business with no money and no income? I guess you could give them money like you suggest, but where does that money come from given we are in a lot of debt as a country, and that said money/resources would need to be more than they currently are.

@DrCube

My proposal offers people the possibility of living without a job.

You don’t want to offer everyone the ability to live long term without a job. Anything that enables that to happen is bad in most cases. We give most people the ability to do that in the short term via unemployment, food stamps, etc. I don’t see how your suggestion improves things.

This gives people an option to quit if they don’t like how they are treated at work. Neither today’s minimum wage slave nor this thread’s proposed “living wage” slave have that option.

@DrCube

But it very well could be, there’s nothing in the living wage that prevents it that I see, and then those people are trapped.

Okay, why don’t we try to discuss mainly what is on the table policy-wise, and not ideal scenarios.

[even_sven]

Municipalities have every right in the world to limit nuisance businesses. If I want to open up a manure processing plant downtown, I shouldn’t be surprised if the city decides that the larger impact on quality of life will outweigh any benefits.

Gentrification is a tricky issue, but from the city’s perspective, some pretty exciting economic things are happening right now. DC is experiencing unprecedented population growth, primarily from prosperous young people who in previous years would have retreated from the suburbs. These new urbanites are fixing up previously blighted neighborhoods, opening up small businesses, investing in their local schools, creating grassroots social services, and generally changing a lot of things for the yuppier.

Now there are of course complications in terms of social justice, race, and the realities that this is squeezing many people out of the city, but from the city government’s perspective, it’s all gravy. Who wouldn’t want to run a city of wealthy, socially active young families? And if the poor pack up and move to the suburbs (which are conveniently in other states), why would you want to discourage that?

So in a city as in-demand and expensive as DC, where the average rent for a one-bedroom apartment is $1,389, a business that pays its workers poorly is a nuisance business. It is a drain on limited social services, it’s a magnet for crime, and it cements poverty into areas that will soon, if left as is, be filled with yuppies. If your goal is to run a safe and prosperous city, letting WalMart move in without some real promises that they won’t increase poverty would be a pretty dumb move.

[Ravenman]

@even_sven

So in a city as in-demand and expensive as DC, where the average rent for a one-bedroom apartment is $1,389, a business that pays its workers poorly is a nuisance business. It is a drain on limited social services, it’s a magnet for crime, and it cements poverty into areas that will soon, if left as is, be filled with yuppies. If your goal is to run a safe and prosperous city, letting WalMart move in without some real promises that they won’t increase poverty would be a pretty dumb move.

What in the world makes you think that Riggs Park, Naylor Gardens, or Langdon are soon going to be filled with yuppies? Are you high?

[BrainGlutton]

Why is it limited to big-box stores?

[Diceman]

I would argue that DC needs Walmart much more than Walmart needs DC. DC is too small to be able to play this sort of hardball game. Walmart can set up some stores just over the border in Maryland & Virginia, and the people of DC will happily commute to them to save money.

Look at Detroit, which has one of the most notorious “food deserts” in the US. Almost everybody in Detroit drives to the suburbs to shop. It’s been going on for generations now, and shows no sign of charging any time soon. In Detroit’s case, this is largely because there is a city income tax (rare in Michigan; I believe only a couple of cities have them), and it is a huge disincentive to businesses that might consider locating in Detroit. Autoworkers who pay Detroit city income taxes receive a contractually-obligated cost-of-living adjustment to make up for it, but of course most businesses just say, “Fuck it, I’ll set up shop in the suburbs.”

[Caffeine.addict]

@Ravenman

What in the world makes you think that Riggs Park, Naylor Gardens, or Langdon are soon going to be filled with yuppies? Are you high?

If someone told you ten years ago that Trinidad and Shaw would be gentrifying, would you have believed them?

Speaking of Riggs Park, have you noticed the new single family homes being built on New Hampshire NE, and Peabody? Those are going for the high sixes and low sevens. Who do you think are buying those? As for Carver Langston, the Flats at Atlas are on that side of Bladenburg and are renting for a chunk of change. Considering that Kingman Park is also gentrifying, I can see Carver Langston gentrifying in the next ten or fifteen years.

[Ravenman]

@Caffeine.addict

As for Carver Langston, the Flats at Atlas are on that side of Bladenburg and are renting for a chunk of change. Considering that Kingman Park is also gentrifying, I can see Carver Langston gentrifying in the next ten or fifteen years.

Clarifying: I said Langdon, not Langston. Langston has the Arboretum and the golf course, Langdon has the strip club and the KFC where the serial arsonist worked.

[XT]

@BrainGlutton

Why is it limited to big-box stores?

Because it’s obviously targeted directly at Wal-Mart. The cover is that (to paraphrase) ‘they can afford it’, but the real reason is that this is pretty obviously targeted at the fact that Wal-Mart is putting in several store into the District where none existed before.

As to the OP, I’d say that the wisdom of doing this depends on how it plays out. If DC manages to bully Wal-Mart into going along (assuming this gets signed), then it will play well to the base voters in DC, so it will be fairly wise. If Wal-Mart pulls out and tells DC to go fuck themselves, well, that won’t be so good for anyone concerned, but it will be the DC voters living in the areas that would have benefitted from getting those Wal-Marts who will lose out the most.

I pretty much disagree with all of the Pro points in the OP, but rather than write about each one I’ll just pick a few to give a brief comment on:

3. Walmart needs DC (and other urban areas for expansion) more than DC needs Walmart.

No, DC needs Wal-Mart MUCH more than Wal-Mart needs DC. DC would be an additional profit point for Wal-Mart, but if they don’t get those stores it’s not going to hurt them very much if at all. DC, however, needs those stores for a variety of reasons, including the injection of capital into the areas those stores would be going into, as well as the jobs and the services themselves.

5. People have a basic right to earn a living wage that allows them to live independently, and with dignity.

No, they don’t have such a right. Nor should they, IMHO. They have the CHOICE to sell their labor for the best possible price, but if their labor is worth next to nothing they shouldn’t get more for it than it’s worth just because they or you feel it’s a right.

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.

I obviously think it’s a bad idea. If you want to help the poor, do it on the social safety net side, not screwing with wages. I believe that even if this works it will have a marginal effect on helping the poor, and will be mitigated by Wal-Mart potentially increasing prices which will affect more people than you’ll help by getting them a few bucks more an hour. Of course, as I said earlier, it all depends on how it plays out. If Wal-Mart REALLY wants these stores and is willing to take the short term AND long term hit to get them, then this might all play out well for the Mayor et al…they will get the stores, the jobs AND the political capital for having squeezed Big Business™ and forced them to pay more to the poor. If it plays out that way then it will be a wise move I suppose.

[madmonk28]

@Diceman

I would argue that DC needs Walmart much more than Walmart needs DC. DC is too small to be able to play this sort of hardball game. Walmart can set up some stores just over the border in Maryland & Virginia, and the people of DC will happily commute to them to save money…"

DC is one of the hottest real eastate markets in the country and isn’t showing signs of slowing down. The city was also one of the only metropolitan areas to add jobs during the recent recession and is seen by investors as a safe place to park money. http://www.washingtonpost.com/local/gentrification-in-overdrive-on-14th-street/2013/07/21/d07d344e-ea5b-11e2-a301-ea5a8116d211_story.html

Granted, that story is about 14th street corridor, but as Caffeine Addict points out, there was a time when plenty of now hip neighborhoods were seen as wastelands. I remember when my friend bought a house at Logan Circle more than 20 years ago and we thought he was nuts.

[even_sven]

@BrainGlutton

Why is it limited to big-box stores?

Because DC has something they want-- access to one of the richest, best educated and fasted growing cities the US. There are few cities right now with a better economy. Why shouldn’t they play hardball and get the best deal possible?

Another answer is that big box stores are…big. They make a large an lasting economic impact and set the tone for a neighborhood in the way that the local bakery doesn’t.

[Ravenman]

There’s another issue here: I think a good part of DC’s development over the last 15 years is based on the government adopting a much more pro-business attitude and laws. DC has been successful in luring businesses in because we offer them things, the government is less corrupt than it used to be, and there’s been an acceptance that DC shouldn’t be a one-industry town with government providing employment to everyone. (Sure, lots of people here can be related to the government, but where are we going to buy stuff?)

I think the DC Council negotiating and approving the deal for Walmart to come in, knowing full well that wages and benefits were a significant issue; and then trying to change the rules after the Council thinks that Walmart has no choice, is acting in poor faith. In fact, I think its an act of perfidy that other businesses might consider before locating here.

[Martin_Hyde]

I think it’s unwise to mandate pricing of goods and services. I actually think it is much preferable to recognize that in a free labor market some people reap outsize rewards and some do poorly. You can correct for that with minimum income levels and negative taxes given as subsidies to people under those thresholds, this keeps people from being destitute and also creates work incentives–because you wouldn’t get the negative income tax if you didn’t work at all. [We’d still have programs like unemployment and disability benefits for temporary / long term out of work persons.]

I’m fine with zoning and other laws that mandate business behavior to certain ends. For example prohibitions aimed at Pay Day Loan businesses or gambling parlors that are highly associated with economically distressed areas and which are mostly leeches on the residents of those communities. But such regulation to be wise needs to push some valid community interest. I can see that with rules against Pay Day Loan shops and strip clubs, less so when you’re just talking about a big box retailer. Most of the arguments that Wal-Mart “hurts” the communities it operates in are specious and based on anecdote or data manipulation.

[XT]

@Ravenman

There’s another issue here: I think a good part of DC’s development over the last 15 years is based on the government adopting a much more pro-business attitude and laws. DC has been successful in luring businesses in because we offer them things, the government is less corrupt than it used to be, and there’s been an acceptance that DC shouldn’t be a one-industry town with government providing employment to everyone. (Sure, lots of people here can be related to the government, but where are we going to buy stuff?)

I think the DC Council negotiating and approving the deal for Walmart to come in, knowing full well that wages and benefits were a significant issue; and then trying to change the rules after the Council thinks that Walmart has no choice, is acting in poor faith. In fact, I think its an act of perfidy that other businesses might consider before locating here.

Totally agree…it’s going to make other businesses who were considering expanding into this market a bit wary of making the investment. Which is bad for the folks living there, especially in the poorer parts of DC that would benefit the most from the injection of new capital and jobs.

[Martin_Hyde]

The people who believe Wal-Mart is in desperate need of DC or even highly urbanized areas in general don’t understand business or how to read a 10-K.

Wal-Mart has had relatively stable earnings growth for a long time, with minor ups and downs here and there. Wal-Mart could stop opening new stores right now and remain profitable, it is a going concern. Expansion is not always necessary, expansion increases the size of your market, but the converse is not true. You can limit the markets you are in as long as you do not lose market share there is really nothing wrong with that. Many great businesses over the years intentionally draw the line on further expanding their market.

Look at companies like Dunkin Donuts and its geographic distribution, or companies like Kroger or Publix. Part of Wal-Mart’s current share price is based on its continued growth prospects, but Wal-Mart hasn’t been a “growth” stock in ages. So they aren’t slaves to growth. Plus, something like half the voting stock is held by the Waltons (who have a tacit agreement to always vote the same way.) This means Wal-Mart avoids problems that some other publicly traded companies have with being overly concerned with share price to the detriment of other things. If the Waltons keep making like $400m/year in dividend payments (I believe that is roughly the per-Walton earnings per year), and the balance sheet and income statements are healthy enough to support that they have little reason to be concerned with share price fluctuations.

But the reality is Wal-Mart will keep growing, but because they are actually fine with reduced growth there actually isn’t intrinsically any reason they should accept poor opportunities just for the sake of growth. Wal-Mart is getting big on its push into Mexico and other countries. It’s entirely possible places like D.C. could be a less attractive place to invest capital based on the scenario.

[steronz]

@Martin_Hyde

I think it’s unwise to mandate pricing of goods and services. I actually think it is much preferable to recognize that in a free labor market some people reap outsize rewards and some do poorly. You can correct for that with minimum income levels and negative taxes given as subsidies to people under those thresholds, this keeps people from being destitute and also creates work incentives–because you wouldn’t get the negative income tax if you didn’t work at all. [We’d still have programs like unemployment and disability benefits for temporary / long term out of work persons.]

I’m fine with zoning and other laws that mandate business behavior to certain ends. For example prohibitions aimed at Pay Day Loan businesses or gambling parlors that are highly associated with economically distressed areas and which are mostly leeches on the residents of those communities. But such regulation to be wise needs to push some valid community interest. I can see that with rules against Pay Day Loan shops and strip clubs, less so when you’re just talking about a big box retailer. Most of the arguments that Wal-Mart “hurts” the communities it operates in are specious and based on anecdote or data manipulation.

While I can agree with all of this on an ideological level, I find Wal-Marts to be depressing, and as a former DC resident, I’d have no problem voting to keep them in the suburbs, ideology be damned. The fact that they’re objecting to paying twelve dollars and fifty fucking cents an hour in an expensive metropolitan area just makes me hate them. Do they have any idea what giant assholes this makes them look like? This just seems like a horrible PR move in every way. They should come out saying that they’re going to pay $13 an hour and be done with it. That might motivate me to actually start shopping there again.