July 11, 2013
Will Walmart Bail on Washington Over the ‘Living Wage’ Bill?
Walmart claims it was blindsided by a living wage law (AKA the Large Retailer Accountability Act) passed by the Washington, D.C. City Council. Had it known, Walmart said, it never would have built the three stores currently near completion. Further, the chain says it will likely not go ahead with three other planned stores in the district.
City leaders say they have no idea what Walmart is going on about since its executives and lobbyists have claimed over the past 10 years that the retailer would pay workers at least as much as the living wage law requires and perhaps more.
"They promised they were going to start people at $13 an hour, and they said that over and over and over," the Rev. Graylan Hagler, senior pastor at Plymouth Congregational Church in Northeast Washington, told The Washington Post.
Earlier this week, Walmart company spokesperson Steven Restivo told the Post the retailer planned to pay workers in its D.C. stores an average of $12.39 an hour. The new law calls for a minimum wage of $12.50.
Walmart argues that the bill is discriminatory because it singles it out while letting most other businesses out of paying the same wages.
The Post’s editorial board agrees with the chain: "The hubris of the Large Retailer Accountability Act is matched by its hypocrisy." The paper pointed out that restaurant workers, union members in grocery stores and even government employees would earn less than what the new law would require of Walmart.
The bill, which was approved by an 8-5 margin, goes to Washington Mayor Vincent Gray. If Mr. Gray chooses to veto the bill, it would require nine members of the council to overturn it. The mayor has not indicated at this point what he intends to do.
- D.C. Council approves ‘living wage’ bill over Wal-Mart ultimatum – The Washington Post (tiered sub.)
- Wal-Mart calls D.C. Council’s ‘living wage’ bill a bait-and-switch tactic – The Washington Post (tiered sub.)
- Wal-Mart says it would abandon plans for 3 DC stores if ‘living wage’ bill is approved – The Associated Press/The Washington Post (tiered sub.)
- Wal-Mart: The D.C. Council has forced our hand – The Washington Post
- How a D.C. wage bill — and the council’s hubris — threaten city development – The Washington Post
BrainTrust
Recent Discussions
Discussion Questions
What is your reaction to what’s going on in Washington, D.C. regarding the Large Retailer Accountability Act? Is Walmart being unfairly singled out? Do you agree or disagree with the notion that retail employees are underpaid? If yes, what is the remedy?
Poll
Walmart is being singled out because Walmart is the only big box retailer willing to open stores here. Don’t count on other big box retailers to take their place. I would not blame Walmart for bailing out and leaving some white elephants. Everyone thinks they are underpaid. Retail workers have access to entitlements such as Food Stamps, Medicaid, and Earned Income Credit that higher income workers are shut out from. We already have an extremely generous minimum wage compared to some of our major trade partners such as China, Mexico, India, nearly all of Africa, Asia, Central and South America. The success of stores with Walmart’ business model depends on low costs workers with high turnover. The remedy is for the government to distance themselves from negotiating wages and let the free market determine the cost.
Of course they are, but that doesn’t mean that retail employees aren’t—in fact—often underpaid.
The District has the right to pass whatever laws it wants—provided they impact everyone in the same way at best and, at worst, don’t target any individual or individual company. It would seem on its face that this ruling is going directly after Walmart.
I’m not sure what the remedy is for retail pay scales, but I am sure the playing field ought to be level.
Welcome to capitalism. I’m sure that relative to what we (the readers of RetailWire) all make, they are woefully underpaid. But if retailers are able to fill jobs at those salaries and the lower labor costs are reflected in lower prices, that’s how the system is supposed to work. The people of D.C. can up the costs and Walmart is going to up the prices—it’s their choice (or they can go over to Maryland or Virginia and shop there, where the prices will be less).
Walmart has the right to build or not build anywhere it chooses (subject to zoning regulations, etc.) as does any retailer. Should it elect not to move forward with the three locations where construction has not begun, the real losers will not Walmart, which can find another three locations somewhere, but the people who lose the chance to work and at least earn some money and the consumers who lose the chance to have access to low-cost goods.
The way the law is constructed means smaller businesses are not subject to the Large Retailer Accountability Act. This certainly seems discriminatory as does the list of exemptions to the Act.
Councilman Orange’s statement that D.C. doesn’t need retailers, but retailers need D.C. is not supported by the years of effort the district put into getting Walmart to open stores there.
Of course retail employees are underpaid. If employees were paid more and trained better, they may be more loyal, productive, and successful. In the long run, the cost should even out with increased sales and more satisfied consumers.
Maybe Walmart is being singled out; I do not know enough of the circumstances to make that determination. However, I do find it difficult to believe that Walmart was blindsided and did not know the law was being considered. If the resulting legislation, whatever it is, is in line with what was discussed when a decision was made to open the stores, it is not a matter of being blindsided. Every locale is free to pass whatever legislation it chooses. Every company is free to locate where it chooses. Maybe this is about whether Walmart wants to open the additional stores and will be seen as not living up to an agreement.
I have to confess, I get really tired of Walmart whining. Especially since the company had higher EPS than expected because of lower corporate tax rates. This was acknowledged in their earnings call. Is the company singled out? When your revenue is 10 times higher than your largest US competitor you are a singularity.
Someone else will come in their place.
It’s a math question. Who puts more money into the re-election campaigns of the the City Council—unions or Walmart? Like everything in Washington, this is about getting re-elected. The fact that the population that this Council serves is denied access to value-priced consumer goods (something they need desperately) is irrelevant.
Of course Walmart (and a limited number of other companies) are being treated differently than others. It’s very bad policy. It’s just one more example of voting to make someone else pay for something. Everyone would like to make more, but let’s be honest—a higher minimum wage pushes up costs, which are paid by consumers that make only slightly more. Eventually those people will get raises, and the gap will in time be right where it is now.
I am not going to second guess the hiring and pay practices of the world’s largest retailer. They are very well aware of what they need to pay in order to get the kind of worker they want. Walmart is being unfairly singled out. The best remedy is for the government to get out of the wage negotiation business.
I really think we should just start all over. Take every parcel of property, every dime in every bank account, every patent, every car, every house, every farm and everything else, seize them all and create a 10 million man commission to distribute all of the wealth of the USA in equal portions to every person who has a record of paying federal income tax for 4 of the last five years.
Since when did municipalities have the ability/right to impose a minimum wage on any business operating in its incorporated area? No one denies these entities the ability to tax to provide for public services, but when were they empowered with the ability to dictate wages? AND if they do assume this power, who gives them the right to penalize employees working for retailers who aren’t large? This is what happens when the inmates start running the asylum.
Employees in every area work on the basis of supply and demand. The fact that many retail duties can be managed by the plentiful poorly educated indicates that the supply of capable workers exceeds the demand for their skills which has the effect of keeping wages low. Retail employees are, in general, paid what their labor is worth as are all others unless they work for the government where pay is determined largely by test and time. Walmart should sue, not for the wage cost, but for the discrimination it faces due to its success.
If retail employees are so underpaid, then why are so many people lined up for jobs at stores ready to open? When was the last time you saw a story about retailers begging people to work in their stores? Retailers pay what it takes to get people to work in their stores. And people are free to take it or leave it.
There is no question that Walmart is being unfairly singled out. The city council certainly wants to embarrass Walmart. In terms of local politics, it also puts the Mayor on the hot seat, where city council members looking for his job can campaign against whatever decision he makes. Walmart has been kept out of a lot of inner cities—where a lot of its target shoppers reside—by a coalition of labor unions and Democratic politicians. Walmart has been the whipping boy for that coalition for years now, and only the poor consumers suffer. The hypocrisy of the coalition is so thick, it tars all of them and the people who support them.
Yes, Walmart is being unfairly singled out and no, this should not be allowed.
As for retail in general being underpaid, I won’t go there. Some retailers like Costco, for example, do right by their employees but they have their own model and it works for them. They want low turnover, they want brand ambassadors and great service. All this comes with a price.
Walmart, on the other hand, is all about low prices and expansive SKUs. To make that work takes a different model with low paid employees, less loyalty and less customer service for the masses.
It’s a surprise that Walmart is focused on profit? It’s a surprise that Walmart said one thing (from one person) but then did something else (probably dictated by another person)? Seems the folks in D.C. need to start reading the news more often.
IMO, Walmart has every right to be profitable. So, if they think they can’t make money by paying people more (questionable, I know), then they shouldn’t pay people more.
But, you know, they certainly could use some good P.R. …if that’s even a thought for them.
So on one side of the equation we have high shrink and low profits. On the other side, the high cost of employee turnover, wage/benefits increases, high security costs and insurance premiums out of control for the foreseeable future. The party is over and it is time to go… that is to say if you are a standalone, profit taking corporation without the ability to raise taxes somewhere else to recover losses. The good news is there are plenty of Walmarts…somewhere!
If people think retail workers are underpaid, then my question is “why?” I don’t see a situation as with manufacturing or farming, where plausible claims can be made that subsidies are giving foreign firms an “unfair” advantage. Are retailers here competing against those in China or Bangladesh?
It’s true that WM benefits from the subsidies given to driving, but that’s a benefit versus other retailers, not workers. There WAS a claim a while back that WM benefited from a public health subsidy, and I guess that could be expanded to David’s trio of other benefits, but I’m not sure in their absence WM employees would receive—or even demand—higher wages…we all know the tan, trim and attractive people who (also) have good organizing skills all work elsewhere.
The should pull out of DC. They will pull out of DC. Good for them!
Of course Walmart is being singled out unfairly. If that were not so, union retailers that fit the same parameters being applied to Walmart would not be exempted from the law. Pure and simple.
A remedy for a retail worker that believes they are underpaid can easily seek to improve themselves by working for another retailer that pays more, or another employer in a different business sector.
Contrary to what the city council’s belief system may be, they hurt themselves, they hurt consumers, and they hurt all of their citizens by the decision. That may actually have been their objective—who knows?
Walmart can achieve world dominance without a location inside the small measure of the district’s limits.
The name of the law illustrates that it treats Walmart unfairly. The irony is that DC Council is creating barriers to its constituency’s employment.
Walmart won’t do anything that allows this issue to become a precedent.
From plastic bag bans, to location-specific (but asymmetrical) wage laws, to idiotic reporting requirements, government needs to just butt out of the consumer market. We consumers expect and rely on our government to monitor for food safety and to assure reasonable workplace safety for employees. That’s their function; it’s an important one, and a big part of why we willingly pay taxes. The rest is just intrusion for the sake of politics and power.
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Walmart is being singled out because Walmart is the only big box retailer willing to open stores here. Don’t count on other big box retailers to take their place. I would not blame Walmart for bailing out and leaving some white elephants. Everyone thinks they are underpaid. Retail workers have access to entitlements such as Food Stamps, Medicaid, and Earned Income Credit that higher income workers are shut out from. We already have an extremely generous minimum wage compared to some of our major trade partners such as China, Mexico, India, nearly all of Africa, Asia, Central and South America. The success of stores with Walmart’ business model depends on low costs workers with high turnover. The remedy is for the government to distance themselves from negotiating wages and let the free market determine the cost.
Of course they are, but that doesn’t mean that retail employees aren’t—in fact—often underpaid.
The District has the right to pass whatever laws it wants—provided they impact everyone in the same way at best and, at worst, don’t target any individual or individual company. It would seem on its face that this ruling is going directly after Walmart.
I’m not sure what the remedy is for retail pay scales, but I am sure the playing field ought to be level.
Welcome to capitalism. I’m sure that relative to what we (the readers of RetailWire) all make, they are woefully underpaid. But if retailers are able to fill jobs at those salaries and the lower labor costs are reflected in lower prices, that’s how the system is supposed to work. The people of D.C. can up the costs and Walmart is going to up the prices—it’s their choice (or they can go over to Maryland or Virginia and shop there, where the prices will be less).
Walmart has the right to build or not build anywhere it chooses (subject to zoning regulations, etc.) as does any retailer. Should it elect not to move forward with the three locations where construction has not begun, the real losers will not Walmart, which can find another three locations somewhere, but the people who lose the chance to work and at least earn some money and the consumers who lose the chance to have access to low-cost goods.
The way the law is constructed means smaller businesses are not subject to the Large Retailer Accountability Act. This certainly seems discriminatory as does the list of exemptions to the Act.
Councilman Orange’s statement that D.C. doesn’t need retailers, but retailers need D.C. is not supported by the years of effort the district put into getting Walmart to open stores there.
Of course retail employees are underpaid. If employees were paid more and trained better, they may be more loyal, productive, and successful. In the long run, the cost should even out with increased sales and more satisfied consumers.
Maybe Walmart is being singled out; I do not know enough of the circumstances to make that determination. However, I do find it difficult to believe that Walmart was blindsided and did not know the law was being considered. If the resulting legislation, whatever it is, is in line with what was discussed when a decision was made to open the stores, it is not a matter of being blindsided. Every locale is free to pass whatever legislation it chooses. Every company is free to locate where it chooses. Maybe this is about whether Walmart wants to open the additional stores and will be seen as not living up to an agreement.
I have to confess, I get really tired of Walmart whining. Especially since the company had higher EPS than expected because of lower corporate tax rates. This was acknowledged in their earnings call. Is the company singled out? When your revenue is 10 times higher than your largest US competitor you are a singularity.
Someone else will come in their place.
It’s a math question. Who puts more money into the re-election campaigns of the the City Council—unions or Walmart? Like everything in Washington, this is about getting re-elected. The fact that the population that this Council serves is denied access to value-priced consumer goods (something they need desperately) is irrelevant.
Of course Walmart (and a limited number of other companies) are being treated differently than others. It’s very bad policy. It’s just one more example of voting to make someone else pay for something. Everyone would like to make more, but let’s be honest—a higher minimum wage pushes up costs, which are paid by consumers that make only slightly more. Eventually those people will get raises, and the gap will in time be right where it is now.
I am not going to second guess the hiring and pay practices of the world’s largest retailer. They are very well aware of what they need to pay in order to get the kind of worker they want. Walmart is being unfairly singled out. The best remedy is for the government to get out of the wage negotiation business.
I really think we should just start all over. Take every parcel of property, every dime in every bank account, every patent, every car, every house, every farm and everything else, seize them all and create a 10 million man commission to distribute all of the wealth of the USA in equal portions to every person who has a record of paying federal income tax for 4 of the last five years.
Since when did municipalities have the ability/right to impose a minimum wage on any business operating in its incorporated area? No one denies these entities the ability to tax to provide for public services, but when were they empowered with the ability to dictate wages? AND if they do assume this power, who gives them the right to penalize employees working for retailers who aren’t large? This is what happens when the inmates start running the asylum.
Employees in every area work on the basis of supply and demand. The fact that many retail duties can be managed by the plentiful poorly educated indicates that the supply of capable workers exceeds the demand for their skills which has the effect of keeping wages low. Retail employees are, in general, paid what their labor is worth as are all others unless they work for the government where pay is determined largely by test and time. Walmart should sue, not for the wage cost, but for the discrimination it faces due to its success.
If retail employees are so underpaid, then why are so many people lined up for jobs at stores ready to open? When was the last time you saw a story about retailers begging people to work in their stores? Retailers pay what it takes to get people to work in their stores. And people are free to take it or leave it.
There is no question that Walmart is being unfairly singled out. The city council certainly wants to embarrass Walmart. In terms of local politics, it also puts the Mayor on the hot seat, where city council members looking for his job can campaign against whatever decision he makes. Walmart has been kept out of a lot of inner cities—where a lot of its target shoppers reside—by a coalition of labor unions and Democratic politicians. Walmart has been the whipping boy for that coalition for years now, and only the poor consumers suffer. The hypocrisy of the coalition is so thick, it tars all of them and the people who support them.
Yes, Walmart is being unfairly singled out and no, this should not be allowed.
As for retail in general being underpaid, I won’t go there. Some retailers like Costco, for example, do right by their employees but they have their own model and it works for them. They want low turnover, they want brand ambassadors and great service. All this comes with a price.
Walmart, on the other hand, is all about low prices and expansive SKUs. To make that work takes a different model with low paid employees, less loyalty and less customer service for the masses.
It’s a surprise that Walmart is focused on profit? It’s a surprise that Walmart said one thing (from one person) but then did something else (probably dictated by another person)? Seems the folks in D.C. need to start reading the news more often.
IMO, Walmart has every right to be profitable. So, if they think they can’t make money by paying people more (questionable, I know), then they shouldn’t pay people more.
But, you know, they certainly could use some good P.R. …if that’s even a thought for them.
So on one side of the equation we have high shrink and low profits. On the other side, the high cost of employee turnover, wage/benefits increases, high security costs and insurance premiums out of control for the foreseeable future. The party is over and it is time to go… that is to say if you are a standalone, profit taking corporation without the ability to raise taxes somewhere else to recover losses. The good news is there are plenty of Walmarts…somewhere!
If people think retail workers are underpaid, then my question is “why?” I don’t see a situation as with manufacturing or farming, where plausible claims can be made that subsidies are giving foreign firms an “unfair” advantage. Are retailers here competing against those in China or Bangladesh?
It’s true that WM benefits from the subsidies given to driving, but that’s a benefit versus other retailers, not workers. There WAS a claim a while back that WM benefited from a public health subsidy, and I guess that could be expanded to David’s trio of other benefits, but I’m not sure in their absence WM employees would receive—or even demand—higher wages…we all know the tan, trim and attractive people who (also) have good organizing skills all work elsewhere.
The should pull out of DC. They will pull out of DC. Good for them!
Of course Walmart is being singled out unfairly. If that were not so, union retailers that fit the same parameters being applied to Walmart would not be exempted from the law. Pure and simple.
A remedy for a retail worker that believes they are underpaid can easily seek to improve themselves by working for another retailer that pays more, or another employer in a different business sector.
Contrary to what the city council’s belief system may be, they hurt themselves, they hurt consumers, and they hurt all of their citizens by the decision. That may actually have been their objective—who knows?
Walmart can achieve world dominance without a location inside the small measure of the district’s limits.
The name of the law illustrates that it treats Walmart unfairly. The irony is that DC Council is creating barriers to its constituency’s employment.
Walmart won’t do anything that allows this issue to become a precedent.
From plastic bag bans, to location-specific (but asymmetrical) wage laws, to idiotic reporting requirements, government needs to just butt out of the consumer market. We consumers expect and rely on our government to monitor for food safety and to assure reasonable workplace safety for employees. That’s their function; it’s an important one, and a big part of why we willingly pay taxes. The rest is just intrusion for the sake of politics and power.