Wal-Mart and Washington, DC, in wage showdown

The giant retailer threatens to pull out of the city if it's required to pay a 'living wage' as mandated by a pending law.

By Jonathan Berr Jul 10, 2013 11:43AM
Wal-Mart website (© M4OS Photos/Alamy)Wal-Mart (WMT), the world's largest retailer, is threatening to cancel plans to open six stores in Washington, D.C., if city officials enact a law mandating that some employers pay their workers a "living wage" of $12.50 an hour. That's well above the federal minimum wage of $7.25, but the city's push is understandable.

Many studies have shown that a disproportionate number of people receiving government assistance happen to work for Wal-Mart. As PolitiFact noted in 2012, that point has been proved repeatedly over the years in multiple states. Basically, it shows the high price that society otherwise pays for Wal-Mart's low prices.

City officials in Washington have proposed the Large Retail Accountability Act (LRAA), which would mandate that any retail outlet whose parent company has yearly revenue of $1 billion or more pay a higher wage. According to the Washington Post, the city eliminated a requirement that only stores with locations of more than 75,000 square feet would need to pay the higher wage so that the law wouldn't apply just to Wal-Mart.
 
Nonetheless, Alex Baron, a Wal-Mart general manager, argued in an op-ed published in the Post that the law is "arbitrary and discriminatory and that it discourages investment in Washington." If the City Council approves the LRAA, Wal-Mart says it will shelve plans to build three stores where construction has not started and that the law would "jeopardize" the three stores it's currently building.

City officials are taking Wal-Mart's threat seriously. Mayor Vincent Gray is threatening to veto the bill, passed by the City Council on an initial vote last month, the newspaper says. Some activists oppose the LRAA as well. A final vote is expected Wednesday.
 
This isn't a new issue. Chicago Mayor Richard M.  Daley vetoed a similar bill that was passed a few years ago. The issue has also come up in New York City and probably will do so again in other cities. Of course, unions have used the issue as they've tried to organize Wal-Mart workers for years.

Wal-Mart, though, can't just hope the wage issue will blow over. Wall Street has been pressuring it to boost its U.S. sales, which have been lackluster for a while. Analysts are forecasting that sales will rise less than 1% for the next two quarters. Wal-Mart needs to expand into urban markets to perform better, but that's where it will need to pay higher wages.

Something has to give.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

More on moneyNOW

268Comments
Jul 10, 2013 1:21PM
avatar
OK!  Wal-Mart does not pay a living wage that an employee can support or help support a family on, and they provide inferior to no benefits to there employees, and most of their products are made in china and they encourage the vendors that have merchandise in wal-mart stores to have there merchandise manufactured in china as well, and then they make a fortune off of the American people and then we have to subsidize the employees with welfare, EXCUSE ME HAVE I GOT THIS RIGHT?  are we subsidizing Wal-Mart in order for them to screw us in more ways than one?  Have I got that right or am I just imagining things here?
Jul 10, 2013 1:19PM
avatar

Ok, I will dive in this conversation. Can we all agree that people deserve to be paid enough to take care of themselves? If that was the case, we would not need most of the Federal Assistance programs. Now, if a company is irresponsible and does not pay their employees enough to cover the basics of life, those employees have to find help somewhere. If they use any Fed program, it is the taxpayers taking the responsibility of the company supplementing those employees income, while the company banks the profits.

In the case of Wal-Mart, the six top people in the Wal-Mart organization claimed a yearly salary of 18 Billion(yes it was Billion) each. Now I have to say that those people can live on 10 Billion just as easily, using the 46 Billion(6 Billion from each)to compensate each employee with a "livable wage" and health care. It is a shame that the officers of the Wal-Mart corporation have no integrity or conscience. 

Jul 10, 2013 1:05PM
avatar
Personally if I were DC I would say, please don't open up any more of your stores with its unhealthy food, cheap poorly made products and under paid workers.  The tax payers are tired of making your payroll so you can undercut the prices of other retailers who are interested in capitalism succeeding for everyone.  I wouldn't shop at a Walmart if it were the last store on the planet.
Jul 10, 2013 12:06PM
avatar

"City officials are taking Wal-Mart's threat seriously."

 

That's too bad.  I don't know of a place where a Walmart has had long-term, positive changes.

Jul 10, 2013 1:07PM
avatar

Can you live on less than $12 an hr.?  I bet most people that bash wages going up could not live on what they say people should make.

avatar
China is doing great, heck they are buying up our country. So can someone tell me why we still don't charge them import tariffs? Walmart has products from China, why not tariff these things before they even get to Walmart's shelves?
Jul 10, 2013 1:15PM
avatar

I'm on both sides of this fence... I don't think the government should be putting barriers in place to businesses opening at a time where unemployment is still high.

 

But I also not only hate Walmart because they never bring "success" to an area, but they actually have, from what I've seen, brought the opposite... They open a store and then the local business people can't compete and shut down.  The people who wanted to save a few cents on that bottle of shampoo they used to get from the local drug store, or a save a couple of dollars on the plants they used to get from the local nursery or flower shop, or save twenty bucks on the tires for their car they used to get from the local garage, now lose their jobs because they used to be employed at those said business.  So then the problem is compounded.  The local business and local jobs are gone, so people now don't even have enough money to shop at Walmart.  So Walmart closes and leaves an empty building in a community that is too big for anyone else to rent, and moves their path of destruction on to the next town.

 

Plus they continually pressure manufacturers to cut costs so they can pass on the "savings" to the consumer through roll-back pricing.  Sounds good until the manufacturer, who is now down to just one customer - Walmart, because they drove all the local business out of business - has to cut costs through either labor (move manufacturing overseas... more jobs lost) or through materials (cheaper stuff that breaks faster) or both.

 

Now on the other side of the fence, I don't see how Walmart, or anyone, expects someone to live on minimum wage in an area with the cost of living that D.C. has.  People are desperate, but the current minimum wage is only about $15,000 a year.  I live in the metropolotan D.C. area and I know people that struggle on more than three times that amount.  It's a very expensive area... so if you find people willing to take the work at that wage, what quality of employee are you hiring which your customer will have to deal with?

Jul 10, 2013 1:06PM
avatar
I have a long list of reasons why I won't shop at Walmart, this adds one more to it.  The funny thing is that the tax payers are subsidizing the owners/share holders/executives in the form of food stamps to their drastically underpaid workers.  Wake up see these diks for what they are.
Jul 10, 2013 1:03PM
avatar
I don't think that it is fare citizens subsidize Wal-Mart for it's presence in their community.  Wal-Mart is a corrupt, immoral business enterprize, that needs to be held accountable.  If these councilman dear Wal-Mart will leave, expand this requirement across the nation and maybe Wal-Mart will go away.
Jul 10, 2013 1:35PM
avatar
Walmart - can't afford to pay their workers a decent wage, can't pay Americans to make any of the products they sell, but they can pay enough money to 4 owners to put them among the 10 richest people in America.
Jul 10, 2013 1:13PM
avatar
Shouldn't just be Wal-Mart. Every employer in DC should pay at least 12.50/hr.  Wages haven't kept up in this country and thanks to the pervasive high unemployment businesses don't have to raise wages to keep employees. The gulf between management and the workers incomes is increasing and is driving the growth of this country into the dust. This, coupled with asinine regulation, is making us a country of poor folks just struggling to survive and not flourish
Jul 10, 2013 1:10PM
avatar
I live in Ontario, we went from $6.25 to 10.25 in less then a decade.  There has been no measurable inflation caused by it.  That entire argument is simply untrue as I have witnessed it with my own eyes.  It has had some negative consequences, however inflation was not one of them.
Jul 10, 2013 1:44PM
avatar

Wal-Mart  screws there employees. You wouldn't see me shopping or working there.

stop shopping at Wal-Mart simply math.

Jul 10, 2013 1:01PM
avatar
Whats the point of having a comment section if the site is going to delete 99% of comments posted.  This section had almost 100 comments and now it has been deleted down to 7.
Jul 10, 2013 2:25PM
avatar
So it's all about cheap labor......remember NAFTA?......did you hear that sucking sound Ross Perot talked about?    I did.   Our factory went to Mexico,....but that's ok, we had only been in business for 69 years.  Proud to be American,.....or Mexican,.....or Chinese, ......or........
Jul 10, 2013 2:50PM
avatar
Wal-Mart against Washington DC..........  Is there some way this fight can take them both out?
Jul 10, 2013 2:03PM
avatar

If Govt. is so smart why not fix the economy and provide incentives to business to grow rather than shrink.

Jul 10, 2013 1:41PM
avatar

Most of the people that would be working at these stores in D.C. are probably already unemployed and on several forms of government assistance. why not get them working and help wean them off the welfare system. I was unemployed and on assistance when I started working there and now am completely independent. A "welfare to wok" program might be in order.

avatar

Pretty much we are approaching this whole thing wrong.

 

Take all the income in the country (should be $16 trillion our GDP) divide by the 110,000,000 workers

 

so the average person should be making $145,454 a year or with a 2,000 hour work year about $73 an hour should be the minimal and maximum wage.

 

Problem solved folks people will have enough money to live on and pay taxes to support the government.

 

Who needs super rich people anyway?? They are just a drag on the real economy.

Jul 10, 2013 1:18PM
avatar

Chase out Walmart. Just be prepared to hear about the lose of jobs, municipal budget crunch due to lost tax revenue, and you better increase the welfare and food stamp amounts to cover the cost difference between shopping at Walmart and the local mom and pop store.

 

Let's face it people if stocking shelves at the local Walmart is your only career choice, you need to realize that your life choices have not exactly been stellar. Housing, cars, cell phones, internet access, and enough food to make you morbidly obese are not what the authors of the Declaration of Independence envisioned as unalienable rights.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The major averages began the session not far below their flat lines as five sectors displayed early gains, while five opened lower.

On the upside, consumer discretionary (+0.2%), energy (+0.5%), and utilities (+0.7%) have taken the early lead, while technology (-0.6%), health care (-0.3%), and telecom services (-3.1%) lag.

With participants receiving a handful of quarterly reports from the biotech space, the iShares Nasdaq Biotechnology ETF (IBB 233.31, ... More

MSN MONEY'S