Walmart gave Washington, D.C., an ultimatum: Leave wage requirements low or we won’t come there.
The company said it wouldn’t build three stores and may ditch three more already under construction there if the D.C. Council passed a bill requiring that large retailers pay no less than $12.50 an hour, instead of Washington’s minimum wage of $8.25. The law “would result in fewer jobs, higher prices and fewer total retail options,” Walmart regional general manager Alex Barron wrote in The Washington Post.
The bill passed on July 10, and the threat changed nobody’s mind on the council, the Post says. The mayor has yet to sign or veto it, but the deadline to decide is here: The mayor has 10 calendar days excluding weekends to consider bills, the city website says.
Fast Company asked experts to assess Barron’s argument, and they refuted his key points.
Fewer jobs? Nope. A 2011 Center for Economic Policy Research study found that when San Francisco, Santa Fe, N.M., and Washington, D.C., raised their minimum wage, employment was unaffected. Higher wages offset high turnover and reduce hiring costs, National Employment Law Project policy analyst Jack Temple told Fast Company. The strategy works for Costco.
Higher prices? Negligible. Another 2011 study, this time from the Berkeley Center for Labor Research and Education, tested almost exactly this scenario — an across-the-board minimum wage increase to $12 an hour, rather than D.C.’s proposed $12.50, Fast Company says. The result was a 46-cent increase per shopping trip per customer, while workers would see an extra $1,670 to $6,500 per year.
Actually, a wage increase would probably save taxpayers money. A more recent report from U.S. House Democrats found that Walmart’s low pay qualifies some workers for government services for the poor, Fast Company says. For example, one Walmart store cost Wisconsin taxpayers more than $900,000 a year for Medicaid.
Fewer retail options? As council member Vincent Orange told the Post, “We’re at a point where we don’t need retailers. Retailers need us.”
What do you think? Can Walmart afford to pay a higher minimum wage for workers at a few D.C. stores? Is it going to abandon its investment in the area over the extra pay? Share your thoughts on our Facebook page.