The D.C. City Council counts former Mayor and convicted cocaine aficionado Marion Barry as one of its members. That august body is now moving to force the nation’s largest retailer to kowtow to its ultra-liberal, anti-business philosophy. The Council is pushing Wal-Mart to pay employees an uneconomic “living wage” as the price of doing business in the nation’s capital.
Like President Richard Nixon’s failed wage-and-price controls in the 1970s, this latest “living wage” plan will achieve neither its desired economic result nor the social policy windfall its proponents envision. Still, Council members whose understanding of economics is as shallow as the Reflecting Pool at the Lincoln Memorial’s feet press on.
The “Large Retailer Accountability Act” (LRAA) was approved by the D.C. City Council a few weeks ago. While it does not mention retail giant Wal-Mart by name, the company is the obvious target. According to the bill, retailers with at least $1 billion gross annual sales, and retail stores of more than 75,000 square feet, must pay employees a “living” hourly wage of $12.50 – more than 50 percent above the District’s current mandatory minimum wage of $8.25 per hour. The bill exempts existing stores more than four years old, as well as unionized retailers – exemptions that afford little cover for Wal-Mart, which is non-union and has just begun construction on three of six new stores in the D.C. area.
The bill’s high-sounding language calls the living wage requirement “a code of conduct for responsible retailers,” made necessary because “without safeguards, large retailers threaten to erode both [sic] living standards for working families in the District.” In reality, the measure is nothing more than yet another example of how local governments everywhere are moving increasingly to extort anti-market concessions from large companies as a way to raise revenue.
To its credit, Wal-Mart is refusing to play the City Council’s game; vowing to cancel all future plans for stores in the area should the measure go into effect. The huge retailer also said it might terminate the opening of the three stores currently under construction.
Wal-Mart must feel a little like the victim of a bait-and-switch scheme; after already having been suckered by the D.C. government and local "activists" into "donating" millions to local "causes," and paying large sums to local lobbyists.