Paul Jacob

Hmmm? I thought the idea was for unions to negotiate for higher wages, not lobby for lower.

If minimum wage or living wage or government-controlled wage laws made any sense — which they don’t — it still wouldn’t make sense to erect a double standard, where some companies are forced to pay significantly higher labor costs than their competitors.

The politicians carrying water for the unions claim that their living wage bill will help Walmart employees with better pay. But the folly in the logic behind minimum wage laws is clear. If wages could effectively be set by government command, why not make all wage earners millionaires?

The other argument seems to be that forcing Walmart to pay more for labor will assist small retailers in competing against Walmart. Sort of like kneecapping one runner before the start of a race to “make it fair.”

The irony of the situation goes much deeper, though.

D.C.’s Mayor Vincent Gray had preciously gone to considerable lengths to woo Walmart, pleading with the company to open stores in Washington, D.C., including in some of the poorer, rougher, under-served communities. Walmart agreed, and developed plans to build six stores as anchors to the development of six new major retail centers in the city. Three of the six projects have already broken ground.

On the one hand, the Washington city council was threatening to punish Walmart, forcing it to pay more than its competitors for labor. On the other, the city has already spent $68 million in direct subsidies or other costs related to advancing the six Walmart projects.

Seems the politicians’ fingers are in the pie no matter how it is sliced.

It all came to a head last week, when Walmart announced it would not build the remaining three stores if the discriminatory wage ordinance were enacted. The council proceeded undeterred, voting 8 to 5 to pass the ordinance, which now goes to Mayor Gray, who is likely to veto it.

If the mayor lets the legislation take effect, the revenue from three major development projects and thousands of jobs will be flushed down the drain. Further, citizens in several poor areas of the city will not be able to purchase cheaper goods. They’ll be the ones paying for the council’s supposedly pro-poor and pro-worker, but really merely pro-union politics.

The council seems oblivious to the impact. “We’re at a point where we don’t need retailers,” At-Large Councilman Vincent Orange explained. “Retailers need us.”

Really? To what “we” does Politician Orange refer? The young people trying to get into the workforce with a first job? Or the politicians on council? The parents struggling to put food on their tables? Or the council?

There is, of course, a co-dependent relationship between the retailer and the customer. But neither needs politicians playing economic dictators — a reality even more blatantly obvious in Washington, D.C., where one needs a scorecard to keep track of all the criminal charges and ethics sanctions consistently earned by city politicians.

The Washington Post report on the council passing the Walmart-killing “living wage” shared space on the front page with a story about the DC ethics board fining former crack-smoking mayor, now councilman ad nauseam Marion Barry more than $13,000 for accepting nearly $7,000 in personal gifts from companies doing business with the city. These days, Barry’s antics — for instance, the big government booster failed to pay his own taxes and owes the IRS $277,000 — hardly stand out in the large crowd of scofflaws.

The Board of Ethics and Government Accountability also issued “a notice of violation” last week against former council member Michael Brown who recently pled guilty to federal bribery charges. In addition to Michael Brown, former Council Chairman Kwame Brown, no relation, who gained fame for having the city buy him several new and expensive SUVs, resigned last year after being charged with bank fraud, and former Councilman Harry Thomas also resigned in 2012 as part of a plea agreement with federal prosecutors after he was charged with embezzling more than $300,000.

As for those still “governing,” back in May, Councilman Orange was admonished by the ethics board for improperly intervening with the health department on behalf of a campaign donor’s business. In February, the board determined that Councilman Jim Graham intervened in a 2008 city contract dispute in violation of the city’s code of conduct.

These are not paragons of virtue and their attacks on the freedom to enter the marketplace, and on equal protection, hurt the poor more than they hurt Walmart.

In fact, after passage, Victor Hoskins, the city’s deputy mayor for planning and economic development, warned that the legislation would have a “chilling effect” on retailers across the board — not just Walmart or Costco.

“What they’re doing is,” Hoskins told reporters, “they’re killing the golden goose.”

It’s what politicians do best.     [further reading]


Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.