A City Council in Need of Serious Counseling

Paul Jacob

7/14/2013 12:00:34 AM - Paul Jacob

Growing from a single Arkansas discount store in 1962 to the world’s biggest retailer and largest private employer, Wal-Mart Stores, Inc., today provides jobs for two million people.

In our modern world, that’s enough to make the Bentonville, Arkansas, company big labor’s “Public Enemy Number One,” with union-backed politicians (read: Democrats) organizing something of a dragnet to bring down the retailer.

Sure, we get it, they don’t like the non-union jobs at Walmart . . . or the pay or the benefit packages. But no one is forced to take those jobs. The folks who do go to work at Walmart have freely chosen that opportunity to earn a living over their other (presumably less-lucrative) offers.

And then, after going to work, they haven’t collectively chosen to unionize, either. Perhaps many Walmart employees would like higher-paying union jobs. But they haven’t apparently been offered any, and may understand that, if Walmart were forced to pay more for labor, their job offers may vanish. They may understand a truth other folks have trouble with: “you can’t do just one thing” — requiring that higher wages be paid doesn’t mean that the same number of jobs will be offered. Cause and effect don’t stop with politicians’ intent.

Walmart employees have, instead, teamed with a company so adept at its mission to “sell for less” that studies show shopping there saves the average American more than $2,300 a year and provides a greater financial benefit to the poor than does the federal government’s growing food stamp program.

Once upon a time, even a Democrat from Massachusetts understood, reminding his fellow liberals: “You cannot love employment and hate employers.” Let us hope the common sense of the late U.S. Senator Paul Tsongas has not been “interred with [his] bones.”

But hope oft wilts when in Washington.

This past week, the august District of Columbia City Council took center stage to strike at Walmart. The council has been considering an ordinance to hike the minimum wage way, way up to a so-called “living wage.”

But not for everyone — apparently, some minimum wage employees will continue to have to die for their job.

The legislation increases the minimum wage by over 50 percent, from the current $8.25 an hour to $12.50, but it does so only for people working at non-unionized big box stores with annual sales greater than a billion dollars — in other words, just Walmart and Costco. Unionized grocery stores like Giant and Safeway are specifically exempted from the law.

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]