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George Michael: The D.C. city council's bait-and-switch

July 19, 2013|By GEORGE MICHAEL

The Washington, D.C., city council voted 8-5 on July 10 to require Walmart to pay a “living wage” of $12.50 per hour for all employees at the six new stores that Walmart is preparing to open in our nation’s capital. Three stores are under construction and three more have been approved.

This living wage is nearly 50 percent higher than the current D.C. minimum wage of $8.25 per hour.  

This move by the council puts Mayor Vincent Gray in a bind. He worked out the deal to get Walmart to take a chance and invest in the city. Now, the council has thrown a big monkey wrench into the process. The only hope to salvage the arrangement is a veto by Gray. It would then take nine votes to override the veto.

This is a classic case of “bait-and-switch.” A deal was agreed upon. A lot of time and effort has been expended. If Walmart did something like this to a customer, especially one of the city council members, there would be a big brouhaha.

The D.C. council has little understanding of free market economics. Walmart has said if the bill stands as is, it will not build the last three stores and will have to make a determination about the three stores under construction. That is one way the free market operates. Who needs the D.C. council, comprised of community organizers for the most part, telling Walmart how to manage a store?

About 1,800 jobs hang in the balance. With teen (ages 16-19) unemployment at 34 percent in the district, you would think getting some jobs for them would be a priority. 

If Walmart cannot get enough workers, it will have to offer more money. That is how the free market works. Wages should be agreed upon by management and workers. No one will be forced to work at Walmart.

Why is the debate only about the employer and wage side of the economic equation?  The other side of the equation is low prices. How many thousands of residents in D.C. will save millions of dollars shopping at Walmart rather than at a union-shop store?

Working at the D.C. minimum wage only translates to an annual salary of $17,000. Hopefully, no one aspires to a minimum-wage job. The minimum wage is for unskilled, entry-level workers, who, if they have some initiative and purpose about them, should be able to move up the economic scale. The wage would apply primarily to bar code scanners and greeters. 

The bill that was approved is called the Large Retailer Accountability Act. Truth in labeling would suggest a more apt name could be the Anti-Walmart Act. It was constructed in such a way that the bill will not apply the new wages to stores where union workers are paid less than this “living wage.” The bill only applies to stores whose company does more than $1 billion of business nationally and is opening a store of more than 75,000 square feet. Stores owned by Giant Foods, Apple and Nike are therefore excluded. I doubt the D.C. council feels that the “equal protection” clause of the Constitution applies here.

In a case of bad timing, Councilman Marion Barry was censured and fined by the city’s ethics board two days after the Walmart vote for accepting money from companies that did business with the city. And the IRS is after Barry for back taxes. His wage is $125,000 a year but it must not be an adequate “living wage.” This is politics as usual in D.C., a sad case of déjà vu.

Walmart is one of the most successful businesses in the world. And the D.C. council wants to tell them how to run their business. How ironic. The D.C. council is pretty inept when it comes to running their own “business” very effectively.

George Michael, who lives in Williamsport, is a former principal of Grace Academy. His email address is gfmichael46@gmail.com.

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