Veto Decision Looms for DC Retail Living Wage Bill

Veto Decision Looms for DC Retail Living Wage Bill

Veto Decision Looms for DC Retail Living Wage Bill

The bill, requiring hourly compensation of $12.50, is a high-profile challenge to Walmart’s business model.


Washington, DC, Mayor Vincent Gray arrives for a news conference on Capitol Hill in Washington, Tuesday, January 4, 2011. (AP Photo/Charles Dharapak)

Four weeks after the Washington, DC, City Council passed a bill to hike some retail workers’ wages, DC Mayor Vince Gray has not yet indicated whether he will let it become law. The measure, the Large Retailer Accountability Act, has drawn fierce opposition from Walmart, whose urban expansion ambitions have recently been dealt setbacks by labor groups and allied critics. With the bill so far one vote short of a veto-proof majority, an apparently likely mayoral veto could spell defeat for a high-profile challenge to the retail giant’s business model.

A member of Gray’s communications team noted Monday that the council had not yet formally transmitted the bill to the mayor, and told The Nation, “He’ll evaluate it when it comes to his office.” “I think the mayor right now is the absolute wild card,” said Reverend Graylan Hagler, a minister and former union chaplain who’s a leader in the labor-community group Respect DC. “There’s no telling what he’s gonna do.”

But LRAA supporters like Hagler have reason to be concerned—and to hunt for a potential convert on the council. In an interview last month, Deputy Mayor Victor Hoskins appeared to make the case for a veto, telling the Washington Business Journal that the council’s 8-5 vote had already had “a chilling effect” on the city’s efforts to attract retailers, and saying, “People have no idea how damaging this is.” The Washington Post wrote in an editorial Monday that Council Chairman Phil Mendelson “denied he was purposely holding the bill in hopes of getting the votes to sustain a veto…and said council members on both sides of the issue don’t want the issue to come to a head during the summer recess, when members are away.”

The LRAA would require “large retailers”—defined by the square footage of their stores and the revenue of their parent companies—to pay employees at least $12.50 per hour in combined wages and benefits. In a Washington Post op-ed published the day before the council vote, Walmart Regional General Manager Alex Barron warned that the law “would clearly inject unforeseen costs into the equation that would create an uneven playing field and challenge the fiscal health of our planned D.C. stores.” Barron wrote that, while the company had so far refrained from “idle threats,” passing the LRAA would lead Walmart to cancel three planned DC stores, and “jeopardize” the three currently under construction. (In an e-mail to The Nation, Walmart clarified that these consequences would ensue only if the bill actually became law.) Since then, company officials have argued for a veto in venues ranging from national media to a letter to the editor of the Georgetown student paper.

Columbia public affairs professor Dorian Warren contested what he called Walmart’s “martyrdom” claims, noting that other major retailers like Macy’s and Target could also fall within the bill’s scope. But Warren added that even if the bill had targeted Walmart, “it would make strategic sense,” because “they are the global industry leader, and they set standards for the industry.”

In an e-mail to The Nation, Walmart Senior Director of Communications Steven Restivo noted a recent city report showing weakened DC job growth, and asked, “Why would some Council members continue to pursue legislation that discourages investment in our nation’s capitol [sic] by some of the country’s largest retailers?” As evidence that Walmart was unfairly being picked on, Restivo noted that a Respect DC official had told the Los Angeles Times that wages at the unionized supermarket Giant were not much higher than the current DC minimum wage of $8.25. (Like many living wage ordinances, the LRAA includes an option for union members to grant their employer an exemption as part of a union contract, offering a potential bargaining chip in negotiations.)

Hagler, the senior minister of DC’s Plymouth Congregational United Church of Christ, called Restivo’s comparison “bogus,” arguing that total compensation at unionized supermarkets—including health insurance and retirement benefits—would top $12.50. He charged that Walmart’s resistance to paying that rate clashed with a promise an official made over a year ago in a meeting with clergy, whose support the company had sought for its effort to build its first DC stores. According to Hagler, “When we asked them the question, ‘Where are you going to start people?’ they said, ‘Thirteen an hour.’ ”

Asked about that claim, Restivo said he wasn’t at the meeting, “but my guess is that the Walmart representative was sharing our average, hourly full-time wage figures.” Noting prior such claims by Walmart (“I think a lot of people were struggling with the difference between starting and average,” Restivo told Washington City Paper), Hagler retorted that “just because I’m Black” didn’t mean he couldn’t “understand the difference between ‘average’ and ‘starting.’ ”

Walmart pegs its average wage—including managers and excluding its part-time workforce—at $12.78 per hour. Competing estimates frequently cited by labor activists—one based on 2011 IBISworld data, another from—peg it at $8.81 or $8.84. Asked what starting wages for DC Walmart workers would be, Restivo said, “Absent LRAA, our plan would be to provide a competitive wage in DC (just like we do in every other market where we do business).” At Walmart’s June shareholder meeting, the company announced plans to spend $15 billion repurchasing its own stock.

Last month the local blog New Columbia Heights reported the distribution of anti-LRAA flyers warning that the bill “will result in fewer jobs, higher prices and a smaller number of total retail options,” and suggesting “minimum wage reform” as an alternative. Those flyers did not identify the organization behind them, but offered a web address for automated e-mails to Gray apparently hosted by the Walmart-backed group Don’t Block DC Progress. Restivo did not directly address inquiries from The Nation regarding its relationship to the flyers, its stance on a federal minimum wage increase or whether the company would support a congressional override of the LRAA if it were signed.

Activists and some economists have challenged the claim that more Walmart stores mean more and better jobs. A 2007 study in the peer-reviewed Journal of Urban Economics found that “a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers,” and that “store openings lead to declines in county-level retail earnings of about $1.4 million, or 1.5 percent.”

Asked about the bill’s mandate applying only to “large retailers”, Hagler said that while he would have preferred a broader living wage bill, “some negotiation and compromise” were necessary to win majority support on the council; he predicted that the law if signed would drive up industry standards as employers competed for employees. He added that it’s reasonable to expect that “those who have more should pay more.”

The LRAA showdown illustrates how, as collective bargaining has declined and traditional tactics have been hamstrung, labor groups have increasingly turned to politics as a lever, either to mandate improved working conditions or to increase pressure on corporations to come to the table with employees. Interviewed while on strike protesting in Walmart’s Arkansas hometown in June, employee Tsehai Almaz—a leader in the union-backed group OUR Walmart—predicted that transforming the company’s business model would require “a bit of everything. It’s going to be employees, it’s going to be community, it’s going to be government response and interaction,” together “speaking to Walmart, saying you can’t move like you thought you could anymore.”

The current conflict in the nation’s capital echoes a 2006 showdown in Chicago, when a big-box living wage bill passed the city council but was vetoed by then-Mayor Richard Daley. That veto—one of few high-profile breaks with the council during Daley’s two decades in office—reflects a common dynamic in local politics: mayors are often more favorable to the interests of local industry than are the median members of their city legislature.

But Professor Warren, co-author of the forthcoming book Boxing Out: Race, Walmart, and the Politics of Labor Market Regulation from Below, argued that the LRAA’s passage in DC is evidence that industry’s hand has weakened in such fights. Unlike an economic era dominated by manufacturing companies that could credibly threaten to punish unfriendly policies by moving factories, Warren told The Nation, “We’re at a different historical moment now, where in the case of Walmart, they actually need the city more than the city needs them.” Warren called local and state-level living wage laws like the LRAA “the most successful ways that government has raised labor market standards over the last fifteen years.”

In contrast, Restivo downplayed the national implications of the LRAA fight, noting that seven years after “this same exact debate” in Chicago, “today, we have nine stores there and employ about 2,000 people.” Asked about the DC bill while campaigning last month, New York City mayoral candidates Bill de Blasio and John Liu both said they were not sufficiently familiar with it to say what Mayor Gray should do, but reiterated their opposition to Walmart expansion in New York City given the company’s current business model (other Democratic NYC mayoral campaigns did not respond to Monday inquiries).

LRAA supporters say their canvasses have helped round up around 20,000 constituents who’ve so far contacted Mayor Gray to urge him to sign the bill. Reverend Hagler said he hopes the LRAA inspires other cities to “look at demanding more for their residents and their citizens,” rather than being intimidated by Walmart. Calling Mayor Gray “a friend,” and noting that he and other progressive clergy have backed Gray’s efforts for DC statehood, Hagler said, “For him to roll over to this kind of economic blackmail would be slap in the face for all of us who stood with him in that quest for self-determination and respect.”

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