'Living wage' could kill jobs in Washington D.C.

The Washington D.C. Council passed a “living wage bill” on Wednesday, despite protests and threats from retail giant Walmart. “The Large Retailer Accountability Act” will require some large retailers to pay a 50 percent premium on top of the city’s minimum wage, according to The Washington Post. Their workers must now be paid $12.50 an hour, rather than $8.25.

Walmart had warned that passage of the bill could halt its plans to build in the area—citing three new locations specifically, at Skyland, Capitol Gateway, and New York Avenue.

“This legislation is arbitrary and discriminatory and … discourages investment in Washington,” Alex Barron, a regional general manager for Walmart, said in a letter to The Washington Post. “The LRAA would result in fewer jobs, higher prices and fewer total retail options. Most shopping dollars would stay in the suburbs, unemployment would remain in the double digits in some neighborhoods, and underserved communities would continue to have disproportionate access to affordable groceries.”

The bill passed 8-5, the same margin as an earlier vote taken before Walmart’s warnings.

“The question here is a living wage; it’s not whether Walmart comes or stays,” council member Vincent B. Orange (D-At Large) told The Post. “We’re at a point where we don’t need retailers. Retailers need us.”

In response to the bill, Walmart spokesman Steve Restivo said in a statement that the retailer would throw out plans for three unbuilt stores and “review the financial and legal implications” of quitting another three already under construction.

The stores would have supplied jobs for about 1,800 people in the D.C. area, according to a Business Insider report. Walmart workers have been striking for better pay and benefits, although CEO Mike Duke maintains the wages are competitive for the retail industry, according to the report.

A leading D.C. business group was skeptical about the bill’s effect on other business as well, concerned it would discourage businesses from investing in the city.

“At first blush, [Orange’s] amendments are worse than the original bill, and we did not like the original bill at all,” Barbara Lang, chief executive of the D.C. Chamber of Commerce told The Washington Post before the bill passed. “We just think this is ill-advised.”

A draft report of the bill found that “large retailers can afford to pay [their] employees a living wage with decent benefits,” referring to the Costco model, where better wages and benefits lead to “lower labor costs and higher profitability per employee than its competitor,” according to The Post.

Pressure is now on Mayor Vincent C. Gray, a Democrat, to decide whether or not to veto to the controversial bill. The mayor has supported Walmart’s investment in the city, hoping it would bring jobs and retail where both were badly needed.