Washington, D.C. — The Large Retailer Accountability Act would impose a $12.50 living wage on businesses with footprints larger than 75,000 square feet and sales greater than $1 billion.
Washington, D.C. — The District of Columbia can say goodbye to a potential 4,000 new jobs — 3,000 permanent positions and 1,000 construction jobs — if the city council’s vote to pass the Large Retailer Accountability Act is approved by the mayor. The act, which imposes a $12.50 hourly living wage on businesses that have corporate sales of more than $1 billion and spaces greater than 75,000 square feet, has Walmart reconsidering its expansion plans in the city. The living wage is a 50 percent premium over Washington, D.C.’s current minimum wage of $8.25 an hour.
The city council approved the bill last week by a vote of 8 to 5 despite threats from Walmart that the company would cancel plans for all six stores it had initially agreed to develop in the district. While three stores have yet to begin construction, Walmart is moving ahead with the three locations that are already under development. Two of the stores are expected to open this fall.
Victor Hoskins, deputy mayor for planning and economic development in the District of Columbia, projects that a significant portion of the 4,000 jobs potentially lost would have been filled by residents of the district.
Most of the backlash regarding the bill comes from the fact that big-box retailers, such as Walmart, Target and Macy’s, are now focusing their expansion plans on cities outside of Washington, D.C.
“We actually lose about $1 billion in retail leakage every year going to the surrounding counties and cities,” says Hoskins. “What we’re been trying to do is reposition ourselves to capture that, and this really rips the guts out of our strategy.”
While the Large Retailer Accountability Act would currently only apply to the Walmart stores planned for the district, any operating stores that have 75,000-square-foot spaces and earn over $1 billion would have to adhere to the living wage within four years.
“Unfortunately, the district may soon adopt legislation that discriminates against business and threatens to undo all we have accomplished together,” wrote Alex Barron, a regional general manager for Wal-Mart U.S., who is responsible for all stores planned for Washington in a July 9 opinion piece for The Washington Post.
The proponents of the union-backed legislation claim the living wage is a victory for income equality and low-income workers.
The unemployment rate in Washington, D.C., is 8.3 percent, according to the U.S. Bureau of Labor Statistics. That figure is slightly higher in wards 5, 7 and 8, which is where the new Walmart locations were planned.
“There are people on the council that have a different perspective — maybe it’s the lack of the understanding of the financial impact. This has sent a chilling effect through the retail market,” explains Hoskins.
Hoskins says that Mayor Vincent Gray has ten days after he receives the bill to make a decision whether or not to veto it.