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City on the Hill: Waging out the City

August 29, 2013


Ask any progressive Washingtonian about the Large Retailer Accountability Act (LRAA) passed by the D.C. Council back in late June, and they’ll likely tell you there’s a lot of good stuff there. Not only would the bill raise the minimum wage from $8.25 to $12.50 an hour for employees of the District’s largest retailers—defined as being over 75,000 square feet and having a parent company with revenue over $1 billion—it also promotes unionization and gives local businesses an edge in today’s global economy.

But D.C. Mayor Vincent Gray doesn’t seem to see it that way.

More than two months since the Council passed the LRAA in an 8-to-5 vote, the Mayor still has not indicated whether he will veto the bill or sign it, and the messages from his office suggest the former. Last month, he went on local radio station WTOP and worried aloud about how forcing giant retailers to pay employees a living wage could slow development. This past week, his Deputy Mayor, Victor Hoskins, knocked the rhetoric up a notch, saying that the bill has already had “a chilling effect” on the city’s efforts to attract retailers.

By retailers what Hoskins really means is Walmart. America’s largest retailer is planning to move into the District with six new locations over the next few years, but threatened to walk away from three and reassess the three others if Gray signs the bill. The company has been on a media blitz since the LRAA passed the Council, and was recently joined by six other retailers who sent a letter to Gray urging a veto and decrying what they describe as “arbitrary” and “unfair” treatment.

But singling out large retailers for wage hikes is anything but arbitrary. It’s just common sense. Everyone knows it’s near impossible to support one person in this city on $8.25 an hour—let alone an entire family, even if both parents work. But raising the minimum wage to $12.50 in one stroke would likely be too big a jump for many small businesses to endure, as they generally spend a larger portion of their revenue on wages and benefits. Without a doubt, the baseline minimum wage in D.C. should be more than $8.25, but the perfect shouldn’t be the enemy of the good.

Beyond the shallow gripes of unfairness, opponents of the legislation have a more convincing point—at least on the surface. Walmart, Macy’s, and other giant retailers say the largely low-wage, no-benefit jobs they create will disappear if their wages are hiked and they’ve had success selling their line. A litany of supposedly-liberal local commentators have come out against the LRAA, basically repeating Walmart’s mantra that plateauing job creation in the District means it would be damaging to raise wages.

This, upon further examination, proves to be an utterly empty and simplistic argument. Labor economists have documented since the early ‘90s how a rising minimum wage actually fosters more job creation—not less—and recent national-level studies confirm their conclusions.

Put simply, when the working class population is making more money, they tend to spend more on immediate consumption rather than packing the money away in stocks, bonds, or overseas accounts like the upper class. When people spend more, businesses make more money and can expand further, hiring new employees. It’s clearly in the interest of both job creation and and economic justice that the minimum wage be raised.

Let’s not kid ourselves. These large corporations have the money to pay a $12.50 an hour wage. Wal mart, after all, announced in June that it would spend $15 billion buying back its own stock.

What these giants fear isn’t the wage. They fear a large-scale movement for workers’ rights and fair pay. Although shamefully under-covered by the mainstream media, the last two years have seen a dramatic change in organizing tactics and a marked increase in the number of small, often wildcat strikes at low-pay retailers like Walmart.

Combine that new and growing activism with possible national headlines about the LRAA in D.C. and retailers are afraid a bill signing here could empower their employees to speak up. Even worse, it could give local governments across the nation another model to make their communities fairer for everyone. That could turn into a national conversation about our low-wage, low-benefit economy—exactly the talk Walmart doesn’t want to have.

At the end of the day, it’s unlikely we’ll see that scenario. Mayor Gray, despite his claims of progressivism, seems beholden to the corporate interest on the bill, and the Council needs one more vote to override a veto. But even without it, there’s still a way forward for the LRAA and legislation like it. Gray faces reelection next year, and a veto would open up room on the left for a pro-living wage candidate. Councilmember Jack Evans (D-Ward 2) voted for the measure in June, and his colleague Tommy Wells (D-Ward 6) says he supports a “living wage for everyone” despite voting against it.

No bill is perfect, and the LRAA is far from an exception. But it does represent a legitimate and potentially effective effort to alter the fundamental logic of the contemporary American economy—one that favors depressed wages, business consolidation, inequality, and, as a result, low growth.

The LRAA doesn’t just help unions and working class employees. It helps the mom and pop shop. It helps families. It helps the whole economy grow. And students should support it for those reasons, because, whether we think so or not, all of us could end up in a low wage job in the District someday.

 

Want to talk boycott Walmart? Email Gavin at gbade@georgetownvoice.com


Gavin Bade
Gavin Bade is Managing Editor of The Georgetown Voice


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