Walmart Hates Higher Wages So Much It’s Willing to Close Stores
Written by Aviva Shen
Walmart fought hard to persuade DC residents to let it open stores in the district. But now the retail giant is threatening to walk away from three planned sites if the DC City Council passes a “living wage” bill that would require all major employers to pay workers a minimum of $12.50 an hour.
Walmart claims that the bill, which applies to retailers with corporate sales of $1 billion or more and stores that are 75,000 square feet or larger, is “arbitrary and discriminatory.”
In a Washington Post editorial, general manager Alex Barron issued an ultimatum to Mayor Vincent Gray: veto the bill, or Walmart will halt construction on stores at Skyland, Capitol Gateway, and New York Avenue.
In less than 24 hours, the corporation is already seeing results: Some council members who voted for the living wage bill are now balking. Councilmember Kenyan McDuffie said he is “going to give this some thought” because he voted yes “without knowing Walmart was going to pull out.”
Walmart is accustomed to singlehandedly taking down worker rights legislation.
Seven years ago, Walmart threatened to scrap its plans to open stores in Chicago after the city passed a similar living wage law. The mayor promptly vetoed the bill.
In March, New York raised its minimum wage but gave tax subsidies to Walmart and other firms that hire seasonal workers. Unions claimed at the time that Walmart had influenced the deal behind the scenes.
Other large stores like Costco, Home Depot, Target, and Macy’s would also have to abide by the DC proposal. But the new $12.50 minimum would be an especially dramatic change for Walmart, which currently pays workers 28 percent less on average than other large retailers, even as it reaps profits of nearly $450 billion a year. In contrast, Costco will have no problem meeting DC’s requirement if it passes — the average Costco worker currently makes $21.96 an hour.
Walmart’s refusal to pay their employees a livable wage translates into a bigger burden for taxpayers.
A Congressional report found that the workforce of a single Walmart store consume roughly a million dollars in public benefits every year, relying on “safety net” programs like Medicaid, food stamps, school lunch, and housing assistance to survive. Since Walmart is the largest private retailer in the nation, the full taxpayer cost of the store’s labor practices is exponentially higher.
Protests erupted in June and last November over Walmart’s worker abuses. Besides paying poverty level wages, Walmart has a strict policy against overtime pay, and workers allege that managers deny them bathroom breaks or basic medical accommodations.
The company also fired, suspended, and disciplined workers after the strikes last month, likely in retaliation.
Walmart was only allowed to start building in the nation’s capital after agreeing to a voluntary Community Partnership Initiative, in which the chain vowed to contribute $21 million to local charities, stock local products, allow space for local retailers, fund transportation measures, and create a citywide job training program for low-income and at-risk residents, among other conditions.
The DC Council will hold a final vote on the bill Wednesday.
UPDATE: The living wage bill has passed the DC Council 8-5 and is now on its way to Mayor Gray to either sign or veto.
This post was originally published at ThinkProgress.
Photo by Brave New Films