WASHINGTON (AP) — The D.C. Council issued a legislative rebuke to Wal-Mart on Wednesday, approving a bill that would require the retail giant and other big-box chain retailers to pay their employees a “living wage” of at least $12.50 an hour.
Wal-Mart has pledged to scrap plans for three of the six stores it had hoped to build in the nation’s capital if the bill becomes law. The measure was approved on a vote of 8-5, setting up a difficult veto decision for Mayor Vincent Gray, who must balance the city’s liberal politics with his administration’s job-creation and economic development goals.
While Gray has not said whether he will veto the bill, he told the council he has deep reservations about it. Two of the stores Wal-Mart says are imperiled by the measure are located in majority-black communities east of the Anacostia River, where Gray lives and where unemployment is much higher than in the rest of the city.
While some cities including San Francisco and Santa Fe, N.M., have approved across-the-board minimum-wage hikes, the bill would make Washington the first city to single out big-box retailers. It applies only to retailers with stores of 75,000 square feet or larger and annual corporate revenues of at least $1 billion.
In addition to the three stores it would not build, Wal-Mart spokesman Steve Restivo said in a statement that the company would “review the financial and legal implications on the three stores already under construction.”
“This is a difficult decision for us — and unfortunate news for most D.C. residents — but the council has forced our hand,” Restivo said.
The Chicago City Council approved a similar bill seven years ago, but it was vetoed by then-mayor Richard M. Daley. Joe Moore, the city alderman who sponsored the bill, said Wal-Mart made “the same kind of threats” about refusing to open stores in the city when the legislation was being considered. Wal-Mart ultimately opened several stores in Chicago.
New York state raised its minimum wage in March but only after agreeing to provide tax subsidies to stores that hire seasonal workers, including Wal-Mart.
Gray would prefer for the council to discuss raising the city’s minimum wage of $8.25 rather than singling out major retail chains.
“I strongly encourage the council to consider whether this bill would promote and encourage strong economic development for the district, improve the financial health of district residents, and improve the climate for businesses,” Gray, a Democrat, wrote in a letter to the council.
The council would need nine votes — one more than the bill received Wednesday — to override a mayoral veto.
The bill in Washington includes exceptions for existing businesses and stores with unionized workers, which has led Wal-Mart and other opponents to call it unfair. It’s backed by labor unions and other advocates for the poor.
The council chamber was packed with supporters of the bill. The Rev. Graylan Hagler, one of the leaders of the coalition, said Wal-Mart was being disingenuous because company representatives told him and other members of the clergy three years ago that they would pay a starting wage of $13 an hour in the district.
Wal-Mart says the bill would unfairly single out the company and could have the opposite of its intended effects, namely by flooding the stores with applicants who live in the suburbs and driving up prices at stores in the city. In addition to Wal-Mart, numerous business and trade groups oppose the bill.
“I, like many, believe that Wal-Mart in particular is not the best citizen nationally or internationally,” said Councilmember Tommy Wells, who nonetheless voted against the bill, saying: “I view this as a job killer. We are not rural America. We need our minimum-wage jobs, our low-wage jobs.”
Over the past year, national labor groups have been protesting wages and working conditions at Wal-Mart. Union leaders say Wal-Mart has retaliated against workers who speak out about difficult working conditions.
Wal-Mart has been trying to gain a foothold in major American cities for years, with some success. But there are many cities in which it has yet to open, including New York and San Francisco.
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(Copyright 2013 by The Associated Press. All Rights Reserved.)