D.C. Council Mugs Wal-Mart

This was originally posted on PoodleRose on July 16, 2013. Comments have not been migrated.

The Washington, D.C. City Council recently increased the city’s minimum wage in retail stores to $12.50 an hour. But, like many laws, this one has exceptions that benefit those with political connections. For example, the law, which was written by labor unions, exempts businesses with collective bargaining agreements. Businesses with less than 75,000 square feet or less than $1 billion in revenues are also exempt.

Interestingly, and not surprisingly, the law will only apply to one retailer when it goes into effect: Wal-Mart. Unions and local retailers supported the law because they fear the competition from the non-unionized Wal-Mart. In response, Wal-Mart has threatened to scrap plans to build more stores in D.C.

As the Heritage Foundation states:

But keeping Wal-Mart out would hurt many low-income D.C. residents. The new stores will be built in some of the poorest regions of D.C. that currently lack good retail options. (Indeed, some local churches currently organize bus trips to shop at the Wal-Marts in the suburbs.) It would cost thousands of jobs and force struggling D.C. families to pay higher prices.

A study conducted by MIT economist Jerry Hausman found that “Wal-Mart offers many identical food items at an average price about 15%–25% lower than traditional supermarkets.” Jason Furman, chairman of President Obama’s Council of Economic Advisors, explains that “that’s a huge savings for households in the bottom quintile, which, on average, spend 26 percent of their income on food. In fact, it is equivalent to a 6.5 percent boost in household income.”

None of this matters to the power-lusters on the D.C. council. Council member Vincent B. Orange said that the city doesn’t need to “kowtow to threats” from the retailer:

The question here is a living wage; it’s not whether Wal-Mart comes or stays. We’re at a point where we don’t need retailers. Retailers need us.

What the arrogant Mr. Orange fails to consider is, if Wal-Mart doesn’t build additional stores, there won’t be any wages, “living” or otherwise. He refuses to “kowtow” to Wal-Mart’s threats, but he does not hesitate to flex his legislative muscles and force the retailer to do his bidding.

The crime rate in Washington, D.C. has long been far higher than the national average. Is it any wonder? Look at the example that the city council sets.