Washington D.C.'s Plan: Stop Walmart First, Help the Poor Second

July 17, 2013

The Washington, D.C., city council has just passed legislation making the nation's capital officially hostile to Walmart. The law targets any city store with a net worth of over $1 billion, with a nonunionized workforce and occupying a space of more than 75,000 square feet -- but since no other big-box retailers operate in D.C. today, it's a safe bet that the city council had Walmart in mind. Such stores must now pay wages of $12.50 an hour -- $4.25 above D.C.'s minimum wage, itself a dollar higher than the federal rate, says Scott Beyer in City Journal.

Walmart is currently constructing three stores in Washington and planning three more. Together, they would provide 1,800 jobs and $15 million in annual sales taxes. The areas the stores are planned in are in dire need of jobs and economic activity.

  • In southeast D.C., some neighborhoods barely have economies to speak of; they accommodate residents through a motley mix of liquor stores, convenience stores and fast food.
  • The lack of basic services underscores the area's broader social problems: in Ward 8, which covers much of the southeast, one-third of the population is impoverished and 22 percent unemployed.

But members of the city council objected to building a Walmart in southeast D.C. because Walmart would pay some workers less than the city's median hourly wage for retail salespeople. The bill typifies the opposition that Walmart faces as it tries expanding from the suburbs into major cities.

  • In 2007, community resistance killed proposed stores in Queens and Staten Island, New York City.
  • In California, similar efforts have kept stores out of San Francisco, San Diego and Los Angeles.

Unions, antipoverty advocates and wealthy progressives argue that Walmart hurts small businesses and keeps wages down for the poor. Their cure for these alleged ills is to impose onerous and expensive mandates, including requirements to pay a "living wage." In response, the retailer has attempted to build support with community outreach and charitable giving.

If Washington and other cities with high poverty and unemployment rates really want to turn things around, they should embrace economic development. Sure, an entry-level job at Walmart won't make anyone rich. But it can lead to managerial positions that pay over $100,000 annually; indeed, three-quarters of the company's managers began as low-level employees. Even if that weren't the case, low-paying jobs would still offer a boost to areas like southeast D.C., where so few jobs exist.

Source: Scott Beyer, "Stop Walmart First, Help the Poor Second," City Journal, July 11, 2013.

 

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