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 operating in the nation's capital to pay their employees a "living wage" of at least $12.50 an hour.
Wal-Mart has warned it would scrap plans for three of the six stores it had hoped to build in Washington if the bill becomes law.
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.
Council members voted 8-5 to approve the measure, setting up a difficult veto decision for Mayor Vincent Gray. The Democratic mayor must balance liberal local politics with his administration's job-creation and economic development goals.
While Gray has not said whether he plans a veto, he told the council he has deep reservations about the bill. Two of the stores Wal-Mart says are imperiled by the measure are in predominantly African-American communities east of the Anacostia River, where Gray lives and where unemployment is far higher than elsewhere in the city.
The council would need nine votes, one more than the bill received Wednesday, to override a mayoral veto.
"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 wrote to the council.
His administration has said he would prefer for the council to discuss raising the city's minimum wage of $8.25 rather than singling out major retail chains.
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. Besides Wal-Mart, numerous business and trade groups oppose the bill.
In addition to the three stores it might 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 Chicago stores.
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.
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.
"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."