A D.C. Council bill that would require some city retailers to pay a higher minimum wage to their employees is set for a key vote Friday, two months after a hearing revealed sharp divisions on the legislation.
The latest version of the Large Retailer Accountability Act would require outlets of some major retailers to pay a “living wage” of no less than $12.50 an hour, significantly more than the D.C. minimum wage of $8.25. The legislation has long been seen as targeting Wal-Mart and other big-box retailers.
Council member Vincent B. Orange (D-At Large) said Thursday that he will move the legislation Friday at a meeting of the Business, Consumer and Regulatory Affairs Committee, which he chairs.
The original version of the bill set the “living wage” at $11.75 an hour, but the draft circulated by the committee staff Thursday would increase the amount by 75 cents, a move intended to keep pace with the cost of living, Orange said.
The draft also eliminates language that would have mandated the higher wage only for retail locations of more than 75,000 square feet. The change means the bill’s reach could be significantly broader than the six Wal-Marts expected to open in the District in the coming years.
Under the revised legislation, any new retail outlet affiliated with a parent company having yearly revenue of $1 billion or more would be subject to the wage requirement, regardless of the size of the store. A draft report mentions Apple and Nike as among the retailers that might be affected. Franchisees and subcontractors, however, would be exempt.
Existing stores would not be affected under the amended bill, but Orange said he would include language that would require existing stores to pay the higher wage within two years.
“The committee finds that large retailers can afford to pay its employees a living wage with decent benefits,” the draft report says. The report also refers to the “Costco model,” asserting that Costco’s higher wages and better benefits lead to “lower labor costs and higher profitability per employee than its competitor.”
The revised bill received a chilly reception from a leading D.C. business group, which said the legislation would discourage investment in the city. “At first blush, [Orange’s] amendments are worse than the original bill, and we did not like the original bill at all,” said Barbara Lang, chief executive of the D.C. Chamber of Commerce. “We just think this is ill-advised.”
Lang said she is especially concerned because the bill would “pit small businesses against large businesses” in the competition for employees. A more worthwhile debate, she said, would consider the merits of raising the District’s minimum wage. “Let’s have that discussion and that debate, rather than be discriminatory toward one part of the business community,” she said.
Orange is unconvinced that the bill would have the chilling effect predicted by its opponents. “Washington, D.C., is the hottest market, not just for businesses but for residents, and they have a lot of disposable income,” he said. “I believe businesses are going to come in and get this anyway.”
On Thursday, the amended bill appeared to have enough support to emerge from committee, but members said they were still reviewing it. Jim Graham (D-Ward 1) and David Grosso (I-At Large) said they were inclined to support it; Yvette M. Alexander (D-Ward 7) said she had “a lot of concerns.” Two Wal-Marts are planned for Ward 7.
Panel member Mary M. Cheh (D-Ward 3) was out of town and was not expected to take part in Friday’s vote, but her staff indicated that she has serious concerns about the measure.
If bill clears the committee Friday, it will be headed to a full council vote. Twelve of 13 council members were supportive of the legislation when it was introduced in January, but support wavered somewhat in the face of strong lobbying by the business community and opposition from Mayor Vincent C. Gray (D).