The Washington Post

Complex calculations behind the Wal-Mart vote

Opponents David Catania (left), Muriel Bowser and Tommy Wells confer as Vincent Orange (not pictured) defends the bill to force large retail stores to pay higher wages. (Bill O’Leary/The Washington Post)

Wednesday’s vote on the District’s new “living wage” law had about a decade of history behind it.

Council Chairman Phil Mendelson (D), a longtime friend of labor, has tried several times to pass a bill mandating a higher minimum wages for big box stores. In the past, they’ve been almost symbolic efforts, a duty to the unions who knew they didn’t really have a chance.

As Wal-Mart announced plans for store after store last year, with little resistance from the D.C. Council and and no binding community benefits agreement, it appeared that the company’s triumph was complete.

And yet, when the final vote came on a bill that would require retailers with more than a billion dollars in sales and operating in spaces larger than 75,000 square feet to pay a minimum wage 50 percent higher than the District currently mandates, eight council members voted yes.

Several of the votes were predictable: Council member Muriel Bowser (D-Ward 4), for example, has two Wal-Marts coming to her ward, and is conscious that Wegman’s — the New York-based grocery emporium highly coveted by local leaders — wouldn’t come to an open development site at Walter Reed if it were required to pay a starting wage of $12.50 an hour. On the other side, colleagues Marion Barry (D-Ward 8) and Jim Graham (D-Ward 1) are reliable union allies.

Council member Vincent Orange (D-At Large) surprised many Wilson Building watchers when he pushed for the bill since during his first stint on the council representing Ward 5, he was more pro-big box than anyone. But big business abandoned him in his last election, spooked by his link to a campaign controversy, leaving him to find a new constituency to maintain his citywide perch. With such recent proposals as a moratorium on speed cameras and the living-wage bill, he has a populist drum to beat on the stump.

Mayoral candidate Jack Evans (D-Ward 2), who frequently berates the council for being anti-business, justified his vote in favor of the living wage bill by saying that he’d traded it for a lower sales tax in the budget. It’s a calculated step: While telling labor he’s got their backs, he’s also telling business he doesn’t much care for the legislation. And now he has more leverage as finance chairman to offer tax breaks to businesses who find the higher minimum wage burdensome. “I think that he’s thinking the real reason businesses come to the city is that there are other incentives in place,” said Mike Wilson, the legislative campaigner for the United Food and Commercial Workers Union.

Wal-Mart is adamant that it can’t pay a minimum wage of $12.50 but also says that it pays an average retail employee wage of $12.67 nationwide. Also, under the bill, it’s actually a wage rate, which means benefits would be included, and the wage would likely be lower. It seems Wal-Mart didn’t want to set a precedent for jurisdictions nationwide that might consider doing something similar. After all, if this thing metastasized, it could end up costing the company billions in profit.

Labor leaders, which drafted the bill originally, met with Wal-Mart representatives to say they would pull the bill if Wal-Mart agreed to collective bargaining. Predictably, the mega-retailer said no. “They pulled out all the stops and said this is our number one priority,” said a council staffer who requested anonymity to speak freely. “And when all labor pulls in one direction, that is a powerful thing in this council.”

If the measure stands, whether or not Wal-Mart follows through on its threat to leave D.C., unions will have avoided their nightmare scenario: Having a low-wage, non-union competitor figuring into future bargaining sessions with the area’s unionized grocers. “Giant and Safeway will then be saying we’re losing money, we need givebacks from the workers,” said Joslyn N. Williams, president of the Metropolitan Washington Council, AFL-CIO.

All of this, of course, depends on what Gray decides to do. He came to power with labor’s help, and then turned around and made Wal-Mart a cornerstone of his economic development strategy — he cares deeply about the success of Skyland Town Center, which won’t happen if Wal-Mart pulls out. Like nearly everyone else in this debate, he’s also likely running for mayor.

Which still may not mean this never-ending game is over.

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.



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