Mayor Vincent Gray said his veto decision was consistent with his campaign promises and his “one city” vision. (Marvin Joseph/The Washington Post)

D.C. Mayor Vincent C. Gray on Thursday vetoed the Large Retailer Accountability Act, a measure passed by the D.C. Council in July that would require certain businesses — most notably Wal-Mart — to pay their employees at least $12.50 an hour in wages and benefits. Shortly after sending a letter announcing his veto to Council Chairman Phil Mendelson, Gray (D) discussed his veto decision with The Washington Post. The transcript has been lightly edited for length and clarity.

Can you talk about the decision-making process? It’s been no secret you’ve been skeptical of this bill for a long time. Did you really give this full consideration up to today?

I did. I wouldn’t have just wasted the number of hours I did, the number of meetings I had in here. I even met with the clergy and some of the union members. I spent about two hours in the meeting. It was one of the longest single meetings I’ve had. I walked through some neighborhoods and while the walk-throughs were not specifically focused on the LRAA, a lot of people brought it up, and we had lots of conversation. I wanted to hear from people. I wanted to hear the reasoning that people had behind their support for the bill. Some of it I found just to be a misunderstanding.

Such as?

Such as people thinking they would get $12.50 an hour when they had so many exceptions in there. They had only a certain number of jobs being captured by this bill. Secondly, those jobs that already exist would be deferred for four years before they would be subject to the increase. You had two major entities, Safeway and Giant, who are exempted from it altogether because they have a collective bargaining agreement. I think there are people who support this bill who thought it had a much more sweeping impact than it really did.

From what you heard from the people who supported the bill, was there anything they said that you felt had some merit?

Yes, but it would have to be expanded, and that is the idea of being able to find a way to pay people more. That’s why, if you’ll read my letter, I talk about now talking about how we increase the minimum wage for all people in the District of Columbia. I think that would be a good thing. This bill would have left many, many people out of the equation had it been enacted.

Supporters would argue, we agree with that, but this is a good start.

I don’t think it’s the kind of start the city needs. I think it would be a job killer in the city. A lot of jobs that would be created would not be created in the District of Columbia. The ability to be able to recycle our dollars in the District of Columbia would be stymied, in my opinion, because I frankly think what would happen is that a lot of these retailers would simply build around the perimeter of the city, just outside of it, and would pay whatever wage they choose to pay. And people would go shop from the District of Columbia out there. Let’s be honest, if you live in the District, you can get to some of these places in five to 10 minutes.

What’s your sense of what the minimum wage should be?

I don’t know yet. I want to have those conversations with council members, and I want to have them with the business community in the city. I want to have it with some of the employee advocates. I want to have those conversations. It would start with me saying, I do think we need to increase the minimum wage. There may be some people who say no, and that perhaps ends the conversation with them. I think a lot of people will say, we agree with that, and then you get to the discussion about what is a reasonable increase.

Have you specifically discussed with the retailers, including Wal-Mart, whether or not they would have an objection to an across-the-board minimum wage increase?

I haven’t had that discussion. It would have been irrelevant, because if this bill were enacted, they said, we’re not going to build three of them and we’ll get out of the other three if we can. It would have been an irrelevant issue.

How much was Skyland a factor? Was that at the nucleus of your thinking on all of this?

Certainly, when you talk about “one city,” to me, “one city” is being able to have reasonable access for people wherever they live in the city. You look at areas of wards 7 and 8 that are food deserts, that are retail deserts. Being able to create that kind of access is important to me, and, frankly, being able to get people to work. We still have significantly higher levels of unemployment in wards 5, 7 and 8, even though it’s come down. When I got here the unemployment level was 30 percent in Ward 8. Now it’s come down, quote-unquote, to 22 percent. But it’s still very high.

So, in essence, your argument is Wal-Mart jobs are better than no jobs.

I think it’s a résumé builder. I think it’s a great opportunity for people for people to build their own work ethic. And people don’t sit in these jobs. They either move up, because Wal-Mart has a fairly significant record of promotion, or they move out; they move to something else. Applying for a job with no job is a very difficult hill to climb. When you go walk in and people say, “Where are you working now?” And you say, “I’m working nowhere,” that unfortunately has a negative psychological impact.

To follow up on Skyland, given all the work you put into that, was the die cast when Wal-Mart said Skyland doesn’t happen if this bill passes? How could you have credibly at that point agreed to something that would have killed that project?

If I thought that this was really going to be otherwise a tremendous benefit for the people of the District of Columbia, then I would have swallowed hard and done it. Wal-Mart obviously took the position they weren’t going to develop at Skyland and other places for that matter. What we would have done is gone back out and redoubled our efforts to get somebody else. It wasn’t as if I only focused on Wal-Mart in trying to get an anchor for Skyland. I talked to Target, I talked to others, and I would have gone back to them to see what we could do to convince them to come to the city.

On the minimum wage issue, we’re now at $8.25. You said you wanted a meaningful increase. Is 25 or 50 cents meaningful, or are you looking to get to double digits?

I’m open for discussion at this stage. I want to hear from people on this and you know I won’t have any difficulty at the end of that process weighing in on what I think. I do want to give people the opportunity to express their opinions to me. And it was hard to do that in the context of what we’re dealing with now. You had this prospect of $12.50 on the table, so would want to talk about $9 or $8.50 or whatever.

Now we might be talking about it in the context of a mayoral campaign.

This was done in the context of what I stood for from the very beginning of being elected. I said economic development, and economic development across the city, was going to be one of the linchpins of this administration. I think if you look at our first two years, eight plus months, it’s clear that’s what we have done. And we will try to make the decisions that we believe are in the best interests of the people of the city and in the best interests of that kind of economic development. Being able to recycle our dollars in this city benefits everybody. To be able to get more people to work in this city has a tremendous benefit. Some of the people hired for the $12.50 jobs are people who would have lived in Maryland and Virginia. They would have paid their taxes in those states.

In this process did you get any assurance from Wal-Mart that once we got to this point, that if you vetoed the bill, that Skyland would definitely be back on?

No. I have not talked to them since I made a decision. I got an assurance from them that there would be no three of those six, but as for them saying that they would automatically be back in the game, I did not get that assurance. And the concern I have is, even if this veto is upheld, I hope this won’t have a chilling effect on retailers in the city, because people who are in this kind of business, there’s a very fragile relationship. Even though the veto may be upheld, it obviously doesn’t put this into play. People say, you know, I’m not sure if I want to do this right now. I want to get a better assurance from the city and see what happens. What is encouraging, frankly, is what happened in Chicago. Chicago had the same bill back in 2006, and Daley vetoed it. They had no Wal-Marts at the time. They now have nine Wal-Marts. [Author’s note: A 10th opened this week.]

Seemed like you were destined to alienate some supporters either way with this decision.

Yeah, that happens in this job. You have to make the best decisions that you believe are best for the people that you serve. People knew what I stood for when I ran for this office. To those who would raise questions about unions, look at my record on unions. We just did a project labor agreement the other day to build a stadium that will involve unions. Our workforce, which is largely unionized, in the government got the first raise they have gotten in years, a 3 percent increase. We probably have 60 to 70 percent of our unions now have new bargaining agreements. I don’t think labor can really raise a broad issue about me and my support for labor. I just happen not to agree on this one.

What do you say to District residents who are working at Giants and Safeways in union jobs that are now going to see downward pressure on their wages because Wal-Mart’s coming in and is not subject to collective bargaining and is not going to be subject to this bill?

First of all, a lot of people are going to get jobs who don’t have jobs at this stage so again I go back to the issue of it being a resume builder. Secondly I don’t know of a case being made that somehow there’s a retailer that’s going to reduce their wages. Safeway and Giant are already organized.

Can’t you see employers coming to the bargaining table and saying, “OK, guys, you’ve had it good for a long time but now we’ve got Wal-Mart in town. We have to compete, and you guys need to take a haircut.”

Well, I don’t know, they can say anything they choose to, but you know it hasn’t happened with Costco in town. It hasn’t happened with Harris Teeter in town. It hasn’t happened with Walgreens opening. Remember, our population is growing at the rate of 1,100, 1,200 a month. There are more customers in this city. There is a broader customer base that is growing every day, and I want to keep those customers in the city. I frankly think people are desperate almost for more retail opportunities. I tell you one thing, when you look at it from the customers’ side, I’ve heard a lot of people in the east end of the city who want to see this come. And I haven’t heard from any retailer who said that if you veto this bill, that if Wal-Mart comes, that we’re going to be in peril.

So you’re secure you will maintain union support, even possibly in a reelection campaign.

I don’t know. That remains to be seen. But I am secure in the decision that I made. I made a decision that was based on the principles on which I stood in the very beginning. I think unions in the city have done far better with me as the mayor then they had done prior to that. I don’t think anyone can make a credible case that I have not been true to what I said I was going to be true to with unions in the city. And there are ample examples of that. I don’t have any difficulty making that case and at the end of the day, people have to make their own decision.

Aaron C. Davis contributed to this post.