DISTRICT OFFICIALS who travel to Las Vegas in May for the International Council of Shopping Centers will court companies to come to D.C. by telling them it is a good place to do business. Their chances of sounding credible don’t look good in the light of a proposal that would arbitrarily single out large retailers, requiring them to pay higher wages than their competitors. This misguided legislation will scare off would-be investors and should make existing businesses worry about being next in line for harmful regulation.
A bill authored by D.C. Council Chairman Phil Mendelson (D) and co-sponsored by a council majority would require stores of more than 75,000 square feet and with revenue of $1 billion or more to adhere to wage and benefit requirements not imposed on other businesses or organizations. The current minimum wage in the District is $8.25 an hour, $1 higher than the federal minimum wage, but for businesses affected by the Large Retailer Accountability Act, the minimum would be $11.75 an hour.
Wal-Mart, which plans to open six stores in D.C., including two this year, is the main target of the legislation. That is its reward for wanting to bring jobs and shopping choices to Washington residents without a government subsidy. Other stores, including Costco and Home Depot, also would be affected.
The proposal, heavily pushed by unions as a precursor to a so-called living wage citywide, was the subject of a raucous public hearing that underscored its inconsistencies and problems. The fact that equally profitable retailers with a smaller footprint would be exempted or that grocery stores seem to have been carefully excluded shows just how arbitrary and unfair it is. What’s the rationale for making Wal-Mart or Costco pay its cashiers more than Apple or Nike pays its cashiers? Is it really the government’s business to give advantage to one set of employees and businesses over another? Also, as an adminstration official for Mayor Vincent C. Gray (D) testified, the new minimum wage rate would be 55 percent higher than what’s offered in competing Maryland and Virginia. That will have consequences for economic development and job creation.
The District is consistently graded among the nation’s worst jurisdictions in friendliness to business, yet some council members persist in the magical thinking that the city’s innate attractiveness and proximity to the federal government make it irresistible to companies. Let’s hope that some who unwisely signed on to this measure will have second thoughts and, if they don’t, that Mr. Gray will make sure it never becomes law.