Exactly When Is a City Strong Enough to Spar With Walmart?
The D.C. Council passed a bill Wednesday night establishing a "living wage" within the city of $12.50 an hour – not for all workers, but for a narrow class of them employed in retail outlets larger than 75,000 square feet, working for companies with corporate sales of more than $1 billion. If these figures sound strangely specific, it's because they were designed with a particular company in mind that's often at war with labor activists: Walmart.
The national big-box brand that found its niche off suburban and rural highways has been trying to elbow into the much tighter, untapped urban market. More specifically, Walmart has been angling to get into D.C. for the last several years. The same critics who have turned up in other cities objected to the company's arrival, on political and philosophical and labor grounds. They ultimately managed to push this legislation, called the Large Retailer Accountability Act, which awkwardly defines a "living wage" at Walmart as $4.25 an hour more than what the city guarantees all its other workers (the D.C. minimum wage is $8.25, compared to $10.55 an hour in best-in-the-nation San Francisco).
On the eve of the vote this week, Walmart announced that it would abandon plans for three of six forthcoming D.C. stores if the city passed the law, effectively setting up a game of chicken with the city council. In passing the bill anyway Wednesday night, by a vote of 8-5, several council members made an interesting calculation.
“We’re at a point where we don’t need retailers," council member Vincent B. Orange said. "Retailers need us.”
That comment bluntly acknowledges that a lot of communities are at the mercy of Walmart and big-box retailers like it, who can promise low-skilled jobs and affordable products (including groceries) for areas that badly need both. In fact, Walmart is often able to enter communities with the help of public money. Plenty of local governments are so eager to have the retailer that they offer up land and tax breaks to woo it.
Inside cities, the company has clearly encountered a different reception. And it's not simply cultural. Big cities think they have leverage of their own. Chicago similarly tried to pass a living wage bill in 2006, although it was vetoed by then-Mayor Richard Daley. The Chicago city council continued to spar with the company, finally reaching a modest agreement in 2010 that Walmart would raise wages slightly, use union labor to build its stores and contribute to local non-profits, all to secure zoning approvals for its second Windy City store.
Chicago is now dotted with "leaner, yuppier" Walmarts. Three more opened in January, with the company announcing plans for still more to come. Meanwhile, though, the retailer appears to have all but abandoned plans to crack New York City, the metro market with the greatest leverage of all.
In this contest of wills, Washington appears to stand somewhere between Chicago and New York City. District Mayor Vincent Gray could still veto the bill. And even if he signs it, there remains the only-in-Washington obstacle that the legislation must clear Congress as well. Some of Councilman Orange's own colleagues, though, clearly don't agree with him that Washington can afford to turn down jobs, even if they're low-paying jobs.
The city, Orange said, had "arrived" as a retail destination, and it does sit at the heart of one of the highest-income, most highly educated, low-unemployment metro regions in the country. But as councilwoman Muriel Bowser countered, as reported in the Washington Post, not all of the District's neighborhoods have arrived at quite the same place. Whole pockets of the city are still short on jobs, very short on retail, and bereft of any other economic development momentum. And in those places, a philosophical debate about whether to kowtow to a bullying retail chain looks very different.
This is what makes the Walmart question so thorny: At the macro level, maybe whole cities feel they can afford to say "no" to the company. But how many of the individual people who might be employed by it can?
Top image taken on the eve of the opening of Chicago's first Walmart: Joshua Lott/Reuters