In a letter sent to City Council Chairman Phil Mendelson, DC Mayor Vince Gray (D) announced his veto of a living wage bill aimed at large employers on Thursday morning.
The bill would require retailers with $1 billion in sales or more with 75,000 square feet or larger to pay employees $12.50 an hour in combined wages and benefits with an exception for those that collectively bargain with workers. The existing minimum wage in the city is $8.25 an hour, and increasing the wage to $12.50 would raise annual earnings of a full-time minimum wage worker from about $17,000 to $26,000.
Just ahead of a City Council vote to pass the bill, mega retailer Walmart threatened to walk away from three planned stores if the law were put into effect. The company claims that the bill is “arbitrary and discriminatory.” With Gray’s veto, Walmart released a statement saying, “Now that this discriminatory legislation is behind us, we will move forward on our first stores in our nation’s capital,” according to the Washington City Paper. Other stores like Costco, Home Depot, Target, and Macy’s would also have been impacted by the bill, but the increase in the minimum wage would have been particularly dramatic for Walmart, which pays workers 28 percent less on average than other retailers.
Walmart is used to getting its way on minimum wage bills. Seven years ago, it made the same threat to abandon plans to open stores in Chicago after the city passed a similar law, prompting the mayor to veto it. Yet its promise to both cities that opening stores will create jobs isn’t likely to pan out. In Chicago, evidence shows that it destroys as many jobs as it creates and doesn’t end up stimulating local businesses.
A body of research shows that increasing the minimum wage doesn’t hurt jobs and in fact can boost businesses’ bottom lines through increasing productivity, lowering turnover, and boosting demand from workers with more money in their pockets. States with minimum wage increases have above average job growth. Low wages are also costly: Workers at just one Walmart location make so little that they end up using around $1 million in public benefits.
Mendelson said Wednesday that he plans to hold a vote to override Gray’s veto on Tuesday, the councils’ first legislative meeting since passing the bill. Such a vote would require approval of nine of the council’s 13 members. It previously passed 8-5, and no one has said yet that they will change their vote.