Earlier this summer, city lawmakers in Washington, D.C., passed legislation that would raise the minimum wage in the city for workers at certain large retailers from $8.25/hour to $12.50/hour. It was seen as a direct challenge to Walmart, which had planned to open new stores in the nation’s capital, and which threatened to pull out if the bill was enacted. But now that’s a non-issue, as Mayor Vincent Gray has vetoed the legislation.

“Over the last several weeks and months, I have listened closely to hundreds of individuals and groups on both sides of the issue and have heard many arguments for and against the bill,” reads a letter from Vincent explaining his decision. “I recognize that reasonable people passionately support this legislation. And I strongly believe that all District residents should earn a living wage. However, after careful consideration, I have concluded that the bill, while well-intentioned, is flawed and will fail to achieve its intended goals.”

The bill raises minimum wage in the city from $8.25/hour to $12.50/hour, but would only impact retailers with annual corporate sales of at least $1 billion with at least 75,000 square feet of retail space in the District.

The mayor maintains that the legislation would not help the retail workers of Washington, but instead “would result in significant harm to the residents and areas of the District most in need of jobs, economic development, and new amenities.”

Among the mayor’s issues with the bill are that it does not apply equally to all workers, and that it exempts large retailers with existing labor agreements.

“Instead of these arbitrary and partial attempts at insisting on living wages for only certain workers and certain sectors, I propose that we raise the minimum wage for all District residents,” writes Vincent.

He also contends that, while the bill has been targeted at Walmart and its plans for new stores in the area, the new wage would impact other retailers that are already present in D.C. or have plans to open stores there, like Target, Home Depot, Wegmans, Lowe’s, Walgreens, Harris Teeter, AutoZone and Macy’s. Vincent fears that retailers that have yet to launch in D.C. will abort those plans and those that are already in the city will cut their workforce in response to the higher wages.

Given D.C.’s location, surrounded by highly populated areas of Virginia and Maryland, the mayor expressed concern that the bill does nothing to insure that the people getting the higher-rate jobs are indeed D.C. residents.

“Instead of creating higher-paying entry-level retail jobs for lower–skilled District residents, at best the bill will create a very small number of higher-paying jobs, many of which will go to higher-skilled Maryland and Virginia residents who will commute into the District,” he contends. “Meanwhile, I
am convinced more retailers will open stores just outside the District’s borders, where labor costs would be more than 40% cheaper for large, non-union retailers.”

The D.C. city council can override the mayor’s veto but would require that 9 of the council’s 13 members approve the override. Considering that the bill passed on an 8-5 vote, and the Washington Post reports that no council members have publicly stated a change in stance since then, it seems likely that the veto will remain after the council votes next week.

A rep for Walmart tells the Post that if the veto stands, “all stores are back on” and that Walmart looks “forward to finishing the work we started in the city almost three years ago.”

Mayor Gray vetoes ‘living wage’ bill aimed at Wal-Mart, setting up decisive council vote [Washington Post]

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