Why Walmart is the Big Winner in DC's Minimum Wage Increase
Earlier this year, Washington, D.C. flirted with the idea of creating a punitive "living wage" specifically designed to hit Walmart stores and a few other big-box retailers. Walmart threatened to pull out of the Capital City if they were forced to pay that wage. Mayor Vincent Gray vetoed the bill but promised to back in its place a general increase in the District's minimum wage. Now, the city council has responded with a bill to gradually increase the minimum wage for all businesses from $8.25 to $11.50 in 2016. The mayor has countered with $10 an hour but doesn't have the votes to stave off the higher number.
At the Washington Examiner, Sean Higgins explains how "America's Place for Savings" is the real winner if and when the minimum wage gets jacked up by government dictate:
In 2006, Walmart's then-CEO Lee Scott said… "Though we do not intend to take a position on any single piece of legislation, we believe Congress should increase the minimum wage."
In the case of the D.C. bill, Walmart often already does pay a $10 or $11.50 wage. According to Payscale.com, Walmart's cashiers on average make between $7.50 and $10.77 and sales associates make between $7.63 and $11.83. Overall, its wages are just five percent below the retail industry average.
It is a different story for D.C.'s small neighborhood stores — which already face the daunting prospect of competing with Walmart. "Small businesses are the least able to absorb … a dramatic increase in their labor costs," notes the National Federation of Independent Business.
Score this a win for Walmart then. They can absorb the higher wage relatively easily while their smaller competitors cannot. And if faced with job loss or cutbacks at mom-and-pops, expect the City Council to try and pass an even-higher wage in order to help their constituents out.
Watch Reason TV's coverage of "The War on Walmart" (2011) which features future New York City Mayor Bill de Blasio bloviating about how Walmart stores are "Trojan horses" that sneak into cities and destroy their economies (really):
