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.

Read more.

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):

Comments

[Kaptious Kristen]

Small businesses are the least able to absorb ... a dramatic increase in their labor costs

Whaaaa...??? No wai!

[IDPNDNT]

Hey I was told that small businesses were benevolent employers pulling their employees out of poverty by offering living wages.

Opposed to big corporate who only pay slave wages!

[wareagle]

ah, the smell of the unintended consequences of feel-good legislation. Unfortunately, the folks who see things like this as "sticking it to WM" will miss who the actual victims are.

[Kaptious Kristen]

They'll say, five years from now, that Wal Mart pushed out all the small businesses. Which will be true-ish, but not in the way they think. It will be Wally World's support of high minimum wages that will destroy local business, not their low-low prices.

[sarcasmic]

It will be Wally World's support of high minimum wages that will destroy local business, not their low-low prices.

Or a combination.

[Invisible Finger]

The "victims" are the ones who keep voting these assholes into office.

[Jon Lester]

None of this will stop DC government from further raising prices for parking tickets, despite how burdensome that can be on low-income workers.

[Aresen]

Unintended consequences. How do they work?

[JWatts]

Math is hard.

[R C Dean]

Unintended consequences. How do they work?

In my experience, they generally work pretty much as predicted.

[Neoliberal Kochtopus]

I really don't give a blue fuck about these small businesses anymore. I mean, I do in a way, but you know, economists have been yelling about this for *centuries*, and people still don't get it, so I'll just embrace the worst things said about libertarians and say Yay Corporatism.

[Homple]

Economies of scale, how do they work?

[Swiss Servator, referendiffic!]

I dunno. I am still trying to figure out these fucking magnets!

/Insane Clown Posse

[Killaz]

They give thousands of independent operators and contractors a way to market their goods internationally, that's how they work.

[Jon Lester]

I'd love to help support my neighborhood hardware store more often, but when I find a roll of teflon tape on eBay for $2.38 with free shipping, knowing I'd have to burn gas and then pay $3-4 locally, I have to look out for myself first.

[Juice]

Another aficionado of that shirt:
http://imgur.com/wpE9LE2

[Sevo]

I still think the GOP ought to back a $50/hr minimum wage. The Dems would have to go for it.
In a year, the poor would be paying top marginal income tax and still not be able to afford a new Benz. Maybe people would learn.

[Brian D]

Bah, small potatoes. I say $1000/hr should be the new minimum wage. Yeah, everyone will be in the top tax bracket, but I'm sure there'll be enough money left over for them to live like the multi-millionaires they'll be!

Let me know when my Nobel Prize in Economics is ready.

[Jon Lester]

And then go for the Greens' idea of a 100% tax on all incomes over $100k. It would likely result in social disaster, but it would be an interesting experiment.

[CE]

50 bucks an hour? Cool -- everyone would be making 6 figures, prosperity would surely ensue.

[CE]

I shopped at Wal-Mart on Small Business Saturday. Am I evil?

[Gozer the Gozerian]

Yes, but only because you're human.

[rogerfgay]

A Conservative Guide to Sorting Out Wal-Mart Employees on Minimum Wage

http://rogerfgay.blogspot.se/2.....t-wal.html

[Aresen]

You just say that because your discount batlith broke.

[Neoliberal Kochtopus]

It's Bat'leth...

i'll see myself out

[Loki]

It's Bat'leth...

NEEEEEERRRRRRRDDDDDDD!!!!!!!!!