Wal-Mart threatens closures of three stores in D.C. over 'living wage' law
Tactic nothing new with world's largest retailer; seen as discouraging
Wal-Mart, the world's largest retailer delivered an ultimatum to District lawmakers saying that they had less than 24 hours before a decisive vote. The firm threatened the closure of at least three planned Wal-Marts if a super-minimum-wage proposal becomes law. Coming a day ahead of a decisive D.C. Council vote on bill that would raise the minimum wage to $12.50 an hour, the tactic on the part of Wal-Mart is a familiar one.
The hardball tactics have been used time and again by Wal-Mart. The retailer has previously used its leverage in the form of jobs and low-priced goods to fend off legislation.
Elected officials in the Wilson Building found their usually pro-union political sentiments in conflict with their desire to bring amenities to underserved neighborhoods.
Mayor Vincent C. Gray called Wal-Mart's move "immensely discouraging," indicating that he may consider vetoing the bill while pondering whether to seek reelection.
The bill requires retailers with corporate sales of $1 billion or more and operating in spaces 75,000 square feet or larger to pay their employees no less than $12.50 an hour. The city's current minimum wage is $8.25.
The bill applies to some other retailers such as Home Depot, Costco and Macy's. However, a grandfather period and an exception for those with unionized workforces made it clear that the bill targets Wal-Mart, which has said it would open six stores, employing up to 1,800 people.
Alex Barron, a regional general manager for Wal-Mart U.S., wrote in a Washington Post op-ed piece that the proposed wage requirement "would clearly inject unforeseen costs into the equation that will create an uneven playing field and challenge the fiscal health of our planned D.C. stores."
Wal-Mart "will not pursue" stores at three locations where construction has yet to begin - two in Ward 7 and one in Ward 5, according to Barron, adding that the legislation, if passed, will also jeopardize the three stores underway. While precise terms of its agreements with developers are unknown, the company's leases could be difficult to break without major financial penalties.
A community affairs executive told a local business group last month that the three stores yet to be built could be in doubt. A company spokesman later warned of "negative consequences" should the bill become law.
Seven years ago, Wal-Mart employed a similar tactic when the Chicago City Council passed a similar "living-wage" measure.
The company indicated then that the bill would cause it to scale back or entirely scrap its plans to open several stores. Mayor Richard M. Daley vetoed the bill, and the council failed to override it.
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