D.C. Mayor Vincent Gray vetoes ‘living wage’ bill with nod to Wal-Mart

Council override vote expected to fail

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Mayor Vincent C. Gray on Thursday vetoed a bill that would raise the minimum wage at many large retail stores, setting up a crucial vote next week in the D.C. Council where proponents of the bill do not appear to have the support to override it.

The decision, if it stands, means Wal-Mart will continue to build six stores slated for the District — a victory for the retailer that has experienced workforce unrest over wages as it attempts to expand into urban areas across the country.

Announcing his veto decision, Mr. Gray called the bill a “job killer” and stressed that other retailers, not just Wal-Mart, made it clear to him that if the bill passed they would reconsider expanding in the city. He said he plans to support an overall increase to the minimum wage and hopes the debate stirred by the so-called “living wage” legislation can lead to an agreement.

The mayor said in a statement that he vetoed the Large Retailer Accountability Act “precisely because I believe in providing a living wage to as many District residents as possible — and this bill is not a true living-wage measure.”

“While the intentions of its supporters were good, this bill is simply a woefully inadequate and flawed vehicle for achieving the goal we all share,” he said.

The mayor vetoed the bill nearly 60 days after the it was approved by a divided council on an 8-5 vote. An override of the veto would require nine votes, but it seemed unlikely Thursday that any of the five members who voted against the bill are willing to change sides. D.C. Council Chairman Phil Mendelson, a Democrat, has scheduled the override vote for the council’s next full meeting Tuesday.

The bill specifically applies to businesses without union labor that occupy in excess of 75,000 square feet and whose parent companies gross $1 billion or more. It would force those retailers to provide pay and benefits worth $12.50 an hour — a so-called “living wage” for workers. The current minimum wage is $8.25 an hour.

The measure has been associated most closely with Wal-Mart, but other large retailers that are doing business in the city and meet its specifications would be subject to its provisions and would have to pay the higher wages after four years.

Critics voiced concern that it could jeopardize job growth if retailers were forced to pay higher wages. Mr. Gray said more than 4,000 jobs — including those from prospective retailers such as Lowe’s and Wegmans — were in jeopardy if the bill passes.

Wal-Mart threatened to abandon plans for three stores and possibly pull out of three others under construction if the bill passed. The stores are projected to bring about 1,800 jobs to the District.

A Wal-Mart spokesman said that with the “discriminatory legislation is behind us,” the corporation will move forward with all six of its stores — downplaying any possibility of an override by the council.

“Given all the criticism the bill has received locally and nationally, it would only make sense that a few of the original supporters change their vote,” Wal-Mart spokesman Steven Restivo said.

Council members Yvette M. Alexander, Ward 7 Democrat; Muriel Bowser, Ward 4 Democrat; David A. Catania, at-large independent; Mary M. Cheh, Ward 3 Democrat; and Tommy Wells, Ward 6 Democrat, voted against the bill. Mr. Wells plans next week to introduce legislation that would raise the city’s overall minimum wage over the next two years to $10.25 an hour plus increases after that to take into account the cost of urban living.

The standoff put the mayor in a tough spot because he is considered an ally of labor unions but also enticed Wal-Mart Stores Inc. to build the stores — including two in Ward 7, where he lives.

Wal-Mart officials have said their jobs are particularly valuable in inner cities, where unemployment is often at double-digit levels and many young people are seeking first-time employment. The company announced its campaign to enter urban markets several years ago as it was experiencing a slump during the recession.

The chain has opened stores in some of nation’s largest cities, including Baltimore, Chicago, Houston, Philadelphia, Atlanta and Las Vegas. Noticeably absent from the list, however, is New York, where union resistance to Wal-Mart wage levels is intense like it is in the District.

Worker advocates who supported the bill were disappointed by the veto and said they would lobby council members to change their votes.

Sarita Gupta, executive director of Jobs with Justice and American Rights at Work, said the District “deserves better than employers who don’t respect the community.”

Mr. Gray said after Tuesday’s vote, regardless of the outcome, that he would like to continue talking with businesses, residents and worker advocates about legislation to increase the minimum wage for all.

“I don’t know if there are lot of people who would make the argument that, given the minimum wage hasn’t changed in a very long time, that this shouldn’t be considered,” he said. “I think the issue is more likely to be considered to what end.”

It’s unclear to what end Wal-Mart and other retailers would support or fight an overall increase to the minimum wage amid national efforts, both locally and federally, for better pay for workers.

If the “living wage” bill had passed, it would have been the first in the nation to impose higher wages on large retailers.

In Chicago, Wal-Mart — still the world’s largest and by far the biggest employer in the United States — won a standoff in 2006 with powerful labor unions and their allies and succeeded in building nine stores unencumbered by such wage legislation. Richard Daley, Chicago’s mayor at the time, vetoed a “living wage” bill passed by the council similar to the one in the District, enabling the retailer to start wages a little more than $8 an hour rather than the $12 mandated by the legislation.

Asked whether he plans to shop at the stores close to home once they eventually open, Mr. Gray said he would.

“I go to Safeway a lot. I go to Giant. I go to Costco. So I would expect to shop in a Wal-Mart with the same regularity as the others,” he said.

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