The D.C. Council on Wednesday gave final approval to a bill that would raise by 50 percent the minimum wage that certain large retailers would be required to pay, setting up a showdown with Wal-Mart officials who have threatened to alter their plans for six stores in the District if the measure passed.
The 8-5 vote to require a “living wage” of $12.50 per hour now heads to the desk of Mayor Vincent C. Gray, who warned legislators earlier in the day to act thoughtfully on the measure. After the vote, Mr. Gray’s office issued a cautious statement.
“The Mayor has already indicated his serious concerns over the lost jobs and retail opportunities for District residents that the bill will cause,” spokesman Pedro Ribeiro said. “As he waits for the Council to send the legislation to him, he’ll be interested to hear what District residents and employers think.”
Wal-Mart officials on Tuesday pledged to abandon plans for stores at the Skyland Town Center and Capitol Gateway in Ward 7 and the Ward 5 store at New York Avenue and Bladensburg Road in Northeast. Three stores are already under construction, but Wal-Mart Stores Inc. said even plans for those could be altered if the Large Retailer Accountability Act, is enacted.
“Nothing has changed from our perspective: we will not pursue Skyland, Capitol Gateway, and New York Avenue and will start to review the financial and legal implications on the three stores already under construction,” Wal-Mart spokesman Steven Restivo said in a statement. “This was a difficult decision for us — and unfortunate news for most D.C. residents — but the Council has forced our hand.”
The Chicago City Council approved a similar bill seven years ago, but it was vetoed by then-mayor Richard M. Daley. Joe Moore, the city alderman who sponsored the bill, said Wal-Mart made “the same kind of threats” about refusing to open stores in the city when the legislation was being considered.
Wal-Mart ultimately opened several stores in Chicago.
New York state raised its minimum wage in March but only after agreeing to provide tax subsidies to stores that hire seasonal workers, including Wal-Mart.
While some cities, including San Francisco and Santa Fe, N.M., have approved across-the-board minimum-wage hikes, the bill would make the District the first city to single out big-box retailers.
The D.C. requirement for the higher wage doesn’t apply to Wal-Mart alone, instead specifying retailers with stores larger than 75,000 square feet and parent companies grossing at least $1 billion per year. But it grants four-year exemptions to large retailers currently operating in the city, meaning that it essentially would target Wal-Mart.
Mr. Gray has said he would prefer for the council to discuss raising the city’s minimum wage of $8.25 rather than singling out major retail chains.
Two of the stores Wal-Mart says are imperiled by the measure are located in majority-black communities east of the Anacostia River, where Mr. Gray lives and where unemployment is much higher than in the rest of the city.
Supporters on the council, who came one vote short of the nine votes needed to override a potential mayoral veto, appeared confident in their negotiating power with Wal-Mart, which city officials wooed for years.
Vincent B. Orange, at-large Democrat and sponsor of the bill, confidently said the District was “at a point where we don’t need retailers, retailers need us.”
“They want what we have,” he added. “Before, we wanted what they have.”
The council’s decision triggered a wave of reaction through the city.
Barbara Lang, president and CEO of the D.C. Chamber of Commerce, called the decision disappointing and hurtful to the local business environment.
“This continues a trend of unfriendly business decisions by our DC Council,” she said in a statement. “This sends a clear message to other businesses that may be considering development projects in the District of Columbia that they are not welcomed.”
Seeming to anticipate the reaction from the business community, Jack Evans, Ward 2 Democrat who voted in favor of the bill, said he welcomed any retailer to the city.
“I’m not one of those people trying to kick you out,” said Mr. Evans, a candidate for mayor. “I will sit down with you or any other retailer … who wants to come to our city and feels this law is an impediment, and work something out with you to get you here.”
The National Retail Federation called the bill “flawed and unwarranted” and a “prime example of why the District is consistently ranked as one of the worst places to do business in the nation.”
“Retailers, both large and small, create rewarding job and career opportunities for many District residents, provide goods and services for all neighborhoods and communities and spur economic growth and revitalization,” federation spokesman David French said.
Tommy Wells, Ward 6 Democrat and mayoral candidate, said he voted against a bill he would normally support because of the promise of jobs and affordable goods.
“The fact is, large retailers do bring lower-cost goods,” Mr. Wells said. “A living wage bill would be a different bill, but not this bill. That’s why I will not support it. I do not believe it is in the best interest of those who need jobs in the District and those who need affordable goods.”
⦁ This article is based in part on wire service reports.