Wal-Mart says it will pull out of D.C. plans should city mandate ‘living wage’

[HarveyDarkey]

Wal-Mart says it will pull out of D.C. plans should city mandate ‘living wage’

The world’s largest retailer delivered an ultimatum to District lawmakers Tuesday, telling them less than 24 hours before a decisive vote that at least three planned Wal-Marts will not open in the city if a super-minimum-wage proposal becomes law.

A team of Wal-Mart officials and lobbyists, including a high-level executive from the mega- retailer’s Arkansas headquarters, walked the halls of the John A. Wilson Building on Tuesday afternoon, delivering the news to D.C. Council members.

The company’s hardball tactics come out of a well-worn playbook that involves successfully using Wal-Mart’s leverage in the form of jobs and low-priced goods to fend off legislation and regulation that could cut into its profits and set precedent in other potential markets. In the Wilson Building, elected officials have found their reliable liberal, pro-union political sentiments in conflict with their desire to bring amenities to underserved neighborhoods.

Mayor Vincent C. Gray (D) called Wal-Mart’s move “immensely discouraging,” indicating that he may consider vetoing the bill while pondering whether to seek reelection.

The D.C. Council bill would require 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 minimum wage is $8.25.

http://www.washingtonpost.com/local/dc-politics/wal-mart-says-it-will-pull-out-of-dc-plans-should-city-mandate-living-wage/2013/07/09/4fa7e710-e8d0-11e2-a301-ea5a8116d211_story.html

[daleanime]

1. Let's see them use that.....

in a 'Real Walmart' commercial.

[Stargazer09]

2. Okay

Sounds like a very good reason to pass the mandate.

[RedCappedBandit]

3. Not seeing how that's a threat. LOL.

[Ilsa]

4. Make it so.

Let us begin the race to the top instead of the bottom. Do it, and watch DC prosper. Then other states with smart leadership can follow through until WalMart is operating only in the armpits of the country, or everyone has a living wage.

[Yo_Mama]

5. But they aren't changing minimum wage

Basically the law as structured would only affect Walmart and possibly another couple of large retailers.

I kind of agree with your basic point here - if everyone was getting a minimum wage of at least $12.50, we would probably initially lose some jobs, but eventually stores like Walmart would do better. But that's not what the DC legislation does.

[Ilsa]

6. I wonder if smaller employers would

eventually follow in order to get best employees?

[Yo_Mama]

7. I think it's more cost-driven

Because profit margins at a lot of businesses are pretty low, raising wages in employee-intensive retail can only be done if you are not competing on costs.

But we are in a downward spiral on incomes, and that downward spiral hurts retail chains very materially. One of the benefits of higher minimum wages is that it imposes a level bottom to the playing floor. Lower-profit margin businesses have to raise costs, but their competitors do too.

If you are running a company in which your profit per employee is below 2K a year, you can't afford to raise the average wage that much without raising prices. And if you are the only one raising prices, other competitors probably will not follow suit and then you may quickly lose sales to them.

[badtoworse]

8. Don't confuse us with logic

[Harmony Blue]

9. In theory yes but in reality it isn't true

Costco pound for pound does better than Sam's club and they pay their workers a lot more than what Sam's club offers.. And Publix also pays better wages for their workers than Walmart, which is why they are #1 in Florida.

[Yo_Mama]

14. Yes, but look at profit or sales per employee

There's a lot of favorable things which can be said about Costco's management philosophy and about the benefits of its employee policies:
http://www.d.umn.edu/~epeters5/Cst1201/Articles/The%20Costco%20Challenge.htm

But the reality is that if Walmart upped wages to near Costco levels, it wouldn't see the same results. Costco deliberately orients its stores to higher-end customers who can spend a lot more, and it really makes most of its profit off memebership sales.

Walmart is locked into the low-margin business for mostly poorer customers, and it makes its money off profit margin of goods sold. I wouldn't pay a membership fee to be able to shop in Walmart and neither would you, I'm guessing. That's why the article I linked compares to Sam's, not Walmarts.
http://www.slate.com/articles/business/moneybox/2008/06/wage_against_the_machine.html



Costco's average customer income was reported last year as 96K. I think anyone who has ever been in a Walmart knows there is a huge difference. Walmart's average customer income varies from 60K to 30K, depending on the market. Nationally it is below the average income.

I think that Walmart would materially benefit from a higher national minimum wage, but I don't think it can afford to raise wages that much on its own. Walmart is a low-efficiency, high structural cost business because of its model. It has tried to get around that by building smaller stores now. Its attempt to break into the higher income brackets with better branding have failed, and now it is left competing for sales with customers without a whole lot of discretionary income.

[Myrina]

19. To be fair, you should use Sam's Club vs. Costco ...

... more of a similar model.

[Yo_Mama]

20. Yes, that's true

But the poster is talking about Walmart stores, not Sam's Club stores.

Sam's Club stores do pay more than Walmart, but the economics of membership discounters are just different from those of department stores.

I'm irritated by having to make this argument, because I do believe that Walmart's employee policies are hurting their bottom line and that they could do better by paying better and shooting for better retention/service. But I can't make that argument by comparing Walmart with Costco, due to the differences in business models/customer base.

[Matariki]

10. SIX Walmart heirs have as much money as nearly half the rest of us.

There should be laws against that kind of inequity. Or maybe they can just choke on their greed.

http://www.huffingtonpost.com/waltons-net-worth_n_1680642.html

[Apophis]

11. I hope DC does the right thing and lets them go.

People need a living wage.

[sakabatou]

12. "Our workers shall be our serfs!"

[alcibiades_mystery]

13. I have an idea

FUCK YOU, Walmart.

That's it. That's my whole plan.

[Kingofalldems]

15. Excellent news.

[Ruby the Liberal]

16. Please let this pass.

Fuck Walmart.

[Volaris]

17. To steal a quote from the film Tombstone...

'Well...Bye."

[Myrina]

18. Lucky for DC! Wish it would take hold elsewhere!!

If that's the krytonpite for the evil Walton empire, let's use it!