Only $26,000 per year!
Last week, my colleagues and I took up the Large Retailer Accountability Act (LRAA), which requires all District retailers whose parent companies make at least $1 billion in sales to pay their employees a minimum of $12.50 per hour — $4.25 above the current District minimum wage. After much deliberation, I supported this legislation and it passed the Council and is now waiting for the Mayor’s signature.
The District of Columbia has seen immense growth and development over the last 10 years. Much of the growth has been possible because of government subsidies, incentives and partnerships with developers and retailers. As a result, the city’s strong economy and growing population has become attractive to national businesses. We certainly have more work to do; however, the District of Columbia is in a strong bargaining position to attract quality jobs and quality opportunities for District residents.
We must balance the interest of attracting large retailers to our less developed Wards 5, 7 and 8, while also attracting quality jobs to support our residents and their families. The federal minimum wage has remained stagnant, while the numbers of low-wage jobs and temporary positions have increased. Under this legislation, a full-time employee of a larger retailer making the minimum would take home only around $26,000 annually. That is it; barely over the federal poverty line for a family of four. We can do better than this for our residents.
Wal-Mart made this the Wal-Mart bill with a concerted, expensive lobbying effort. Other large stores in the District like Costco, Home Depot, Target, and Macy’s would also have to abide by the law, but considering that Wal-Mart currently pays its workers 28 percent less on average than other larger retailers, I get why they have made this about them. Other communities around the country have fought Wal-Mart on wages, on benefits, on preserving local business. Almost every community has lost the fight — that is one method Wal-Mart has used to become the number one grossing company on the Fortune 500 list again in 2013.
Wal-Mart employs more people than any other company in the United States outside of the federal government, yet the majority of its employees with children live below the poverty line. According to the company, Wal-Mart pays its full-time, associates an average of $12.67 per hour. But with an increased reliance on temporary hiresabout a third of its employees work less than 28 hours per week. Entry associates typically start near minimum wage, and have the potential to earn raises of 20 to 40 cents an hour through incremental promotions. A perfect review on your annual performance evaluation will get you an increase of 60 cents. As a result, an entry-level associate (earning $8.25 per hour) who “exceeds expectations,” and gets one promotion, is likely to earn only $10.90 per hour after five years of service.
Sadly, that is what our residents have to look forward to if the LRAA is not signed into law. I believe that the long-term effect of six Wal-Marts in D.C. would perpetuate a system of poverty that traps our poorest residents in low-paying jobs, with little hope for advancement.
I, along with the seven other Councilmembers who voted in favor of the LRAA, am asking that we treat our residents better. According to a 2012 report by the non-partisan think tank, Demos, raising wage standards to the equivalent of $25,000 per year for full-time retail workers would lift 734,075 people out of poverty, increase the GDP by billions, and create 100,000 to 132,000 additional jobs. Having saturated many suburban and rural areas, Wal-Mart has long had its eyes on our great city as part of its larger effort to expand into highly populated urban areas. Rather than continue its habit of paying low wages, Wal-Mart could use its position of influence as one of the nation’s largest retailers to drive up wages and spur job creation in the District.
If Wal-Mart chooses not to go forward with its three remaining stores, I would not be upset. In fact, we should really be asking ourselves if our city can even support six stores, all of which are about 15 minutes or less from each other.
This presents an opportunity for the city to become more creative in its efforts to spur more development in our Wards east of the river. For example, why not recruit Trader Joe’s, a company that pays its entry-level crew members, $10 to $12, for Skyland? Not only would it provide residents in that neighborhood with a high-quality grocery option, but also lure residents who faithfully travel into Arlington and Alexandria to make the journey to a popular brand. I am willing to invest D.C. tax dollars to support such an effort – if we can show the area can support the investment. If Ward 7 needs other investments to entice businesses, we have a host of solutions we can try from improving safety to fixing blight. That is our role as a government in an economically powerful city.
I will continue to work along with my colleagues at the Council, to better ensure that D.C. residents have greater opportunities to earn a living wage. Retailers and companies like Costco Wholesale and the grocery store chain Trader Joe’s, are proving that the decision to offer low wages is a choice, not an economic necessity.