As politicians continue their surrogate decision-making in the lives of the underclass, Washington, D.C. city politics remain a laboratory for repeated public policy failures. The Washington, D.C. city council recently approved a measure that would create a living wage for workers in the city who are employed by large retailers. Sometimes, you have to wonder if the city’s leaders have considered the long-term consequences of decisions like this. D.C. Mayor Vincent C. Gray took about a week to decide whether to veto or sign the Large Retailer Accountability Act, according to the Washington Times. The newspaper explains what the city is up to:
Part of the Gray administration’s five-year plan to boost the number of jobs in the city includes creating a “retail-friendly environment” in the District. But retailers have argued that the bill the mayor is considering unfairly targets certain employers — specifically those 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 — but could potentially curtail retail expansion in the District as affected businesses that oppose the law locate elsewhere. The current minimum wage is $8.25 an hour.
The bill applies only to large retailers with stores of 75,000 square feet or larger with annual corporate sales of at least $1 billion. Stores like Target, Walmart, Home Depot, Toys-R-Us, and the like are the targets of this part of the legislation. Walmart has already threatened to dissolve plans to build three stores in D.C. if the law passes. Can you blame them? How can politicians accurately discern how much Walmart should pay a cashier or someone who stocks shelves? How do politicians know how much any single job should be worth at a large retailer?
If the city of Washington, D.C. wants better-paying jobs for low-skilled laborers, a better strategy might be to do whatever is necessary to recruit higher-wage industries to the city and for the city to increase education and aptitude standards so that young adults coming out of high school have the requisite skills to be trained for more competitive positions in the marketplace. The city, however, has decided to go the other direction and introduce “living-wage” disincentives that decrease job opportunities for lower-skilled workers as retailers decide to build elsewhere.
Walmart’s threat to scrap plans to build new stores that provide local residents with jobs and lower-priced products should serve as a signal to the D.C. city council about how the market works. If the measure is not vetoed by the mayor, we will painfully watch as large retailers set up shop in the suburbs and as job options for low-skilled city residents dwindle near their own neighborhoods. By the time that narrative plays out, the politicians will be ready to blame the coming “retail deserts” in urban locales on something else, like racism or classism, instead of on policies they put into place that make running stores near lower-income neighborhoods too expensive to make sense.