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Gray Veto Pleases Businesses, Inflames Others

Barrington M. Salmon | , James Wright | 9/18/2013, 8 a.m.
Mayor Vincent C. Gray vetoed a living wage bill Thursday that would have required Big Box retailers in the District ...
D.C. Mayor Vincent Gray’s veto could keep big-box stores like Target from raising the minimum wage. (Courtesy photo)

Gray said the bill would not improve the employment opportunities or wages for the vast majority of the workforce, adding that it would bring harm to residents and areas of the city most in need of jobs, economic development and amenities. He listed six things residents misunderstand about the bill including: it’s a job-killer; it’s not a true living wage bill; it would affect a larger number of retailers besides Wal-Mart, including Harris Teeter, Auto Zone, Macy’s and Walgreens; and it would kill economic development in underserved communities for a generation.

Pulitzer Prize-winning journalist and author David Cay Johnston castigated Gray and Wal-Mart.

“I’m not surprised [at the veto] because if you look at the whole history of this country, with railroads and canals, for example, the majority of politicians ended up siding with the powers-that-be,” said Johnston during an interview Friday. “Wal-Mart does not create jobs. All it does is move jobs from less efficient retailers to itself.”

Johnston said studies elsewhere in the U.S. reveal that when Wal-Mart sets up business, the true nature its effects on competitors and communities it serves becomes clear.

Wal-Mart will drive down the wages in the city and become a job destroyer, Johnston said. He said a new Wal-Mart on average will lead to the loss of 175 jobs as competing neighborhood businesses are driven out and as lower wages filter throughout local communities, which in turn lowers spending.

“Politicians need to stop saying Wal-Mart creates jobs,” he said. “Wal-Mart’s supposedly lower prices will come with people losing current jobs in retail. Wal-Mart will put pressure on other employers to hold down their wages.”

“If Wal-Mart succeeds in its current drive, all the grocery stores with union workers will go away because Wal-Mart, with its ability to pay lower wages and scale will drive them out. Bargaining power comes from unions – unions give bargaining power to workers. People want full-time jobs, but Wal-Mart knows how to work the rules to its benefit.”

In addition, said Johnston, a distinguished visiting lecturer at Syracuse University’s School of Law, the entire Wal-Mart model is based on corporate welfare. Taxpayers generally subsidize the building of stores and tax breaks and other incentives sweeten Wal-Mart’s pot.

“The run-of-the-mill person doesn’t get paid enough to afford health care,” he said. “Taxpayers are subsidizing this. Wal-Mart’s subtly sucking money out of the system and makes other people subsidize it. If this continues, you’ll see falling incomes in mass salaries and we’ll become Mexico. The Reaganista policies we’re following are making us more like Mexico. We’ll have oligarchs, a small servant class and 90 percent who are in bad shape. I’d rather be Canada not Mexico.”

The mayor said he listened to and conferred with hundreds of individuals and groups about the issues. The decision wasn’t an easy one but he said he acted in the best interests of the city.

“Something of this complexity and which involves this many people isn’t easy,” he said. “I could have signed and approved it, send it back unsigned or vetoed it. There was nothing for council to do with the first two options. I’m troubled that the [D.C] Council waited 50 days before the bill reached my desk.”