A Washington DC bill that aims to improve worker waged could have unintended consequences for thousands of city retail employees, economists claim. A new bill focused on providing a ‘living wage’ for DC retail employees has resulted in one of the city’s biggest employers – Wal-Mart – threatening to close new stores.
Wal-Mart plans to build three new stores in the DC area, many of which have been popular amongst the community. Now, the company claims that new legislation is likely to force it to reverse its plans and cancel building. Wal-Mart is also planning another three stores in the Greater DC Area, which it says will still go ahead.
Company representatives and economists alike claim that the new law will have a ‘chilling impact’ on business in the American capital, with a large range of DC area businesses having to make adjustments in order to stay competitive. The bill will increase DC’s minimum wage to $15 per hour from its current level of $8.25.
However, the increase will not be equitably shared amongst all of the city’s local businesses. Smaller companies will not be subject to wage increases – only select ‘big box’ retailers and large companies will need to pay their employees over 50 percent more than the designated minimum wage.
The threshold for the bill is $1 billion in annual retail sales, as well as an operating space of over 75,000 square feet. Retailers such as Wal-Mart have completed that the bill unfairly targets large companies. The bill does not require such strict wage increases for large corporations that employ unionised employees.
Given Wal-Mart’s reputation for ultra-low prices, the new legislation may affect both workers, employers, and consumers in the DC area. Campaigners for the legislation, however, claim that new retailers will likely take the place of Wal-Mart, should the company follow through on its threats.
