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Last week, the D.C. Council approved a “super-minimum wage” that would require retailers with big corporate revenues and big stores — like Home Depot, Macy’s Costco and Walmart — to pay a higher hourly wage than many of their competitors. Real estate insiders say if Mayor Vincent Gray signs the bill, Walmart will likely halt plans to build three new District stores it hasn’t started yet, including one near the mayor’s home in Southeast Washington. Kojo explores the conundrum facing the mayor.
- Mike DeBonis Reporter, The Washington Post
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, Ralph Nader. He told us so, and he probably will be telling us so some more because we have asked him to join the first segment of our broadcast because of his interest in the minimum wage. What is this first segment to which I refer?
MR. KOJO NNAMDIWell, the D.C. Council last week tentatively approved a so-called super-minimum wage for large retailers. It would require stores like Wal-Mart, Costco and Home Depot to pay their workers $12.50 an hour, 50 percent higher than the District's regular minimum wage of 8.25. The question now is whether Mayor Vincent Gray will sign the bill. It's something local unions have been pushing for for several years, with the goal of helping workers earn a living wage so they can afford to do things like pay rent in the District.
MR. KOJO NNAMDIBut real estate insiders say if the bill becomes law, Wal-Mart is likely to pull out of three stores it's planning but has not started building, including one near and dear to the mayor's heart in his Southeast Washington neighborhood. Joining me to look at the politics of wages and Wal-Mart is Mike DeBonis. He's a reporter for The Washington Post. He joins me from studios of The Washington Post. Mike DeBonis, thank you for joining us.
MR. MIKE DEBONISHey, Kojo. Thanks for having me on.
NNAMDIAnd as I said, in studio is Ralph Nader, consumer advocate and political activist. His latest publication is titled "Told You So: The Big Book of Weekly Columns." Ralph Nader, thank you for joining us.
MR. RALPH NADERYou're welcome. Thank you, Kojo.
NNAMDIMike DeBonis, explain which retailers would have to pay this new super-minimum wage.
DEBONISUnder the bill that the Council voted on last week, the first of two votes, all retailers who have corporate sales -- meaning national corporate sales of $1 billion or more -- and operate in stores in the District that are 75,000 square feet or more would have to pay their employees a wage no less than 12.50 an hour. Now, that would apply to some stores that are already open in the city: Macy's, Home Depot, Best Buy.
DEBONISThose, under the language in the bill currently, they would have a four-year grandfather period to come into compliance. But if you are opening a store tomorrow, like Wal-Mart is planning to in the next few months, those would be immediately subject to the living wage requirement.
NNAMDIIf you'd like to join the conversation, call us at 800-433-8850. How do you feel about a so-called super-minimum wage of 12.50 an hour for big retailers like Wal-Mart, Home Depot, Macy's, Costco? 800-433-8850. You can send email to email@example.com. Mike, the politics. Who voted for this bill, and why did two of the councilmembers who are running for mayor oppose it?
DEBONISSentiment on the bill sort of broke down among -- on two lines. The, you know, the vote ended up being 8-to-5. The eight councilmembers who supported it, basically they said, listen, we believe that in a city with a rising cost of living, that we believe that these companies with this level of billion-dollar sales can afford to pay their entry-level employees a couple of dollars more an hour.
DEBONISAnd simply, we live in a city right now that's undergoing economic growth, that this is a desirable place for these retailers. They're going to come here regardless of whether we put this requirement in place or not. So we need to do this for our neediest residents, that that extra couple of dollars an hour can really make a difference between them surviving and not surviving and being able to stay and live in the city.
DEBONISOn the other hand, you had several councilmembers, particularly in parts of the city where there isn't a lot of retail -- there's no Wal-Marts, there's no Targets, there's no -- there's not even that many grocery stores -- saying, listen, anything that would make it more difficult for us to recruit retailers to come to our parts of the city to deliver the sorts of amenities that residents demand these days, rather than having our residents go out to Prince George's County or Alexandria to do their shopping at Target or Wal-Mart out there, we want to be able to have these retailers come into our wards.
DEBONISAnd if this makes it more difficult for us to do that, makes it more difficult for these retailers to make a decision to come and do business here, then I have to oppose this.
NNAMDIRalph Nader, how do you feel about this piece of legislation?
NADERWell, I think it's long overdue. Elizabeth Warren, the senator from Massachusetts, at a congressional hearing recently said that worker productivity's doubled since the 1960s, and if the workers absorb those gains, they would be making $22 an hour. The head of Wal-Mart makes $11,000 an hour, eight hours a day -- not counting benefits, Kojo -- and obviously Wal-Mart has enough money to pay their top management.
NADERThey just announced a 15 billion stock buyback, which will redound to the benefit of the Wal-Mart family that owns slightly over 50 percent of the stock of this giant, multinational company. Where does those $15 billion come from? They come from consumers and out of the hide of the workers. Washington, D.C., is a high-priced area. Rents are very high, people have to live, and it's a legislation long overdue.
NADERHaving said that, let's be very clear that Wal-Mart's opposition to this has very little to do with the three stores that they still haven't decided they were going to open because if the District raises the minimum wage for Wal-Mart-type stores to 12.50, it's going to embarrass Wal-Mart all over the country, a company that has pursued a low-wage policy, hires people for as low as $7.25, which is the federal minimum wage in some state, and has 1 million workers -- Wal-Mart does -- who make less today than workers made in 1968 at Wal-Mart for inflation adjusted.
NADERSo the minimum wage in 1968 -- even before you got underway in radio, Kojo -- is higher today, adjusted for inflation, than Wal-Mart workers, 1 million of them, are making at the present time. So that's the larger context. And since the District doesn't have any vote in Congress, it's good for it to take the lead. Wal-Mart is making money in Western Europe. They have to pay for four weeks paid vacation and a minimum wage that's around $12 in some of the Western countries. And...
NNAMDIAnd they manage to do it.
NADERAnd they manage to do it. They've managed to make money in Ontario for years. That's a $10.25. So it's time for workers to get a break. They have been abused in terms of their wages by these big companies, who flee the jurisdiction to communist and fascist regimes abroad with their jobs and industry. Their pensions have been shriveled in so many ways, as pointed out even by The Wall Street Journal.
NADERThey have been abused. It's time for workers to get a more living wage. And I might add, I had a talk with the chairman of Costco not long ago, and he told me that they start their workers at 11.15 an hour, plus wages -- plus benefits, rather. And for companies like that, they have four years under the District bill to adjust to a 12.50 minimum wage before deductions.
NNAMDIMike DeBonis, Wal-Mart has asked the mayor to veto this bill, but has not publicly said what it will do if he signs. Real estate insiders say Wal-Mart is likely to halt plans for the three new stores that have not begun construction yet, including one in Skyland Town Center in Southeast Washington, near the mayor's home.
NNAMDIAre the rumors that Wal-Mart would halt these projects credible? Or as Councilmember Vincent Orange says, look, the District has arrived. We don't have to beg people to come to the District anymore. If Wal-Mart threatens to abandon Skyland, Gray should call their bluff, Vincent Orange says.
DEBONISThe credibility of the threat sort of depends on where you sit, and I think Vincent Orange makes a tremendously good point, which is that, here in the District, we have a growing population, a booming economy and disposable income that people want to spend. That's absolutely true. And, you know, his position that if Wal-Mart doesn't come in, someone else will, that's a little more complicated, and it really depends on what part of the city you're talking about.
DEBONISI think that where we're seeing these stores built now, you know, the first three stores that are already under construction, those are in the western half of town. Those are in areas of the city where it's more of a slam dunk from a retailer's standpoint in terms of opening a store. The other three are in the eastern half of the city where traditionally there's been less retail period, where the elected officials have long sort of tried to induce these national retailers to come in and really haven't seen a lot of interest.
DEBONISSo it's -- you could very easily say that, yes, that statement might be true for one half of town, but not the other. And really right now, what you're seeing on a micro level, what the situation is, is, you know, if, say, there is some credibility to the suggestion that Wal-Mart could say, listen, if you guys want to do this bill, we're still going to build a store, but we're going to build it right across the border in Prince George's County where Rushern Baker would be happy to have us -- and he's -- you know, he's not going to be talking about a living wage bill.
DEBONISHe's got all sorts of development sites that we've got ready. So you're not only talking in the national context that Ralph so eloquently and completely described, but in this regional context, you have the sort of derby situation. And a lot of the elected officials here have made this calculation that it's more important to them and their constituencies...
DEBONIS...to have the amenities of a retail store rather than higher wages for the workers.
NNAMDISpeaking of calculations, Mike, what are the political calculations for Mayor Gray here?
DEBONISI think it's pretty simple for him. He's made a tremendously big deal out of encouraging development east of the river, particularly at Skyland Town Center, which is, you know, less than a mile from his home in Hillcrest. He's really moved heaven and Earth to try and get that Wal-Mart bill. And now, if they're going to come to him and say, Mr. Mayor, listen, it's this simple, if you don't veto this bill, we don't locate our store at Skyland, then that means the Skyland development will remain stalled for years. Additionally, it's going to be very difficult for him to say, I'm going to sign this bill.
NNAMDI800-433-8850. Should D.C. Mayor Vincent Gray sign the bill boosting the minimum wage for people who work at the Home Depot, Costco, Macy's, Wal-Mart? Give us a call, 800-433-8850. You can send email to firstname.lastname@example.org, or send us a tweet, @kojoshow. You can simply go to our website, kojoshow.org, join the conversation there.
NNAMDIRalph Nader, on the one hand, there's the argument that -- that's being made about Wal-Mart being able to go across the border to Prince George's County where it wouldn't have those kind of problems. And the argument is being made that if Wal-Mart doesn't come to neighborhoods like Skyland and Southeast Washington, maybe nobody else will.
NADERWell, that's interesting. I mean, we've reached a point in this country where Wal-Mart can hold jurisdictions hostage. I mean, Wal-Mart is in to make a profit, and they've been trying to get in the District for years, negotiated with Mayor Gray for a long time, because they see this as a tremendous market. Now, let's say Wal-Mart doesn't build in that area, in the eastern part.
NADERIn 1978, we got through Congress, under Jimmy Carter, a National Consumer Cooperative Bank. There are funds to establish cooperatives. They provide properties for housing around the country and other retail cooperatives. They also have a low-income development unit to the bank specializing in stores in low-income areas.
NADERSo why not avail the District of a bank that has its headquarters right in the District and start a consumer food cooperative of a large, well-appointed consumer food cooperative with the technical assistance and the loans of the National Cooperative Bank? Now, I've proposed this over the years, and there seems to be no resonance to it by the city council. But it hasn't been proposed for several years 'cause the occasion hasn't arisen again.
NADERBut there's no reason why we have to have Wal-Mart, a low-wage corporation with enormous profits and which tells its own suppliers if they can't meet the China price, they should close down in the U.S. and open up in China where the government knows how to keep workers in their place, why we should allow Wal-Mart to hold us hostage. They're going to build the three already. The question is the other three that are pending. So just propose Wal-Mart that they don't want to do it. There can be a nice consumer cooperative food retailer there.
NNAMDIHow did the council arrive at the $12.50 an hour a figure as the super-minimum wage, Mike? I heard Ralph Nader say that at Costco, it's $11.25 an hour?
NADER$11.50, when they start.
NNAMDI$11.50 an hour.
NADERThat's what they start. Yeah.
DEBONISRight. And I should say that that $12.50 figure, under the bill as it's currently written, you can offset that with your -- the benefits you offer. So Costco, if they're offering the equivalent of more than $1 an hour in benefits, they probably already comply. How it was calculated specifically, I'm not sure of the exact calculations.
DEBONISThis bill has been introduced several times in recent years, and the wage has been adjusted upward gradually each time. There's already a living wage defined in the city law for government contracts that has to be paid. And basically, it's calibrated to adjust for the fact that the District is a place with a tremendously high cost of living relative to the rest of the country, most parts of the rest of the country.
DEBONISAnd the ideas that you should be able to spend, you know, 30 percent of your income and get a decent place to live based on the housing prices in the city and pay for the rest of you daily needs in a reasonable manner. Now, is it more a science than an art? You know, I'm not the best person to speak to that. But the ideas that if you make $12.50 an hour, you can have a decent lifestyle here living as a District resident.
NADERNot to mention -- and we've told this to Wal-Mart representatives -- a lot of these workers, they're going to turn around and spend a lot of money right in Wal-Mart.
NNAMDIGo to -- we're going to be taking a short break.
NNAMDIBut I wanted to get in at least one caller here before we go, Rachel in Columbia Heights. Rachel, you're on the air. Go ahead, please.
RACHELHi. I was just listening to your show, and I wanted to call in as a resident who've lived here for 10 years, thinking about buying a property in the city. I'm one of a professional couple, and I wanted to say that I fully support a living wage in the city even it means that my goods potentially cost a little bit more.
NNAMDISo you're in support of the so-called super-minimum wage bill?
RACHELYes, very much so.
NNAMDIOK. Thank you very much your call. And let me try Gary in Washington 'cause he needs a clarification. Gary, your turn.
GARYA quick clarification and two issues. Is the component of the new bill a $1 billion in sales or 75,000 square feet or and/or 75,000 square feet?
DEBONISIt's and. It's both $1 billion in sales and 75,000 square feet.
NNAMDIWhat else, Gary?
GARYIf the Wal-Marts and the Best Buys and Targets in the District -- and I'm actually a seventh-generation Washingtonian, so I haven't entered in this -- fulfilled their obligation under this new bill and they hire the 15,000 or 12,000 people that they need to be at capacity, how is it doubly fair to all the other people who have the same cost of living issue in the District but are not able to achieve that wage because there are no additional jobs available?
NNAMDIAnd, of course, excluded from this are stores like Giant and Safeway. Mike DeBonis?
DEBONISRight. That's -- that is one of the parts of the political debate over this bill that's been really sort of rancorous is there's been -- the provisions of the bill have been very specifically tailored to affect Wal-Mart in a way that they don't affect some of their competitors, particularly Giant and Safeway, which have unionized workforces. There's an exception in the bill that if you have a unionized workforce, you're not subject to the bill.
DEBONISThe argument being that if you're sitting down for collective bargaining, you've -- there's -- the workers had had a say in what their rate wage is. And therefore, they don't need the protections of the super-minimum wage. But Wal-Mart has really, I think, objected to that. In all of their public statements, they've referenced that, and they feel like it's a sweetheart deal for the unionized -- for the unions and the unionized employers, and it's picking on Wal-Mart at their expense.
NNAMDIRalph Nader, you got the last word.
NADERNo. I don't see any persuasive reason for exempting Safeway and Giant just because they're unionized. I mean, you would think that a unionized large retailer would have reached $12.50 an hour some time ago. So I think that's the Achilles' heel of this legislation. And unfortunately, that's the way it was passed.
NNAMDIRalph Nader is going to continue to stay with us to discuss his new book, "Told You So: The Big Book of Weekly Columns." Mike DeBonis, thank you for joining us.
NNAMDIMike DeBonis is a reporter for The Washington Post. We're going to take a short break. When we come back, we'll talk to Ralph Nader about a variety of issues, his long stay in the District of Columbia and his view of the nation and the world. But you can start calling now, 800-433-8850, for that conversation or send email to email@example.com. I'm Kojo Nnamdi.
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