On Thursday, September 12, 2013, D.C. District Mayor Vincent Gray vetoed legislation that would have required big box retailers to pay a minimum wage of $12.50 an hour.  Mayor Gray’s veto ended a two month long discussion on the bill’s fate.  It also sets up a possible override by the D.C. Council, which passed the legislation to begin with.

 

In the bill, big box retailers are defined as having at least 75,000 square footage and $1 billion or more in corporate sales.  The bill would have required a “livable wage” as well as benefits be provided for by the retailers.  It also had an exemption for employers that collectively bargain with their employees.  It also gave retailers four years to comply if it were to become law.  The increase would have been 50 percent higher than the current $8.25 minimum wage inside the district.

The bill would raise the annual earnings of a full-time employee making the lowest legally permissible wage from about $17,000 to $26,000.

Also known as the Large Retailer Accountability Act, has created controversy with local leaders and started a new discussion on the low wages that many retailers pay their employees while benefiting from massive profits.

 

Gray, a Democrat, has been debating whether to pass or veto the legislation.  In recent weeks, however, he has been hinting that he would veto the legislation.  And when he would talk publicly of the bill in interviews, he would discuss arguments against the bill, but rarely acknowledged supporters point of view.

“The coalition of labor unions, city clergy and progressive political activists backing the bill have over the past six weeks canvassed neighborhoods and held media events in hopes of pressuring Gray into signing the bill. Walmart and other large retailers, they argued, could pay their workers better wages without significantly harming their bottom lines.”

The announcement of the veto came in a letter to D.C. Council Chairman Phil Mendelson.  It was delivered on Thursday morning, and explained his opposition to the bill.  He also stated that he wanted to “reasonable increase” in the minimum wage for all employees, and not just retailers.

In the letter, Gray said the bill was “not a true living-wage bill, because it would raise the minimum wage only for a small fraction of the District’s workforce.” He added the bill is a “job-killer,” citing threats from Walmart and other retailers that they will not locate to the city if the bill becomes law.

Mayor Gray went on to say, “If I were to sign this bill in to law, it would do nothing but hinder our ability to create jobs, drive away retailers, and set back on the path to prosperity for all.”

 

He also said, “While the intentions of its supporters were good, this bill is simply a woefully inadequate and flawed vehicle for achieving the goal we all share.”

Chairman Mendelson stated that he was “disappointed” with the Mayor’s decision, and that this is “not good for workers.”

 

Many of those against the bill stated that it targeted Walmart unfairly.  Supporters insisted that was not the case.

 

However, there was no denying the effect that the bill had on Walmart’s business plan.

In 2010, Walmart announced plans to build six retail locations in the coming years.  After the passage of the bill by the D.C. Council, Walmart shelved the plans until Mayor Gray ruled.

 

Walmart officials felt it unfairly targeted their company, by creating an uneven playing field, through the exemption of unionized retailers and square footage rule.

A day ahead of the bill’s final passage last month, Walmart told council members and the public that it would abandon plans for three of the six storesand explore options for withdrawing from the others should legislators proceed. The ultimatum changed no votes on the council.

After the bill passed, Walmart threatened to drop the plans for three of its six stores, depending on what Mayor Gray decided to do.  Walmart claimed that the new required minimum wage was simply too much.

Walmart spokesman Steven Restivo called the veto “good news for D.C. residents,” and that Mayor Gray chose, “jobs, economic development and common sense over special interests.”

 

Mr. Restivo went on to say that they would continue with their plans, stating “We look forward to finishing the work we started in the city almost three years ago.”

 

However, the special interest in this case, was Walmart.  And Mayor Gray had a personal stake in Walmart’s success.

WalMart’s entry into the city was an early political coup for Gray, and he personally lobbied — some say threatened — top company executives to commit to a store at the Skyland Town Center development not far from Gray’s home in Ward 7.

All hope may not be lost for the bill, however.  The D.C. Council has 30 days to take a vote to override the veto.  An override would require 9 of the 13 members to vote in favor of an override.  When the legislation originally passed the Council, it garnered 8 votes.

 

Mr. Mendelson told his colleagues a vote to override will take place on Tuesday, the Council’s first legislative meeting since the bills final passage in July.

If the council fails to override the veto, Restivo said, “all stores are back on.”

 

Video

Here is a guy, in a hat, with animal ears, explaining the Mayor Gray veto.