Wal-Mart may abandon planned D.C. stores over minimum-wage bill

WASHINGTON — Empty Budweiser beer cans, Arizona iced tea bottles and other debris litter the ground of a largely vacant strip mall in the Skyland neighborhood, an area federally designated as a “food desert” for its lack of grocery stores.

Skyland is part of the District of Columbia’s Ward 7, where a majority of residents are low-income African Americans and the unemployment rate is 13.9%. A few miles away, the affluent, mainly white Ward 3 has numerous grocery stores and a 2.1% jobless rate.

Wal-Mart Stores Inc. planned to open a 125,000-square-foot store here, anchoring an ambitious, $200-million residential and commercial development that Mayor Vincent Gray has long crusaded for as a means of turning around not just the neighborhood but the entire depressed area east of the polluted Anacostia River.

It was to be one of six new Wal-Mart stores in the District — until now.

The D.C. Council passed a bill requiring non-unionized, big-box retailers like Wal-Mart to pay workers $12.50 an hour, more than 50% higher than other companies.

Now the nation’s largest retailer is threatening to abandon three and possibly all six of its D.C. projects, forcing Gray to choose between the city’s powerful unions and his dreams of redeveloping Skyland and other poor areas in the city.

“It creates wage standards for a handful of employees while exempting two of the largest [employers] in the city, Safeway and Giant,” Wal-Mart spokesperson Steven Restivo said. “It’s discriminatory, arbitrary and discourages investment in D.C.”

Wal-Mart said the six D.C. stores would add 1,800 jobs.

Union leader Joslyn Williams, who has lobbied for the bill since 2007, called Wal-Mart’s response “outright blackmail.” The bill allows retailers to include benefits in the wages, which Williams said provides flexibility.

“They can afford it, and they’re worried about other cities saying, ‘You come in here, you ought to pay a living wage,’” said Williams, president of the AFL-CIO Metropolitan Washington Council. “But even $12.50 is not enough. It only gets you to $26,000 per year.”

Entry-level pay at area grocery chain Giant is close to the District’s current $8.25 minimum wage, plus negotiated benefits, according to Mike Wilson of Respect DC, a grass-roots coalition supporting the bill. Giant and most other large grocery stores in the District would be exempt from the higher wages because they are unionized.

If Gray decides to veto the bill, the council isn’t likely to have enough votes to overturn it. The council voted 8-5 to pass the local law.

Council member Yvette Alexander, who represents the Skyland neighborhood and the rest of Ward 7, had opposed the bill because she fears that it would drive retailers away.

“The premise was from a lot of anti-Wal-Mart activists and unions,” she said. “I think it was an effort to say, ‘Wal-Mart, we don’t want you in this District.’”

Alexander said she supports increasing the minimum wage for all employees in the District, not just large retailers, and said a veto from Gray would help bring housing, jobs, sit-down restaurants and other retail amenities “to a particular part of the city that needs it.”

“For Skyland, that’s going to be major, and will help the landscape to change,” she said.

Residents recognize that Wal-Mart provides jobs, affordable goods and tax revenue.

“That’s a lot of jobs for unemployed youth and people in the housing projects,” Skyland resident Eric Postell said. “Without Wal-Mart, the redevelopment project would sink.”

But council member Vincent Orange, who represents the entire city at-large, thinks the wage issue is the most important. He voted for the bill.

“We’re not going to allow you to pay poverty wages, while your employees are seeking food stamps, Medicaid and on other government subsidies,” he said. “The cost of living in urban markets is a lot higher than where [Wal-Mart’s] been doing business.”

Orange connected the D.C. bill with President Obama’s plans to raise the federal minimum wage to $9 an hour. He said the District’s high disposable income, ongoing redevelopment projects and influx of 1,000 residents a month makes it a “very attractive” market for large retailers.

“If Wal-Mart doesn’t make it to the nation’s capital, we’ll find other development projects and continue to work with residents,” he said.

Orange pointed out that those employed by contractors doing business with the local government also must receive a living wage.

marina.villeneuve@latimes.com