Update: In what I described last week on CD as an “economic death wish,” the Washington DC city council recently voted in favor of a “living wage” ordinance that would impose a super-minimum-wage of $12.50 per hour on Wal-Mart, which is planning to open six new stores in the District (three are already under construction). A final vote takes place today, and Wal-Mart announced yesterday that it will not start construction to open stores at three of the planned inner-city locations if the ordinance passes and is not vetoed by Mayor Vincent Gray. The retailer is also considering its options on the three stores that are already under construction, saying that it will review the “financial and legal implications” before deciding whether to possibly stop construction on those stores if the “super-minimum-wage ordinance targeted at Wal-Mart passes.
At the Antiplanner blog (“dedicated to ending government land-use regulation, comprehensive planning, and transportation boondoggles”), a post titled “Job-Killing Living Wages” makes some great points about the DC Wal-Mart situation:
The left excuses this discrimination [against Wal-Mart] by calling it a “living wage” ordinance. But why is it that only employees of Wal-Mart, and not employees of smaller retail shops, supermarkets, restaurants, or other businesses?
Ironically, over the last decade three successive Washington DC mayors worked hard to attract Wal-Mart to build stores in inner-city neighborhoods. Wal-Mart was reluctant to build in those areas due to crime, but finally agreed to open six stores in the district. “We’ve been praying for food in this neighborhood for about 40 years,” said the resident of one neighborhood where Wal-Mart was planning to build.
Residents of this and other neighborhoods would not only benefit from Wal-Mart’s low prices but also from the hundreds of jobs that each store would require. Certainly $12.50 an hour is more than $8.25, but $12.50 times zero jobs is a lot less than $8.25 times 600 jobs. Not surprisingly, Wal-Mart is now threatening to abandon at least three if not all six of the stores it was planning to build in the city.’
These policies set the standards all wrong. The only valid way of judging Wal-Marts and other major retailers is from the point of view of consumers, not employees and certainly not their competitors. People who don’t like Wal-Mart should just not shop there, and people who think Wal-Mart doesn’t pay enough should just not work there. Otherwise, they should get out of the way and let others make their own decisions.
MP: French economist Frederic Bastiat wrote almost two hundred years ago in the early 1800s that “It is necessary to view economics from the viewpoint of the consumer. All economic phenomena must be judged by the advantages and disadvantages they bring to the consumer.” If we apply that profound, timeless economic insight to the DC situation today and consider the significant economic benefits that six Wal-Mart stores will bring to inner-city DC residents (everyday low prices for groceries, clothing, household and other consumer goods, $4 drug prescriptions, etc.), in addition to creating 1,800 new retail jobs and 600 construction jobs for workers, it would really be a politically-motivated “economic death wish” for the DC city council and mayor to drive Wal-Mart away from the District. We’ll find out later today whether DC politicians care more about politics or more about the economic well-being of the residents they have been elected to represent.
Update: D.C. Council moved forward with its “economic death wish” and approved the job-killing, economic development-suffocating, “living wage” bill yesterday.