Wal-Mart Says It Will Ditch Store Expansion After D.C. 'Living Wage' Vote

The D.C. Council approved the Large Retailer Accountability Act on Wednesday.

July 10, 2013, 4:56 PM
PHOTO: A woman shops at a Wal-Mart store in Alexandria, Virginia,  Nov. 14, 2012.
A woman shops at a Wal-Mart store in Alexandria, Virginia, Nov. 14, 2012.
Andrew Harrer/Bloomberg/Getty Images

July 10, 2013 — -- Wal-Mart said it will halt plans for three stores in the nation's capitol after the D.C. Council approved a bill that boosts minimum wages paid by large retailers by nearly $5 a hour.

"Nothing has changed from our perspective: we will not pursue Skyland, Capitol Gateway and New York Avenue and will start to review the financial and legal implications on the three stores already under construction," said Steven Restivo, spokesman for Wal-Mart, after the Council approved the vote on Wednesday afternoon. "This was a difficult decision for us - and unfortunate news for most D.C. residents - but the Council has forced our hand."

Restivo told ABC News the company would reconsider if Mayor Vincent Gray vetoes the bill. Mayor Gray has 10 days to sign the bill, veto it or let it pass without his signature.

The so-called "living wage" through the council's Large Retailer Accountability Act (LRAA) was one of many issues in the council's long agenda on Wednesday.

The council members debated the merits of the act, including whether the bill was unfairly targeting Wal-Mart.

Councilmember Phil Mendelson, who supported the bill, said the bill was not intended to place a spotlight on Wal-Mart, but through the company's public statements, "Wal-mart has made this a Walmart bill."

Alex Barron, a regional general manager for Wal-Mart U.S., wrote an op-ed in the Washington Post on Tuesday with the title, "Wal-Mart: The D.C. Council has forced our hand."

"For almost three years, Wal-Mart has worked on a plan to bring new stores to Washington, and we are close to opening our first location in the city," Barron wrote in the two-page op-ed. "Unfortunately, the District may soon adopt legislation that discriminates against business and threatens to undo all that we have accomplished together."

The op-ed made it clear what Wal-Mart would do if the law is passed.

"As a result, Wal-Mart will not pursue stores at Skyland, Capitol Gateway or New York Avenue if the LRAA is passed," Barron wrote on Tuesday. "What's more, passage would also jeopardize the three stores already under construction, as we would thoroughly review the financial and legal implications of the bill on those projects."

The LRAA forces big-box stores like Wal-Mart to pay workers at least $12.50 an hour. The city's minimum wage is $8.25. In the U.S., the average wage for a full-time hourly Wal-Mart associate is $12.57, according to the company. That's about $25,000 a year at 40 hours a week, or just above the federal poverty level of $23,050 for a family of four. But many part-time workers at the company make little more than the minimum wage.

On Wednesday afternoon, Councilmember Vincent Orange repeatedly urged his colleagues to "Stay strong," saying the city should not condone "poverty wages."

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Wal-Mart, the largest private employer in the country, is claiming the D.C. Council played "bait-and-switch." Three of Wal-Mart's six planned stores in Washington, D.C. are under construction, "with the first two expected to open this fall," Barron wrote in the op-ed.

"But despite the consensus among D.C. stakeholders about the economic value that our stores would bring, some members of the D.C. Council are advancing an eleventh-hour effort to try to undermine our efforts and change the way businesses like Wal-Mart must operate in the city," Barron wrote. "New legislation — the Large Retailer Accountability Act (LRAA) — would require that a few large employers pay a starting rate that is more than $5 per hour above the minimum wage."

When Walmart decided to open stores in D.C., announcing in November 2010 the initial stage of its plans, the retailer said it was committed to understanding the communities where it hopes to do business. The company has previously said it has participated in more than 200 community meetings and documented its commitment to "help stimulate economic development, expand access to affordable groceries and create quality jobs in the city."