D.C. Council’s anti-Walmart living wage bill does more harm than good for city’s economy

The bill seemed to be specifically targeted at Wal-Mart, as it only affects stores within the district larger than 75,000 square feet with parent companies making more than $1 billion annually. The bill also granted specific four-year extensions to other similar stores in the area, according to The Washington Times.

Essentially, the Council is singling out Wal-Mart for stricter measures, prompting outrage from residents and economists. This type of targeting is unprecedented.

The Council told Wal-Mart that the measure was non-negotiable, despite the company’s threat to end six construction projects for new stores within the District. If Wal-Mart abandons its projects for these stores, thousands of possible jobs will disappear or move across the border to Maryland and Virginia.

The decision now lies with D.C. Mayor Vincent C. Gray (D), who is considering a veto of the Council’s bill. He says he wants to talk to other business leaders first to help him make the decision, according to the Times.

The legislative battle against Wal-mart is not an isolated incident, either. In 2006, the Maryland state legislature forced the company to spend more on health insurance for its workers. Though Walmart warned about the painful impact on growth, the law was ultimately overturned by an appeals court a year later.

Unsurprisingly, unions criticized the company after the ruling was overturned.

“The overwhelming majority of the public wants to require large profitable corporations to pay their fair share for health care,” said Paul Blank, campaign director for the Wake Up Wal-Mart campaign, told The New York Times after the ruling came down in 2007.

This growing anti-Walmart sentiment has worrying national implications. If governments continue trying to control businesses’ decisions, workers will take the hit. Increasing labor costs can cause companies to move elsewhere, which restricts job opportunities and raises prices for the less fortunate. Mandating a “living wage” may seem to make sense, but the policy hurts those it’s intended to help.

“Because low-skill workers will be more expensive to employ than they were before, the increase will cause many workers to have their hours cut and to lose their jobs,” Aparna Mathur and Michael R. Strain, scholars with the American Enterprise Institute, wrote in The Blaze last week.

Additionally, competition from Wal-Mart’s “always low prices” can have a powerful effect for low-income consumers living paycheck to paycheck. Dr. Charles North, an associate professor of economics at Baylor University, offered an enlightening perspective in his book “Good Intentions.”

“Wal-Mart’s prices affect more than just its customers’ pocketbooks. They also hold down prices across the entire U.S. economy,” he wrote.

Though DC’s “living wage” may sound like a compassionate plan to advocate, good intentions often have unintended consequences.