DC Council Kills the Goose

Posted on July 12, 2013

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Or, How the DC Council is Shooting its Poorest Residents in the Foot.  Hey, what do they care?  It’s not their foot.

If you have not heard the story of The Goose that Laid the Golden Eggs, here is the Cliffs Notes version:  Once upon a time, there was a dumbass who owned a wonderful goose which laid a golden egg every day.  The dumbass, being impatient and greedy, killed the goose and cut it open in an attempt to get at the source of the gold, but there was nothing extraordinary about the goose’s innards.  Enjoy your goose dinner, punk, ’cause there ain’t no more golden eggs coming from there (heavily paraphrased from Aesop).

If that punk had a name, it would be:  the Washington, DC City Council.  The goose in question is Wal-Mart, or more specifically, a deal negotiated to bring six Wal-Marts into the District (currently there are none).  After several years of negotiations and preparation, there were six stores slated to open in the District between this autumn and 2015; currently they are in various stages of planning and construction.

But then the City Council had to go and pass a new law, “The Large Retailer Accountability Act,” or LRAA.  This would bump the minimum wage for large retailers up to $12.50 per hour, a whopping 50% premium over the District’s established minimum wage of $8.25 per hour.  Wal-Mart, unsurprisingly, sees this as a bait-and-switch tactic.  Citing the resulting “unforeseen costs” to running stores which are expected to show some of their lowest profit margins, the retailer is threatening to pull out of the District as a result; at least, out of the three locations that are in the earliest stages of their planning.  This could end up costing the District as many as 1800 much-needed jobs, not to mention a much-needed source of inexpensive goods and much-needed groceries.  You see, the poorest areas of the District are not just “food deserts”; they are retail deserts.

Some chirpy, bright-eyed observers, like Kevin Roose writing for NewYork Magazine, opine that Wal-Mart’s retreat in the face of the LRAA is a “victory,” and that the District “won its fight” with Wal-Mart:  “…those jobs were likely to be barely subsistence-wage, terribly depressing, and offset with jobs lost at local businesses…   they made a brave, values-driven decision about what kinds of jobs they wanted in D.C. and set policy accordingly.”  Or, to hear DC Councilman Vincent Orange tell it, ” We’re at a point where we don’t need retailers. Retailers need us.”

I disagree.  First off, maybe the City Council has lost sight of some hard truths about the District, which suffers from greater income inequality than all 50 states.  There is an even starker contrast with the surrounding counties:  the vast majority of all those fat-cat politicians and well-compensated federal employees commute in every day, and leave every afternoon (there is a reason we have some of the worst traffic in the nation).  The people who actually live in DC have an average income roughly half that of the commuters, and a poverty rate of 18.7% overall (30.3% for kids).

Driving Wal-Mart off is not a win for those residents.  It sounds very nice for the Council to demand “a living wage,” but the hard reality is that most of these residents don’t have the fancy background that allows them to be picky about the kind of job they can get.  Consider, too, that the LRAA does not apply to the majority of businesses operated in the District, so most existing service-sector or retail jobs can still be offered at the District’s minimum wage of $8.25 per hour… oddly, the Council does not seem too worried about the “living wage” requirement there… and no job at all doesn’t exactly offer a living wage, either.

Worst of all, the three stores that Wal-Mart has said it will definitely sideline were all planned for the eastern half of the District, an area (especially Southeast) nearly devoid of quality retail, afflicted with large “food deserts,” and populated by the most impoverished residents.  Say what you will about Wal-Mart’s low wages or strong-arm negotiating tactics; this is the very area where a couple of new Wal-Marts would have made a huge positive difference in the lives of the people who actually live there.

A pretty typical food market in Southeast DC.  Copyright Google Street View.

A pretty typical food market in Southeast DC. Copyright Google Street View.

Maybe the DC Council doesn’t need Wal-Mart, and maybe earnest young crusaders can afford to applaud while the Council runs Wal-Mart out of Southeast DC on principle, but neither of them is considering the day-to-day lives of the residents there.   Enjoy that goose dinner.  Oh, wait.  You didn’t even get to keep the goose.

Gold-Goose2

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