Walmart Threatens Washington, D.C., Pullout If Minimum Wage Jumps

Walmart (NYSE:WMT) said it may scale back plans for stores in Washington, D.C., if a law is passed that will raise the minimum wage for the chain's stores to $12.50.

In an opinion column for the Washington Post, Walmart regional general manager Alex Barron said if the city's proposed "Large Retailer Accountability Act" (LRAA) becomes law, Walmart would scrap plans for three stores that have not yet been built and would review the situation for three other stores, two of which are almost ready to open.

The D.C. council passed the measure by an 8-to-5 vote on Wednesday (July 10). The mayor has ten days to veto it before it becomes law. Mayor Vincent C. Gray indicated that he might consider vetoing the bill while pondering whether to seek reelection, the Post reported.

Technically, the bill does not target Walmart, but sets a special $12.50 minimum wage for retailers with corporate sales of $1 billion or more with stores that are at least 75,000 square feet or larger to pay their employees no less than $12.50 an hour. The city's standard minimum wage is $8.25. The bill also includes a grandfather period and an exception for unionized work forces that would effectively exclude large retailers such as Home Depot (NYSE:HD), Costco (NASDAQ:COST) and Macy's (NYSE:M) from being affected by the bill immediately.

That leaves Walmart, which has already made the investment in the stores and needs to expand into urban areas. The chain's hardball tactics have worked before in Chicago and New York; in Chicago, for example, the city council passed a similar measure, but the mayor vetoed it. In Washington, the measure passed by an 8-to-5 margin, and that would not be enough to override a veto, which requires nine votes.

For more:

- See this Washington Post story
- See the Walmart opinion column

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