Posted on 07/09/2013 7:15:56 PM PDT by SeekAndFind
A couple lessons, here. First, businesses are not obligated to open in your city or your neighborhood, particularly when you incentivize them to locate elsewhere. Washington, D.C. is particularly susceptible to losing potential jobs (particularly in entry-level and working class retail positions, as opposed to lobbyist slots) to nearby jurisdictions because it doesn’t take much to simply cross the bridge to friendlier climes in, say, Virginia.
Second, as Sonny Bunch reminds us of a lesson from Econ 101, hiking the minimum wage kills jobs.
Here’s the haps. In Washington, Wal-Mart, the city council, the grocery store unions, and a thousand Wal-Mart hating community groups have been engaged in a delicate, dumb dance for years over whether the giant retailer should be allowed within the hallowed precincts of the District of Columbia. Other big box stores are allowed— Best Buy, Target, and Home Depot for example—but the mother of all box stores has been picketed and pushed and generally trashed throughout its attempts to set down some retail roots in the District. The parties seemed to be coming to an agreement on three stores inside the District, predicted to bring 900 full and part-time jobs and some fresh grocery options to those so-called “food deserts” you hear about.
But the agreement might fall apart over a “living wage” bill, which requires a segment of retailers that sounds suspiciously like “retailers that are Wal-Mart” to pay far and above D.C.’s $8.25 minimum wage:
Representatives from Wal-Mart say the company will no longer build its planned stores at Skyland Town Center and Capitol Gateway, retail sites in Ward 7. “They’re not bluffing me,” Councilmember Yvette Alexander (D-Ward 7) says, having just left a meeting with the world’s largest retailer. “We worked for many years to get this commitment. I really didn’t think it would get to this point.”
The Large Retailer Accountability Act requires companies that take in at least $1 billion in revenue annually to pay their employees at least $12.50 an hour, well above the District’s minimum wage of $8.25. The bill also only applies to stores that are at least 75,000 square feet, thus exempting companies like Apple and Starbucks.
Isn’t the carve-out for liberal-approved billion-dollar retailers precious? Wal-Mart’s announcement is enough to make some reconsider and see the big picture:
In addition to the two Ward 7 stores, Alexander’s chief of staff, Ed Fisher, also says Wal-Mart’s move imperils a store planned for New York Avenue and Bladensburg Road NE. Councilmember Kenyan McDuffie (D-Ward 5), who represents that area, was one of eight “yes” votes on the bill’s first reading.
“That was without knowing Wal-Mart was going to pull out,” says Jeannette Mobley, McDuffie’s chief of staff. Mobley says her boss is “going to give this some thought” before tomorrow’s Council session.
Fisher says each planned Walmart was going to have at least 300 full- and part-time employees, as well as enhance food shopping options in Ward 7, where there are only four full-service supermarkets. “We’re going to have fewer options for groceries and commercial retail,” Fisher says. “At least 900 people won’t have an opportuntiy whether it’s full-time or part-time. Whether it’s a student in high school or a senior or a job someone can use as a stepping stone.”
As Bunch puts it: “So instead of decreasing the unemployment rate in blighted Washington, D.C., neighborhoods, there will be no jobs. Good job, guys! You really nailed this whole ‘governance’ thing.”
Social Justice! RT @OneFineJay: So, instead of 300 employees making minimum wage, you have 300 people without jobs. http://t.co/xIgk5aIhZ6
— Lachlan Markay (@lachlan) July 9, 2013
The argument from the left is a petulant cry of, “Hey, the Waltons are real rich and they can’t afford to pay $12.50 an hour?!” Again, they’re not obligated to bring their stores to your city when you’re actively trying to make it harder for them to do business there, especially when they have other options nearby. In the same way, gun accessory manufacturers are not obligated to stay in your state when you’re banning their products. In the same way, smart, talented people are not obligated to be doctors when the cost of becoming a doctor and maintaining malpractice insurance isn’t worth the financial rewards of being a doctor. Incentives matter, and free people respond to them.
Oh, and if the D.C. Council does end up blocking Wal-Mart in the city, it’ll be great fun to watch them all later endorse former Wal-Mart board of directors member Hillary Clinton.
(For the record, though I’m defending Wal-Mart here, I’m not always down with the ways the company colludes with government to get into certain communities, via eminent domain, for instance.)
Liberals are snobs. They roll up their windows and hold their noses just driving by Walmart. Even if they never go there, they don’t want other people to, either.
they’d rather take money from others to keep the 900 on welfare.
Economics is a zero sum game in the US these days so if Walmart opens up with 900 jobs it will kill 900 jobs from supermarkets and other businesses. Since the 2007 RE bubble collapse our economy has been zero sum or worse. Prior to this we had an expanding economic pie
An example. Walmarts have garden departments. If this Walmart opens up it will steal this business from stores such as a supermarket that sells bagged mulch stacked outside the entrance doors. It will steal garden business and jobs from Home Depot and small hardware stores
With all of OUR money that is floating around the District of Corruption these days, I don’t think you’ll find many Walmart shoppers there anyway. The elite, commie snobs would never lower themselves to be seen in a Walmart.
I live outside DC.
DC wanted Walmart sooo bad for years - and Walmart was worried about the crime rate. FINALLY, about 2 years ago, Walmart agreed to 6 stores and spent money on development. 3 stores are currently under construction and the other 3 are in the planning stage.
Now, at the 11th hour, the DC Council wants to pull the old switcheroo and raise the minimum wage from $8.25 to $12.50 per hour. If Walmart had known this 2 years ago, it never would have agreed to move in and spend the money it already has on development.
FYI: The new minimum wage proposal only applies to big-box stores, not Mom-n-Pops. I don’t even know if it would pass constitutional muster based on 14th Amendment equal protection issues.
Liberal controlled area. The Constitution no longer applies. Get used to it.
Wow.....just wow.
Are you lost?
Thank you. I was going to post much the same, but you’ve hit the main points.
Walmart, or any other retailer, opening a store does not create new jobs. Unless someone is going to contend that the people in the market area will buy a lot more toilet paper or CDs after Walmart opens than they did before.
There are also some confounding factors. Three of them:
Walmart generally sells more stuff per employee than its competitors, which might result in a net loss of jobs in retail.
OTOH, WM generally sells stuff cheaper, leaving more money for its customers to spend on something else, in the process creating jobs.
Walmart might pull customers from outside the market area, if WM is not available closer to them. But that doesn’t create new jobs, it just transfers them from one market area to another.
I believe Walmart is lucky they can still pull out.
They would have been robbed blind by employees and customers alike in DC anyway.
I should also have pointed out that “steal” is not the right verb in this case.
IOW, 'I didn't know there were going to be consequences.' Hey, at least his spokesperson was honest about her boss' stupidity.
Just wow!! Do you have enough reasoning abilities to know what a non-expanding economic pie is? And see if it applies here?
that don’t make no sense.
The U6 rate in the district is like 13%. There are plenty of people that need jobs. The pie in DC has been exploding and aiming higher over the next few years, which is why Walmart decided to take the chance.
Supermarkets out here in the burbs (near two walmarts, two targets, and two Lowes and two HDs mind you) still manage to sell their mulch and if they couldn’t sell mulch and flowers, maybe they should focus on food.
Just because the jobs Walmart provides aren’t 200k per with stock options, a company car with an admin doesn’t make them unworthy.
A common colloquialism in less sophisticated countries is “Stealing bread from his families mouth” I have heard foreigners here use this expression
You get that in a crappy Obama economy Chinese guy X opening his restaurant down the block from Chinese guy Y will take business from him. Enough new customers are not “created” to keep X and Y happy because there is not enough discretionary spending money in peoples pockets
Idiots are DDC. Dumber than Dog Crap!
Ohhhhhhhhhh and how and why is the economic pie in DC exploding, as you put it? How come it isn’t “exploding” in Newark New Jersey and Newark Delaware?
How is the U6 doing in America as a whole?
This is not an Obama economy issue, though a poor economy exacerbates the situation.
Any new business, unless it has no competition, will acquire its business mostly by taking business away from competitors, either by taking existing market share, or by taking new market share that would otherwise have been acquired by the existing firms. Or, in some cases, by convincing customers to spend money with them that they would otherwise have spent on something else entirely.
Nothing wrong with that, of course. And nothing wrong with WM doing the same. I just get very tired of their idiotic “900 new jobs!” meme.
They are new jobs in a sense, but they are most certainly not 900 new NET jobs.
The amusing part is I actually enter Walmarts and buy things there from time to time while many of our many of our freeper free market theoreticians never shop there.
I used to like WM a lot. Mostly because it pisses off liberals.
The last year or so they seem to have cut WAY back on staffing, and waits to check out have gotten ridiculous.
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