The concept of the “Living Wage” came about in America in 1994 in urban planning and has spread to several cities and localities over the past two plus decades, but remains an idea far from universal acceptance.

This week the issue came back into the news in Washington D.C., where Walmart, the retailer liberals love to hate, is constructing its first three stores with plans for three additional stores.

The city council in the District passed a bill waiting for the mayor’s signature, a mayor who remains uncommitted to signing the bill as of this date. The bill would require retailers with stores exceeding 70,000 square feet in interior dimensions and annual corporate sales of over $1 billion to pay employees a living wage. That wage, as defined in the bill, would be $12.50 per hour, about 50 percent more than the minimum wage established in D.C.

Walmart has responded to the bill by suggesting it may consider cancelling the three stores under construction and not building any stores in the District of Columbia if the district is determined to pursue such anti-business policies. Walmart points out that the bill as written seems designed specifically to punish it and allow other, local or smaller competitors, to avoid equal pay to workers.

Others who support the Walmart position argue that living wage requirements harm employment, raise prices, and restrict growth, arguments frankly rolled out when any social burden is suggested for business.

Advocates for the living wage cite several studies where the living wage has been implemented that suggest that none of the concerns noted by those objecting have occurred where the living wage has become policy.

Further, the advantage of establishing a living wage offers benefits that help communities served like providing more purchasing power to workers, raising workers from poverty levels, and reducing turnover.

In news of just bad timing this week another big retailer, McDonald’s published a worker budget tool for managing personal expenses. Unfortunately the budget included a second job to allow an individual to make a living that would pay for food, housing and minimal insurance coverage, thus suggesting McDonald’s is certainly not providing anything approaching a living wage.

The truth is Walmart, McDonald’s, and many other national chains do not pay employees enough to keep their workers from costing taxpayers for the workers to be employed by the retailers.

All too often these employees earnings fall below the poverty level, making them eligible for Medicaid and food stamps and housing support as a burden to the taxpayer. So while Wal-Mart and McDonalds distribute profits to shareholders, taxpayers hold the burden of providing their employees benefits the companies could, and perhaps should, pay for themselves.

The same companies demand endless economic development subsidies when opening their stores in communities including, but not limited to, tax abatements, job training grants, reduced land prices and property tax reductions.

These stimulus benefits reduce schools funding, transfer road and infrastructure costs to taxpayers, in addition to transferring health care costs and supplemental poverty benefits to society.

Walmart, as an example, as of 2010 has 1,100 stores in the U.S. receiving economic development assistance totaling more than $1 billion dollars.

If the system is “free enterprise,” why it is free to the retailer but costly to the taxpayer? Why is free enterprise dependent upon everyone else paying their costs of development and employment?

The living wage is not a perfect solution until it applies to all workers in all jobs, but it is a far better idea than taxpayers carrying the real costs of highly profitable corporations. And the living wage established would help the economy and increase consumer spending.

Let Walmart threaten to not open because they are unwilling to pay the true costs of doing business. After the hand wringing is done count on the stores opening.

 

Jim Crawford is a retired educator and political enthusiast living here in the Tri-State.