After “promising” back in 2013 to build two stores east of the Anacostia River in Washington, D.C., Walmart has announced it will no longer do so. One reason, according to the Washington Times, is that their three existing stores in D.C. are not performing as well as hoped. But according to Townhall, the company also cited high building and labor costs as a reason not to move forward. Is anybody surprised? Evidently, the District’s leaders are, but should they be? At the time Walmart agreed to move into the area, D.C.’s minimum wage was $8.25 an hour. In January 2014, a bill had been signed into law increasing the minimum wage to $9.50 an hour in July 2014. Now the minimum wage has increased to $11.50 an hour, with a possible increase to $15.00 an hour later in the year. Additonally, the D.C. council has proposed a mandatory tax on employers to fund 16 weeks of paid family/maternity leave for private sector workers. Now they are incensed that Walmart is saying, “no thanks.” Earth to the D.C. council – it’s all about economics, whether you like it or not.
And just to be clear, the arrogance of the District in expecting all private firms to cave to their demands hurts low-income, low-skilled workers the most. Consider the demographics of Ward 7, the neighborhood in which the two Walmart stores would have been built:
- Poverty rate: 33%, compared to 17.7% for the District as a whole. (2014)
- Unemployment rate: 13.4% (Feb. 2015)
- High School graduation rate (at Woodson High School): 60%
- Total crimes reported over 60 days (from 12/20/2015 to 01/19/2016): 388 (includes 120 violent crimes).
So there you have it. Thanks to the wisdom of the District’s leaders, this area will have zero jobs paying $11.50 an hour instead of 300 permanent jobs paying $8.25 an hour (not including 300 temporary construction jobs). How’s that for providing economic opportunity in an area that clearly needs it?