Mayor Gray Should Embrace Economic Development that Brings Living Wages

The large retailer living wage bill will head to Mayor Gray for his signature this week. The bill requires large retailers with yearly revenue of $1 billion or more and with stores of at least 75,000 square feet to pay workers at least $12.50 an hour.

Wal-Mart, one of the retailers impacted by the bill, has said it will not open three planned stores if the bill goes into effect, but that should not stop Mayor Gray from signing it into law.  There is no doubt that a healthy retail sector is important to the District, because it meets the demands of DC residents and is a critical part of our economy.  But economic development should not come at the cost of creating jobs that leave residents in poverty.  As a resident in one affected neighborhood told the Washington Post, if Wal-Mart won’t support a living wage, “Let them walk…We don’t need them.”

Here are some facts for the Mayor to keep in mind:

• Retail wages are low: The typical retail salesperson in DC earns just $11.21 an hour, and half of all retail workers in DC earn less than $32,000 per year. Even after taking into account factors such as age and education level, retail workers in DC earn a third less than other workers.

  Even with incentives such as the Earned Income Tax Credit, it is hard for retail workers at relatively low wages to pay for basic necessities in a high-cost of living city like Washington. Plus, the boost for the EITC comes only once a year after taxes have been filed.

• The poverty rate among retail workers is high: One-out-of-10 people who work for District retailers live below the poverty federal line, according to an analysis of Census data by the Economic Policy Institute.[1] This is three times the poverty rate of those who work in non-retail jobs in the city.  Among female retail workers, the poverty rate is 13 percent, four times the poverty rate of other female workers.

• Raising retail wages would reduce poverty:  Given that many retail workers are adults supporting themselves or a family — the typical retail worker is 34 and working full-time — the Large Retailer Accountability Act would lift many families out of poverty.  A wage of $12.50 an hour would boost a full-time salary to $26,000 a year and lift a family of three to about 50 percent above poverty.[2]   

• DC’s Economy Will Benefit, Even If Some Workers Live outside the City: While some workers may live outside of DC, they are keeping DC businesses going, buying their lunches in DC, and shopping in DC stores on their way home from work. The “DC economy” doesn’t recognize jurisdictional boundaries. The fact that some of those who work in DC live elsewhere should not be an excuse for not setting policies to protect those in District workplaces.