Walmart’s Wage Debate – Will it Affect Your Business?

By Karen Koenig | Posted: 07/16/2013 12:26PM

 

WalmartWalmart What if Steelcase were told it had to pay its minimum wage workers nearly 50 percent more than any other manufacturer in the state? Or Furniture Brands or any of the large wood products manufacturers with operations in the United States?

What if it were your company that was targeted? How competitive would you be then?

Whether a manufacturer or retailer, all wood products companies should take note of Walmart’s standoff with city officials in Washington, DC over how much the big box retailer should pay its employees. Passed last week, the “Large Retailer Accountability Act of 2013,” also known as a “living wage” bill, would boost the minimum wage from $8.25 per hour — already $1 higher than the federally mandated minimum — to at least $12.50. The bill applies to any business that operates a retail store of 75,000 square feet or larger within the district and whose parent company’s gross revenues total $1 billion or more on an annual basis.

Interestingly, the “living wages and benefits” provisions “may be waived by the written terms of a bona fide collective bargaining agreement,” thereby excluding large unionized companies, or Walmart if it were unionized.

The measure sits before Washington, DC Mayor Vincent Gray, awaiting his signature.

Walmart, which prior to this had planned to build six stores – and employ 1,800 people – has already threatened to waive plans on three of the stores if the bill is passed. “What’s more, passage would also jeopardize the three stores already under construction as we would thoroughly review the financial and legal implications of the bill on those projects,” Alex Barron, regional general manager for Walmart wrote in a Washington Post op-ed piece.

It was a difficult decision, Barron said. “Like any business, we have a responsibility to our customers, employees and shareholders to reevaluate our options when it looks as if local rules may significantly change. The LRAA would clearly inject unforeseen costs into the equation that would create an uneven playing field and challenge the fiscal health of our planned DC stores,” he wrote.

As the nation’s largest private employer, Walmart has had its share of critics. But regardless of whether you are a fan of Wal-Mart or not, the issue at hand is this: Do you think city governments should have the right to single out companies for forced pay raises?

 

About the Author

Karen M. Koenig

Karen M. Koenig has more than 25 years of experience in the woodworking industry, including visits to wood products manufacturing facilities throughout North America, Europe and Asia. As Editor-in-Chief of Wood Products (formerly Wood & Wood Products), Karen’s primary responsibilities include spearheading the writing, editing and coordinating of the editorial content of the publication, along with the Red Book resource guide and the Red Book online source and supply directory (RedBookOnline.com). She is also a frequent contributor to other Woodworking Network online and print media. She can be reached at kkoenig@woodworkingnetwork.com or Google+.

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Trevor    
Canada  |  July, 24, 2013 at 08:31 AM

I can't imagine the employees of the retail stores Walmart will put out of business would be disappointed. Walmart talks as if these 1800 jobs don't already exist, they just don't work for Walmart, yet ! Sign it Vincent Gray, Washington, DC Mayor. Hopefully other municipalities will follow suite.

John Costin    
Maine  |  July, 24, 2013 at 08:45 AM

Don't be shy, Karen, tell us what you really think! It would be hard to disagree with you when you frame it this way, but you've left out a huge part of the Wal-Mart story. Wal-Mart has used its size and muscle to leverage tax breaks, zoning waivers, ridiculously favorable terms from vendors, etc... In addition, its wages and labor policies (limitations on hours and union organizing, for example) put huge strains on government programs -- many workers, while working the maximum number of hours the company permits (so that it doesn't have to provide any benefits) qualify for food stamps, Medicaid, housing assistance, etc... Check out an MSN story on a recent report here: http://money.msn.com/now/post.aspx?post=96788602-ad1c-46a7-b7f5-23416977b75e In effect, government (i.e., taxpayers) subsidize the chain's ability to offer goods at prices so low that smaller retailers, many of whom do pay their employees living wages, are driven out of business. The chain (and others -- let's not single out only one, even if it is the worst example) is an 800-pound gorilla in the economy. I have a hard time when it sniffs that it is being treated unfairly when a local government tries to stem the flow of handouts to the corporate giant. Now, I must ask: what the heck does this story have to do with woodworking? My gut feeling that some editors at WN have an agenda that is not limited to reporting on our industry is tingling...

JBrigham    
California  |  July, 24, 2013 at 10:04 AM

This is just wrong on many levels - we have lost our ability to think! As long as the employees, customers, and owners are acting without coersion, there is NO problem. Stop the gov't subsidies and stop the gov't coersion, and let the market determine the outcome!

 

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