WASHINGTON, D.C. — In a win for big-box retailers looking to expand in the District of Columbia, Mayor Vincent Gray has vetoed the controversial Large Retailer Accountability Act. The city council voted in July to pass the act, which would have imposed a $12.50 hourly living wage on businesses that have annual corporate sales of more than $1 billion and spaces greater than 75,000 square feet. The living wage is a 50 percent premium over Washington, D.C.'s current minimum wage of $8.25 an hour.
Mayor Gray vetoed the legislation, citing “that the bill is flawed and will fail to achieve the intended goals.” The city council approved the bill, claiming that it was a victory for income equality and low-income workers.
The proposed law had big-box retailers, especially Walmart, reconsidering their plans to open stores in the District. Walmart threatened to cancel plans for the six stores it had agreed to develop if the bill became a law.
“The bill is a job-killer, because nearly every large retailer now considering opening a store in the District has indicated that they will not come here or expand here if this bill becomes law,” the mayor wrote in a letter to the city council explaining his decision.
Keith Sellars, president and CEO of the Washington D.C. Economic Partnership, says that there had been some conversations among the affected retailers that they might file suit had the bill been approved.
Had the bill become a law, the district would have been at risk of losing 4,000 jobs due to retailers focusing their expansion plans on cities outside of Washington, D.C., according to the mayor.
“On the conservative side we would have lost 4,000 jobs, but the long-term effects over the next five to 10 years would had had a much bigger impact on the economy as far as business, particularly retailers, moving to the District of Columbia,” says Sellars.
Nearly 750,000 square feet of new retail space was completed in D.C. in 2012, with another 700,000 square feet currently under construction, according to the Washington D.C. Economic Partnership.
“The District’s retail market is hot,” says Sellars. “The rising demand for retail in Washington is partly driven by the explosive residential growth, but also rising visitor and daytime population.”
The population in the area has expanded by 100,000 since 2000. More than 40,000 new residents moved into D.C. during the past three years and approximately 1,000 new residents move into the city each month.
“The decision to veto the bill sends an important message to the entire business community that the District is serious about economic development. We remain committed to our goals for retail attraction, and are committed to creating a business-friendly environment,” says Victor Hoskins, deputy mayor for planning and economic development.
Sellars predicts that the city council and Mayor Gray will work together to provide a more equitable distribution of wages that would benefit all District workers.