So he did it:
D.C. Mayor Gray vetoes ‘living wage’ bill aimed at Wal-Mart, setting up decisive council vote
Some of you predicted this, all of us wondered what would happen. Here are some of the predictable, yet ever amusing commentary:
Walmar helps the poor: http://www.washingtonpost.com/local/dc-politics/with-wal-mart-veto-dc-mayor-puts-citys-poor-ahead-of-rally-cry-for-working-poor/2013/09/14/096a646e-1c81-11e3-82ef-a059e54c49d0_story.html0
Walmart’s fault: http://www.huffingtonpost.com/2013/09/12/dc-living-wage-bill_n_3914264.html
Minimum wage sucks: http://reason.com/blog/2013/09/12/dc-mayor-vetoes-job-killing-anti-walmart
Union president denounces veto: http://www.sacbee.com/2013/09/12/5730909/afge-denounces-mayor-grays-veto.html
Saying that Walmart helps the poor before the working poor is certainly an interesting way to word it (or think about it, in that case). It’s kind of contradictory in a sense, by supporting a store that has such low prices, you’re encouraging the offset of wages and the means Walmart uses to get those low prices. Eh..
People will – and need – to live in the now, and can’t really make decisions to benefit others or even themselves by taking a stand or holding a position.. it costs time and principle and sadly those both require relative economic freedom.
Still, interesting. Needless to say I don’t really agree with the veto, but we all did see this coming.
Min. wage back in the news again with nationwide protests against McDonalds and others.
Check out this analysis of the impact of a $15 / min. wage on Walmart and McDs:
Can Walmart and McDonald’s Afford a $15 Minimum Wage?
Key points from the article:
1. these increases would cost Walmart $18 billion a year, or 80% of its profits.
2. even incremental increase in wages would force Walmart to raise prices (and I would add that this would impact the very consumers that the min. wage is intended to protect).
Here is some simple but not entirely accurate math about what each company would pay if its hourly minimum wage rose to $15. If 75% of the workers at both companies make $8 and the number rose to $15, Walmart’s expense increase would be $18 billion a year. McDonald’s would be $4.5 billion. In the case of McDonald’s, profits would be cut in half. Walmart’s profit would be cut by 80%.
The defense of the current wage structure that Walmart and McDonald’s make is that their shareholders would be badly damaged if increased wages decimated profits. Even if the minimum wage rose slowly, perhaps over three years, the harm might be devastating. Economists and labor advocates argue that if the increase was spread over several years, each company would have the chance to increase prices to consumers as a means to offset that expense. That assumes consumers will pay higher prices, which may not be the case at all.
The impact on reduced profitabiltiy would be catastrophic on Walmart. While it may seem unfair that this company’s shareholders make so much, consider that these shareholders own the stock because of that enormous profitability. Thereby, reducing profits will reduce shareholder interest, which will drop the value of the company enormously. From there, you have increased costs of financing, economic leverage, corporate investment, etc., which would all create a downward spiral that would force the company to cut staff —
— that being the key problem with the min. wage: it always, always reduces employment.