Everyday Low Prices? Not in D.C.!

D.C.'s leaders clearly don't understand economics or business.

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Wal-Mart

If there was ever a "poster child" for government run amuck it would be the Washington D.C. city council. The city has never fully recovered from the riots that wrecked the commercial sector in the late 1960s – and the council just stuck a knife in the back of its best chance to do so in some time.

Wal-Mart, the nation's largest retailer, had committed to building three new stores in neighborhoods that are slowly springing back to life in the eastern half of the city, where poverty is rampant and retail chains are largely absent. The stores would have given a much needed boost to the economy of a city where youth unemployment among black teens is at epidemic levels.

Rather than welcome this bit of good news, however, the council killed it. On Wednesday, it voted 8 to 5 to require retailers with corporate sales of more than $1 billion annually and operating in spaces 75,000 square feet or larger to pay workers no less than $12.50 an hour, a 50 percent increase over the $8.25 an hour minimum imposed on everyone else.

[See a collection of political cartoons on the Democratic Party.]

The council members who voted for the proposal are either stupid, evil, or so deeply in the pockets of organized labor and other special political interests that they cannot see the forest for the trees. The rationale, that big companies can afford to pay more and therefore should pay more, may be the cornerstone of the Obama-ism affecting governments in the big cities, but it isn't going to help the folks who are chronically unemployed in this, the fifth year of the Obama economy.

Even though it has yet to open any stores in the city, Wal-Mart has already been hard at work proving it would be a good neighbor. According to the Washington Post, the Bentonville, Ark., corporation "made $3.8 million in donations last year to city organizations including D.C. Central Kitchen and the Capitol Area Food Bank" through its charitable foundation.

The company responded to the vote as almost anyone except the members of the city council could have predicted: it announced it's not coming to D.C. So instead of having several hundred new jobs and a general increase in economic activity sparked by the construction of these three new stores – at something higher than $12.50 an hour, since the company had indicated it would be starting workers at an hourly rate higher than what the council imposed, they have zero – ZERO – new jobs at $12.50 an hour. Can someone please explain, especially to the people in D.C. who don't have jobs but want them, why this is a good deal?

[Read the U.S. News Debate: Is Obama Turning the Economy Around?]

If it weren't so sad, so pathetic, it would almost be funny. Why a governing body of a city with notoriously, world class, first in the nation bad schools, a subway system that cannot seem to get its act together no matter how much gets poured into it by local, regional and the federal governments, ambulances that can't find the addresses to which they have been sent, and gross inefficiencies in almost every city agency except for the one in charge of parking tickets thinks it is competent to set policy for the nation's largest retail chain is a complete mystery. The council members in favor of the legislation clearly do not understand economics, but you would think, as part of one of the nation's most enduring liberal/labor political machines, they would understand politics. "Less work, More Pay" may sound like a good slogan, but it is bad business, and business is what creates jobs.

D.C. Mayor Vincent Gray could still veto the bill, but that veto would likely be overridden. The U.S. Congress, because it's Washington, D.C., could also vote to keep the new "super wage" from taking effect,  but even if it does it's probably too late. The horse is out of the barn, the barn has been burned to the ground, the horse had been turned into lunch – probably at a D.C. school – and every major retailer in America now knows that bringing its business to the nation's capital is probably a bad bet.

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