Free Markets, Free People

Who changed the deal?

That’s the question here.  Which entity decided, arbitrarily, to change the conditions of the agreement?

DC officials are furious as Walmart has reneged on a promise to build stores in lower-income areas of the city. Walmart announced last week that they will be shuttering 269 stores throughout the country. (The already-existing three DC stores will remain open.) The company cited the unexpectedly high building and labor costs as to why they would not move forward with the additional locations, but was more open in a meeting as to how DC’s labor laws, including its higher minimum wage, are making it harder to operate a business.

Let’s see.  Was raising the minimum wage to $15 an hour within the District a part of the deal?  Do you think Walmart would have agreed to build had it known that such a raise in labor costs was in the offing?  My guess is “no”.  Thus the citing of “unexpectedly” high … labor costs.   And obviously, it also costs more, then, to build the store in a union town, because when the lowest paid worker gets a raise such as this, guess what happens to the pay of the higher paid workers?  That’s why unions back the minimum wage.

The WaPo sheds some more light on the subject:

Evans said that, behind closed doors, Walmart officials were more frank about the reasons the company was downsizing. He said the company cited the District’s rising minimum wage, now at $11.50 an hour and possibly going to $15 an hour if a proposed ballot measure is successful in November. He also said a proposal for legislation requiring D.C. employers to pay into a fund for family and medical leave for employees, and another effort to require a minimum amount of hours for hourly workers were compounding costs and concerns for the retailer.

“They were saying, ‘How are we going to run the three stores we have, let alone build two more?’ ” Evans said.

Exactly!  When the government that made the deal then changes the conditions, it isn’t the company which is the problem.  It is the government assuming the power to set the labor cost for the company (plus this new fund that’s likely to pass into law) which is at fault.  If anyone should be “furious” it is the company and the citizens now denied the low cost of goods Walmart would have brought to those neighborhoods.  A perfect example of the government engaging in “bait and switch”.

So who, exactly, is it that gets hurt?

Why the very people they were purported to want to help.

The poor.

What a surprise.

~McQ

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10 Responses to Who changed the deal?

  • “City politicians spent much of this year debating whether to require Wal-Mart to provide its workers with no less than $12.50 an hour in wages and benefits — half again as much as the city’s current minimum wage. The “living-wage” measure died after Mayor Vincent C. Gray (D) vetoed it amid threats from Wal-Mart that it would curtail its plans for operating in the city, and the D.C. Council could not muster the votes to override him.”
    https://www.washingtonpost.com/business/capitalbusiness/wal-mart-opens-first-two-district-stores/2013/12/04/b9a601c2-5c63-11e3-be07-006c776266ed_story.html

    Sure enough, AFTER WalMart and the DC gov’t. reached an agreement the DC gov’t. voted in Sept 2013 to raise the minimum wage from $8.25 to $11.50 by 2016.

  • Does this mean that the elite in DC have created a “Walmart desert” for the poor…???

  • But the economy is so awesome under Obama, right? You’d think that right there in DC it’d be better than anywhere else.
    There are certainly a lot of people over on K-Street who are cleaning up, and the folks in Congress are making AND spending money like there’s no tomorrow.

    It IS puzzling ain’t it.
    Maybe if we elect Bernie Sanders!

    Ya know, the stupid is strong with the United States these days, we proved it twice in the last eight years.

  • This story makes me happy. None of the residents of that area deserve to benefit either through jobs or access to cheaper goods.

  • I will give the media narrative. It was evil Jeff Bezos an his tax dodging Amazon.

    To be honest, I’m not exactly broken up for Walmart. They are one of a handful of Arkansas based businesses that had unusual growth during the Clinton era, Hillary having been a board member just prior.

  • On the other hand, and specifically with respect to Wal-Mart — the Wal-Mart Corporation has deliberately thrown its lot in with the leftists — Wal-Mart has chosen to be part of the *enemy* — so, I for one, can’t get too worked up over their woes inflicted by other leftists.

  • When you chose to sleep with dogs, you can’t complain when you wake up with fleas.
    The people who’s mutual funds are tied to walmart, they can complain, they have no voice in such matters.

  • It’s all those middle-class white males living in DC. Made management nervous.