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Fortune weighs in on the battle over a "living wage" bill being fought by Walmart and the Washington, DC, city council, and suggests that the retailer's position may be dictated more by a desire to save face rather than a need to save money.

In case you missed in, here's what's happened so far ... The DC legislators passed a bill requiring non-union retail operators of a certain size to pay employees a "living wage" minimum of $12.50 an hour, even though the official minimum wage in the district is $8.25 an hour. Walmart, which lobbied against the bill, responded by saying it would not build three of the six stores it had planned for DC and would reconsider its plans for the other three. The bill isn't law yet - it has to be signed by Mayor Vincent Gray to be enacted, and that is by no means a sure thing - but the battle has brought out partisans on both sides.

The Fortune piece addresses Walmart's claim that the bill will force it to raise prices, which will hurt its ability to offer low-cost goods to neighborhoods that need them. Bad for everyone, Walmart says. But, Fortune writes, "But a 2011 study from UC Berkeley's Center for Labor Research and Education throws some cold water on this thinking. The study asserts that if Wal-Mart were to increase its corporate minimum wage to $12 an hour for its U.S. workers and opted to pass 100% of the additional wage costs onto its customers, that would only amount to an additional $0.46 per shopping visit for the average customer ($12.49 more a year, assuming 27 shopping trips per year, at a total annual spend of $1,187). As for the workers? They'd earn an estimated $1,670 to $6,500 in annual income (before taxes) than they would otherwise, according to the study.

"It's also good to keep in mind that U.S. taxpayers pay for those low, low Wal-Mart prices by propping up federal support programs (see under: food stamps, Medicaid, etc.) for those low income Americans who struggle to make ends meet. As the federal government pays increased attention to its budget shortfalls, living wage efforts will grow stronger."

The article makes the argument that since Walmart has beaten back a similar bill in Chicago, it needs to beat back the DC bill now, lest it find itself facing similar legislative efforts around the US. "The stakes are high and the outcome will set a precedent for the retailer's future negotiations with cities across the country," Fortune says. "The question is whether Wal-Mart wants to earn a reputation for throwing public tantrums and threatening to pull out of cities when it doesn't get its way, especially given the company's interest in expanding into urban areas."
KC's View:
There seems to be a feeling that somehow Walmart and the city will be able to negotiate some sort of compromise, but it's hard for me to see how that would play out. I think it is a lot more likely that the mayor vetoes the bill and ends the discussion.

I remain conflicted. I tend to think that such legislation, even if well meaning, is a bad idea, especially because it doesn't apply to everyone. But I also worry about a city where people can hold down a 40 hour a week job and not be able to support their families.