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DC Passes Living Wage Act Despite Wal-Mart’s Threats

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(Photo credit: FREDERIC J. BROWN/AFP/Getty Images)

(Photo credit: FREDERIC J. BROWN/AFP/Getty Images)

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WASHINGTON (CBSDC/AP) — On its second reading before the D.C. council, the controversial Large Retailer Accountability Act passed by a margin of 8-5 Wednesday afternoon.

Without a veto from Mayor Vincent Gray, that means a non-union District retailer with a parent company making more than $1 billion per year and occupying at least 75,000 square feet will have to pay employees a minimum of $12.50 per hour. Current minimum wage in the city is $8.25. Federal minimum wage is $7.25.

Wal-Mart said Tuesday that it would scrap plans for three of the six stores planned for D.C. if the legislation went through.

Alex Barron, a regional general manager for the chain, made the announcement via an editorial published in The Washington Post Tuesday.

Three Wal-Mart stores are already under construction. The three that would be dropped, Barron wrote, are planned for Skyland, Capitol Gateway, and New York Avenue.

Wal-Mart spokesman Steve Restivo said in a statement that the company would “review the financial and legal implications on the three stores already under construction,” as well. “This is a difficult decision for us — and unfortunate news for most D.C. residents — but the council has forced our hand,” he said.

The company has been an outspoken opponent of the bill, which passed an initial council vote in late June.

Mayor Vincent Gray said in a response to the editorial that “the cancellation of three planned stores will surely set us back.”

He asked the council to consider whether the bill would promote economic development.

Barron’s editorial urged Gray to veto the bill, calling it “discriminatory” and contrary to the administration’s economic development policies.

While Gray has not said whether he will veto the legislation, he told the council he has deep reservations about it. Two of the stores Wal-Mart says are imperiled by the measure are located in majority-black communities east of the Anacostia River, where Gray lives and where unemployment is much higher than in the rest of the city.

Some cities including San Francisco and Santa Fe, N.M., have approved across-the-board minimum-wage hikes, but the bill would make Washington the first city to single out big-box retailers.

The Chicago City Council approved a similar bill seven years ago, but it was vetoed by then-mayor Richard M. Daley. Joe Moore, the city alderman who sponsored the bill, said Wal-Mart made “the same kind of threats” about refusing to open stores in the city when the legislation was being considered. Wal-Mart ultimately opened several stores in Chicago.

New York state raised its minimum wage in March but only after agreeing to provide tax subsidies to stores that hire seasonal workers, including Wal-Mart.

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(TM and Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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