Housing Complex

Is the Living Wage Bill’s Union Opt-Out a Distraction?

The Giant at CityMarket at O will be the city's largest supermarket, at 73,000 square feet.

Earlier this week, Walmart spokesman Steven Restivo sent out one of his regular press email blasts on a familiar topic: what he perceives as the unfair exemption from the controversial living-wage bill for unionized Walmart competitors like the Safeway and Giant supermarket chains. His email begins with an excerpt from a recent Los Angeles Times story.

"'Entry-level pay at area grocery chain Giant is close to the District's current $8.25 minimum wage, plus negotiated benefits, according to Mike Wilson of Respect DC,' a supporter of the Large Retailer Accountability Act (LRAA)," Restivo writes. "That figure seems to be a far cry from the LRAA-mandated $12.50/hour."

Restivo's referring, of course, to the bill passed by the D.C. Council earlier this month that would require stores larger than 75,000 square feet with parent companies grossing at least $1 billion per year to pay a living wage of $12.50 an hour, minus benefits. The bill allows retailers with collective bargaining agreements to opt out—leading to what Restivo considers an unlevel playing field, where unionized companies can pay meager wages while Walmart and other non-unionized stores have to pay above-market rates.

Council Chairman Phil Mendelson, who first introduced the legislation, told me recently that the opt-out for unionized workplaces was justifiable because "presumably a collective bargaining agreement will pay more than the living wage." That's questionable logic—by the same reasoning, unionized companies should also be exempt from the minimum wage because they're "presumably" paying more, or exempt from safety regulations because they unions are "presumably" insisting on a safe environment—and Restivo links to a story quoting Mendelson in his email, noting that Wilson's numbers seem to undercut that argument. Starting salaries have been difficult to assess because these stores do not disclose them, for "competitive" purposes.

But there's another issue here that's been broadly overlooked—by me, by Restivo, and by other observers of the living-wage debate. Namely: No D.C. supermarket would be affected by the legislation anyway, unions or no unions.

The reason for this is that no D.C. supermarket is larger than 75,000 square feet. According to Safeway spokesman Craig Muckle, the largest Safeway in D.C. is the Georgetown store, which is 71,000 square feet. The company's average D.C. store is 55,000 to 60,000 square feet, and there are no plans for any stores as large as 75,000 square feet. Muckle says he hasn't brought this fact up during the living wage debate because "most people don’t necessarily ask or think about it."

Giant spokesman Jamie Miller says Giant's largest D.C. store, on Alabama Avenue SE, is 63,000 square feet. The Giant under construction at Shaw's CityMarket at O development will be 72,000 square feet, while the one coming to Cathedral Commons on Wisconsin Avenue NW will be 56,000 square feet. Whole Foods' largest store is in Tenleytown; spokeswoman Kristin Gross doesn't have the exact number handy but believes it's in the mid-40s range.

In fact, according to United Food and Commercial Workers Local 400 spokeswoman Karlyn Williams, there's only one unionized retailer in the District that meets the size and income requirements of the living wage bill: Macy's. And Macy's, interestingly, was one of the six companies whose executives signed a letter to Mayor Vince Gray last week urging him to veto the bill. Two Macy's spokespeople did not return requests for comment.

Restivo says Walmart has "done our homework" on wages and determined that a starting cashier at the Walmart in Alexandria earns more than a starting cashier at a D.C. Safeway. But both Williams and Wilson contend that the living wage bill would raise wages at places like Giant and Safeway, even if they're not directly affected, by forcing them to compete with the higher wages at Walmart and the other large retailers that are affected.

One other wrinkle: Everyone, from the members of the Council to the media, has spoken of the union opt-out as an "exemption." That's not, strictly speaking, true. The text of the bill states that the living wage requirements "may be waived by the written terms of a bona fide collective bargaining agreement." This would appear to imply that if unionized workers would stand to earn more from the living wage than they currently do, they could simply not waive the requirements. But no one I've spoken with seems entirely sure about this; most have simply assumed that, as the councilmembers have indicated, companies with collective bargaining agreements would simply be exempt.

Then again, with none of the supermarkets clearing the 75,000-square-foot threshold, we may just be talking about a single store.

Update 12:30 p.m.: Restivo emails to say that the size of the stores relative to the 75,000-square-foot threshold is no coincidence. "Anyone who still questions whether special interests groups helped write the LRAA need to look no further than the square-footage threshold in the bill: every Safeway and Giant in the city just so happens to be under 75K sq. ft and ALL of our planned stores in the city would be between 80-120Ksq. ft," he writes. It's hard to argue with that.

Photo by Jessica Sidman

Comments

  1. #1

    The bill should be called the "Giant-Ahold Protection from Competition Act of 2013."

  2. #2

    Well, it is still an exemption. The current unionized grocery stores are indeed exempt- both because of the size threshold (placed just above size of big chain unionized grocery stores) and because they're unionized.

    Let me be clear- I detest Walmart, but see this bill for what it is. If the premise we accept us that big corporations can/should pay a living wage and that employees deserve a living wage to be able to survive, then why not lower the size threshold to include big corporate grocery chains and eliminate the union requirement? Follow the money,

    There's a reason the unions spent tens of thousands lobbying to get the LRAA passed; it certainly wasn't altruistic.

  3. #3

    The 75,000 sf threshold is absurd, and it's telling that Safeway and Giant manage to just slide under. Another consideration: there are currently 13 Safeways in DC, and using 55,000 sf each, this adds up to 715,000 sf.

  4. #4

    I pretty much agree with everything said above. I too don't particularly like Walmart, but believe they could provide some much-needed competition to Safeway and Giant.

    I stopped shopping at the local Safeway last year and do most of my shopping at Aldi; not because of price, but because the service is far better, the employees care, the store is clean and stocked, and I can be in and out in 10 minutes.

    Each trip to Safeway (a union store paying less than living wage) is painful- uncaring employees, Soviet-esque long lines, and just awful service all-around.

    Should Walmart come in, Safeway would have to improve or close, and that terrifies the union leadership and employees.

    In addition, LRAA sends a message to Walmart that if their employees become unionized and contribute to the union's pockets, then they could pay less than a living wage (thus defeating the purported purpose of LRAA).

  5. #5

    "Should Walmart come in, Safeway would have to improve or close, and that terrifies the union leadership and employees."

    if it terrifies the safeway employees, does that not argue against the notion that safeway employees are no better off than Walmart employees?

  6. #6

    Instead of setting wages at a specific dollar figure, maybe a solution would be to require large non-union employers to pay wages comparable to those in force at comparable unionized employers. Everybody would play on a level field, and non-union employers would have less reason to oppose unions (as Walmart has vigorously done).

  7. #7

    The real reason unions win, is that they have a cheaper product now--"let us organize your store and you won't have to pay a living wage."

    Wal-mart will never let that happen, but, maybe the next big box won't care.

  8. #8

    Aaron,

    Did you factor in the cost of benefits at unionized stores? The $12.50 figure in the legislation includes benefits. I'm guessing there's a bit of a difference between those at Walmart and those at Safeway.

  9. #9

    Finally, some folks here are "getting it" that this LRAA bill was just a big sop to the stores with unions. If this "living wage" is such a great idea, then EVERY business in DC should be subject to this, NO EXCEPTIONS.

  10. #10

    How about the Costco in NE, it's 154,000 sq ft.

  11. #11

    I recall during first reading of the bill when Councilmember Muriel Bowser brought up the 75,000 sq ft issue. When she asked where did that number come from, Mendelson couldn't give her a legit answer. That sq ft made it very clear of the intent of the bill. Not wages, but Walmart.

  12. #12

    I think that the new model "superstores" that Giant and Safeway are building, or proposing to build, in DC are in the 60,000 to 70,000 sq. ft. range. So the bill rather carefully exempts them. Giant (Ahold), in particular, is no stranger to spreading significant campaign and other cash around the council, zoning bd, etc., to work its will.

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