D.C. Mayor to Sign Outrageous Minimum Wage Scheme into Law?

This could be the week when Washington, D.C. Mayor Vincent Gray signs into law a minimum wage measure passed by the D.C. city council two months ago.  The Large Retailer Accountability Act would require stores that are larger than 75,000 square feet and whose parent companies have yearly revenues of $1 billion.to pay its workers 50 percent more than the current local minimum wage of $8.25 per hour.  Proponents of the new law cite the need for Wal-Mart and other employers to pay a “living wage”.  Detractors of the measure, including the liberal Washington Post, correctly claim it will give the nation’s capital an anti-business reputation which will continue to hinder job growth in the District.

Naturally, the Post’s analysis is spot on as Wal-Mart has threatened to scrap plans to build up to six stores in the D.C. area.  Altogether, 1800 jobs would be lost including at two locations in impoverished neighborhoods.

Nevertheless, backers of the measure are stubbornly sticking to their dogma even as Wal-Mart warns it will pull the plug on 1800 jobs if the measure becomes law.  

Last week, Councilman Vincent Orange, in a statement reflecting serious economic imbecility, stated, “We’re glad (Wal-Mart) finally recognized the value of the District of Columbia, but we also recognize the value of our residents, and the value of one hour of our residents’ time is greater than $8.25″.

Wow, what does that mean?  Is Orange claiming that he and other council members are smart enough to determine the worth of every single worker in the nation’s capital?  Wasn’t this same hubris found to be fallacious in the collapsed Soviet Union?

It is bad enough that there is any minimum wage in D.C. let alone an attempt to produce a double tiered system.  Minimum wage laws are, as the late great Murray Rothbard put it, “compulsory unemployment”.  Rothbard explained it well:  “The law says it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.”

But, besides Rothbard’s cogent argument against minimum wage laws, the two tier system developed in D.C.is un-American.  How can there be two different sets of rules for different players in the marketplace?  Would there not be outrage if the government provided bailouts to two car manufacturers while the third which managed its business responsibly was not rewarded with federal largess?  Perhaps that’s not the best example, but again, even the leftist Washington Post understands that the law will create an “uneven playing field” for Wal-Mart and other big box retailers.

At the end of the day, one must question the motives of the Washington D.C. city council which passed the measure.  This particular city council has had three of its members convicted, one plead guilty, and another under investigation for bribery and corruption.  The law targets large, non-unionized retailers.  Was its passage a payback for union donations?  Unfortunately, for workers in D.C., whether it was or not, if the mayor signs it into law they will be out 1800 jobs