January 21, 2016 at 11:43 am EDT | by Mark Lee
What Walmart, and small businesses, are telling D.C.
Walmart, gay news, Washington Blade

(Photo by Mike Mozart of JeepersMedia; courtesy Flickr)

Last week brought a helluva humiliating series of embarrassments for D.C. elected officials.

Local politicians have, however, no one to blame but themselves. Except perhaps the labor union sidekicks and single-minded pie-in-the-sky policy groups promoting a steady stream of onerous new business mandates while disingenuously claiming and falsely promising no economic downsides.

On Friday morning, Walmart announced the company was scuttling plans to open two additional superstores in the District slated for east of the river – disappointing lower-income residents eager for convenient access to the retailer’s goods and groceries.

While business development decisions are by nature complicated and influenced by a complex array of considerations – a concept politicians seem utterly incapable of comprehending – interconnected regulatory factors stood out.

D.C. Council member Jack Evans, who chairs the finance and revenue committee, sat in on a private meeting between Walmart officials and Mayor Muriel Bowser and her deputy mayor for planning and economic development. Evans publicly indicated that company representatives were more candid in that setting about their decision to halt adding locations beyond three stores already opened.

Walmart officials explained that successively imposed mandates on businesses in the District and a bevy of proposed new legislative edicts in the pipeline had soured the company on the affordability and attractiveness of growing operations here. Evans said store officials cited the looming possibility of another super-sized hike in the minimum wage to 15 dollars an hour, by possible ballot initiative currently under court challenge, as a primary concern.

Top-tier worst-in-the-nation and highest-in-the-region corporate tax rates and a notoriously business-unfriendly regulatory regime didn’t exactly encourage expansion either.

But it’s the plethora of half-baked proposals currently being floated around the D.C. Council these days that cause enterprise the greatest worries about a compounding and cumulatively counterproductive “layering” effect. One deep cut might not kill the golden goose, but repeated grievous wounding can.

A second public hearing held only the day before Walmart’s announcement, on an extravagantly excessive paid leave proposal exclusively financed by yet another business tax, was only the most egregious example.

The Washington Post editorial board called the plan “preposterous” and the left-leaning Urban Institute warned program costs would total $1.3 billion, necessitating that the projected business tax triple to an astounding 3 percent of wages, or higher.

D.C. CFO Jeffrey DeWitt would only offer that payouts would clearly exceed revenues, creating a deficit that disallowed certification the proposal was eligible for approval. Reading between the lines, it wasn’t difficult to decipher that the city’s head bean counter couldn’t make a definitive determination based on the sloppily crafted bill’s content.

Also in the works are proposals to dictate three-week advance scheduling for employees of national chains and franchises, a standard in effect nowhere else. It will inevitably trickle down to all employers. San Francisco, the only jurisdiction in the country to pass a similar scheduling bill with a shorter advance notice requirement, has continued to delay implementation due to excessive complexity and negative ramifications.

The litany of other proposals includes dictating minimum employee work hours and actually restricting the hiring of new employees. A broadening array of well-intentioned but misguided attempts to micromanage local enterprise won’t create a progressive paradise but will instead only punish the poor.

One veil-piercing inquiry lurks amidst all this nonsense. Who offers better job training for entry-level and lower-skilled unemployed residents: the District government or Walmart? The tiny number of government-cycled trainees ill-prepared for the real-world workforce or the nearly 2,000 Walmart employees succeeding at the company’s stores and striving to move up to new positions of responsibility?

The District’s employment services program is so utterly dysfunctional that D.C. is the only jurisdiction in the nation the Department of Labor classifies as a “high-risk” partner for job training and employment programs.

Credit goes to Mayor Bowser for cautioning that these ill-fated political interventions will only produce the opposite of what was intended.

The choice is simple, straightforward and stark.

Mark Lee is a long-time entrepreneur and community business advocate. Follow on Twitter: @MarkLeeDC. Reach him at OurBusinessMatters@gmail.com.

4 Comments
  • Wal Mart didn’t back out of the deal because of Business mandates. Wal Mart never wanted the stores in the less wealthy neighborhoods. They got the stores that they wanted, and once those were built they broke the deal. End of story. As for the districts business climate. If it is so terrible, why are stores like Wal Mart clamoring to get in? Wal Mart, Costco, Lowes, Home Depot, Target, have all been jumping in to DC.

    And as far as Wal Mart’s overall health goes, they have had two years of horrific publicity that has hurt their sales nationwide. However their current stores in DC are all highly profitable. So again, the districts business climate is good enough that the stores Wal Mar DOES have here are all profitable even though they are closing hundreds of other stores nationwide. And again, they fought against having to put stores in poor neighborhoods, and they didn’t even though they said they would because it’s what they always planned to do.

    • Nonsense.

      It’s not that neighborhoods surrounding Skyland and Capitol East Gateway are poor. Most Walmart stores draw customers from miles around, after all.

      Rather, it is that those neighborhoods are also perceived as violent and dangerous to travel to or through as a shopping destination location.

      People don’t feel comfortable shopping where they might be putting themselves and their loved ones at risk of being mugged, shot by a stray bullet and/or killed. Duh.

      Deanwood, Lincoln Heights, Mayfair-Hillbrook, Capitol View, River Terrace, Twining, Fairlawn, Randle Highlands, Penn Branch, Fort Davis Park and Dupont Park are nearby neighborhood to those now-cancelled Walmart sites that are beset by persistent violent crimes, shootings and homicides. Not good.

      And imagine Walmart directors’ disappointment when told that their newest store in a corner of NE, Ward 4 was built in the neighborhood with the city’s WORST regression in crime– Lamond-Riggs/ Ft. Totten.

      That’s the mayor’s (multiple mayors, actually) and council’s, fault, not Walmart’s.

      • If that’s true then Walmart should have never agreed to build those stores!

        One of the many reasons that poorer neighborhood stay poor is that people with a bit more money who might consider living there don’t because of the lack of neighborhood amenities like retail.

        I completely agree that Walmart got the stores they wanted and then came up with excuses to not build the ones the city really NEEDED.

    • Your explanation fails to explain why so few stores locate in Anacostia and why so many seem to be leaving DC in general or replacing employees with self check out kiosks as soon as possible. The DC policy class doesn’t care about its victims who graduate, or don’t graduate, skill-less from its failed schools, and then are not productive enough to justify being paid $7 much less $15 until they’ve been trained on the job in things like how to add and subtract. The political class is happy to see their lives stolen and anyone not a lawyer, lobbyist or bureaucrat left on welfare in government housing for their entire lives.

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