Like so much of what goes in Washington, lawmakers believe that passing a law overrules reality. The latest attempt to subvert economic law is the approval of “a bill requiring some large retailers to pay their employees a 50 percent premium over the city’s minimum wage, a day after Wal-Mart warned that the law would jeopardize its plans in the city.”
I live on the edge of west Cobb County in Georgia. Wal-Mart wanted to put a store a few miles from our home on a four-lane road that connects the city of Marietta and Dallas, Georgia — Dallas Highway.
The county added a number of provisions that the large retailer refused to accept. So instead of Cobb County getting the tax revenue, it went to Paulding County just across the Cobb County to build the new store that is not visible from the road. Paulding got customers from Cobb and Paulding counties, but Paulding got all the tax revenue.
D.C. council member Vincent B. Orange (D-At Large), a lead backer of the legislation, had this to say about Wal-Mart’s “threats”:
“The question here is a living wage; it’s not whether Wal-Mart comes or stays. . . . We’re at a point where we don’t need retailers. Retailers need us.”
Let me see if I understand what Mr. Orange is saying. No jobs at zero wages are better than some jobs at higher than the minimum wage rates. “Wal-Mart’s average, full-time hourly wage for Wal-Mart stores is $10.83 and is even higher in urban areas. The average full-time hourly wage is $11.62 in Atlanta, $12.57 in Boston, $11.52 in Chicago, $11.26 in Dallas, $11.49 in San Francisco and $11.48 in New York City. Associates also receive performance-based bonuses.”
This doesn’t count how construction of the Wal-Mart stores will create jobs and the new stores that will develop around the Wal-Mart.
Wal-Mart wanted to build a store on the site of the old St. Thomas housing development in New Orleans. Opposition was loud and fierce by the usual suspects, but in the end, after nearly five years of battles, Wal-Mart prevailed, employing 600 people. That’s 600 people that didn’t have jobs before Wal-Mart invested in a new store.
Compare Mr. Orange’s “we don’t need retailers, retailers need us” statement with how the city of Chicago worked with Wal-Mart and the impact that Wal-Mart had on jobs:
“[In June of 2010] Walmart announced . . . that it will work with the city of Chicago to build several dozen stores during the next five years that will create approximately 12,000 jobs as part of a long-term initiative called the ‘Chicago Community Investment Partnership.’
“The new plan centers on dramatically increasing store growth to help eradicate what Walmart calls ‘food deserts’ and stimulate local economic development. The chain said it will open multiple stores of varying size and format across Chicago, creating approximately 10,000 associate positions and 2,000 unionized construction jobs in the process.”
Here’s the deal. The reason politicians fight retailers like Wal-Mart is because they can’t control them. Instead of people depending on government, they are now more free and endowed with self-respect. There are opportunities for advancement in the free market. There’s nowhere to advance when you’re getting a welfare check.
That’s why most politicians hate the free market.
Charles Krauthammer nails it: