Covering Wal-Mart in DC, Media Don’t Question Claims of ‘Worker Advocates’ Who Will Kill Jobs

For the past several weeks, Washington D.C. Mayor Vincent Gray has been playing defense in the news media against “advocates for workers” who favor a “living wage bill.” That’s partly the result of shrewd marketing on the part of lawmakers who favor the legislation – who doesn’t favor a “living wage?” But it’s also because reporters do not typically question self-described “worker advocates” about the economic realities attached to a higher minimum wage.

When the government mandates a higher wage beyond what employers can afford to pay for unskilled labor, the result is higher unemployment. In other words, if the self-proclaimed “advocates” of the working class had there way, the number of people with jobs would be smaller.

After Mayor Gray vetoed a so-called “living wage” bill in September, the Washington Post ran a series of reports that call out for additional investigation.  The proposed legislation -- officially titled the “Large Retailer Accountability Act” -- would have directed retailers with sales of at least $1 billion to pay employees a minimum of $12.50 an hour in combined wages and benefits up from the current minimum wage of $8.25 an hour. Union officials have a vested interest in the bill since it includes an exception for employers who collectively bargain with their workers. To its credit, the Washington Post makes it clear in a Sept. 12 report that the bill would put Wal-Mart at a disadvantage.

“The union exemption and square-footage requirement rankled Wal-Mart officials, who said those provisions created an uneven playing field — particularly with the unionized grocery chains they plan to compete with in the city,” the report says. But that’s not the full story. Contrary to what D.C. council members have been telling members of the press, the proposed “living wage” would result in fewer opportunities for the newest and most needy members of the workforce. Yet, the Washington Post claims the “bill would raise the annual earnings of a full-time employee making the lowest legal wage from about $17,000 to $26,000.”  That’s assuming they are hired in the first place and that’s assuming employers are willing to pay that wage.

If readers were better acquainted with what recent studies said about laws that raise the minimum wage, the political class would have a lot more to answer for in the press. Just last year, the Rhode Island Center for Freedom and Prosperity published a reporton teenage unemployment that deserves more attention.

By increasing the minimum wage from $6.75 to $7.40 in 2005, Rhode Island policymakers cost the state’s teens 397 jobs in 2011, the study concluded. Out of that total, the study also said 306 were lost to those without high school diplomas.

“Because of this minimum wage increase hundreds of Rhode Island teens are not going to have the chance to earn a paycheck, to learn important business skills and build their resumes,” Mike Stenhouse, president and CEO of the Center, observed.

The Rhode Island think tank also inserts some national figures in its study that would greatly benefit the reporting that flows out of Washington D.C.

“Of the 24 states with unemployment over 8.0% for 2011, 11 had set their minimum wages above the federal $7.25 per hour,” according to the study. “Of the 26 states with 8.0% unemployment or lower, only six had elevated minimums.  The average unemployment rate for the former was 9.0%, compared with 7.7% for those in which the federal rate applied.”

While the Post makes a sincere effort to balance out its ongoing coverage of Mayor Gray’s veto by quoting him at length, it fails to highlight studies that bolster his arguments. That’s unfortunate because the objective facts here make it clear that jobs are lost when government officials intervene into the free market with benign sounding terms like the “living wage” that translate into lost work opportunities.