Last month, some of us in Washington were captivated by an epic battle on the District of Columbia Council. At the urging of labor and community groups (with backing from local businesses that compete with Wal-Mart Stores Inc. ), the council passed a living-wage law requiring businesses to pay their workers $12.50 an hour ... but only if the business had more than $1 billion in corporate revenue and operated stores with more than 75,000 square feet. The council did everything but specify that the law only applied to companies whose name started with W, and rhymed with "All-Mart." (Though the few other companies who might feasibly get caught up in this net -- Target Corp. , Home Depot Inc., AutoZone Inc. , Macy's Inc. -- also protested.)
Wal-Mart responded by threatening to halt development plans for the stores it had not yet begun constructing -- three out of the original six, including one south of the Anacostia River, a pet project of Mayor Vincent Gray in an area that desperately needs both the retail and the jobs. The measure passed the council, but ultimately, the mayor vetoed it.
Well, Wal-Mart just opened its first two hiring centers, and 11,000 people applied for 1,800 jobs. As City Paper points out, even if no people applied after the first week, that would give Wal-Mart an acceptance rate similar to the University of Chicago.
One way to look at this is to say that this just goes to show how wrong the council was: People want to work at Wal-Mart, and pricing them out of the local market would have made all these workers worse off. This is true. But another way to look at it is to say that this just shows the gap identified by Adam Serwer between "Washington" and "D.C.":
Washington, D.C., has always been two cities. Washington spills out of downtown Metro stations at 8 a.m.; D.C. huddles on crowded buses at 6 a.m. On Sundays, when Washington goes to brunch, D.C. is in church. Washington clinks glasses in bars like Local 16 in its leisure time, while D.C. sweats out its perm at dance clubs like Love or DC Star. Washington has health-insurance benefits, but D.C. is paying out of pocket. Washington just closed on a condo; D.C. is in foreclosure. Washington is making money. D.C. never recovered from the 2001 recession.
Washington, of course, is mostly white and educated; D.C. is much blacker, poorer and less likely to have an Ivy League degree in its pocket.
Looking at it this way is also true. It is lovely that the free market is providing the people who applied with better opportunities to work. But that flood of applications is a measure of the desperation of many longtime D.C. residents.
The long boom in D.C.'s economy doesn't have much place for unskilled or semi-skilled workers. The places that are hiring don't need them (lobbyists, defense contractors and professional services more than the government bureaucracy -- contra the Tea Party, George W. Bush's wars did at least as much to create an employment boom here as did Barack Obama's stimulus). And thanks to various obstacles -- from persnickety regulatory hurdles and landlords who want to rent properties in gentrifying neighborhoods at what they'll eventually be worth instead of what they actually are, to young professionals who do more and more of their shopping on Amazon.com -- the biggest sectors capable of absorbing these workers, which are retail and food services, are not growing as fast as they should be.
One typically closes a piece like this by calling for more education to upskill those stranded workers. And of course, D.C.'s school system does need a whole lot of fixing. But improving the high schools is not going to help a 35-year-old who needs a job. Easing up on the regulatory burdens to opening a business would be a much faster and more effective way to help those workers. As we've just seen, however, the District of Columbia Council prefers to move in the other direction.
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Megan McArdle at email@example.com