September 15, 2013

'Living wage' loses to Walmart's low prices

The decision by Washington's mayor brings focus to the fact that Walmart's customers are often as economically disadvantaged as those who scrape by on its hourly wages.

By AARON C. DAVIS The Washington Post

WASHINGTON — Four bus rides to and from his Northeast Washington apartment to the Walmart in Landover, Md. often consumes half of Jimmy Pegues' day. But since a heart attack last year pushed the used car salesman into retirement and onto Social Security, biweekly trips for $4 generic prescriptions have become a lifeline to make ends meet.

click image to enlarge

Washington resident Jimmy Pegues, 64, rests on an overturned shopping cart recently after crossing the parking lot of the Walmart store in Landover, Md. The round-trip bus trip from his apartment takes half a day, but Pegues said it is worth it, saving him roughly $110 a month on heart medications and blood thinners through Walmart's $4 generic prescription drug program.

Washington Post photo by Aaron C. Davis

"I come to Walmart — religiously," said Pegues, 64, who saves $110 a month over pharmacies in the District of Columbia. "For me, at this point, and at this time in my life, the price is the most important thing."

D.C. Mayor Vincent Gray's decision last week to veto a law requiring Walmart to offer higher pay pitted support for a "living wage" against a desire to spur investment and job growth in the city. But for Pegues and thousands like him who cross the city line every day on their way to the Landover Walmart, the battle was about something more basic: low prices.

Gray's decision brought focus to the flipside of the living-wage debate: that Walmart's customers are often as economically disadvantaged as those who scrape by on its hourly wages.

According to Walmart, District of Columbia residents in the past 12 months spent more than $40 million at the company's stores in suburban Maryland and Virginia. The company did not provide information about those shoppers, but nationwide, Wal-Mart shoppers typically earn lower-middle-class wages, live paycheck-to-paycheck and count jobs and rising food and energy costs as their greatest concerns. One-fifth of them have no credit and use only cash when they shop, according to company spokesman Steven Restivo.

In Washington, the demand for Walmart's prices may be even higher. Nearly 24 percent of the city's residents receive food stamps, more than anywhere in the nation. A recent study also ranked the District of Columbia with a higher rate of food insecurity than any state except New Mexico, with more than 30 percent of children living in households without adequate food supply or the resources to keep groceries in stock.

A steady stream of vehicles with District of Columbia license plates — on average, once a minute — told the tale on a recent evening at the Walmart in Landover. Three miles from the District of Columbia border, Michelle Smith, an unemployed mother of seven from Northeast Washington, loaded a gallon of cooking oil and a 10-pound bag of sugar into her sister's car — a few of $344 in groceries she needed to stretch for the rest of September.

Smith's 14-year-old daughter, Nicole, sat sandwiched between a wall of 64 rolls of toilet paper and a 48-count box of brown sugar Pop-Tarts. Food stamps covered $304 of the haul, with boxed and frozen foods accounting for most since it would be three to four weeks before Smith's sister could bring her back.

On Thursday, Gray vetoed the so-called Large Retailer Accountability Act, which would have required retailers with corporate sales of $1 billion or more and operating District of Columbia stores of at least 75,000 square feet to pay their employees a "living wage" — no less than $12.50 an hour in combined wages and benefits.

The mayor said the measure would have harmed Washington residents, depriving them of access to Walmart's inexpensive groceries and other sale items. He said it would have blocked hundreds of jobs planned for Walmart's new stores — and turned off other retail chains that might have decided the cost of doing business in the District of Columbia was too high.

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