Washington Push for Higher Minimum Wage for Workers Has Walmart Balking

Mayor Vincent C. Gray, who worked hard to lure Walmart, finds himself caught in the middle, and many residents sound less than grateful to lawmakers.

“Those big people in government, they don’t understand my situation,” said Fred Reaves, 45, who is unemployed and said he would gladly take a job at the current city minimum, $8.25.

“Eight-something, it’ll motivate you to start going to work,” Mr. Reaves said as he stood around the Skyland Town Center, a patch of barren asphalt and shuttered stores where Walmart planned to build. “You can start paying some bills. It will help you to come off public assistance.”

On July 10, the City Council passed a “living wage” measure that would require Walmart to pay at least $12.50 an hour, saying it was fighting to protect struggling residents in what has become a high-cost city.

Supporters of the measure say that Walmart, whose revenues in 2012 were $469 billion, can well afford to pay workers more.

“Their net income was $17 billion,” said Vincent Orange, a city councilman who voted for the ordinance. “You don’t want to share a little bit with the citizens? Come on.”

A decade ago, the city gave tax breaks to lure retailers, Mr. Orange said, but now it is booming and can negotiate from strength.

The day before the City Council passed the measure, a Walmart official warned in an op-ed article in The Washington Post that if required to pay $12.50 an hour, the company would cancel three planned stores and consider withdrawing from three projects already under construction.

The next move is up to Mayor Gray, who is weighing a veto.

Officially the mayor has taken no position, but he is widely seen as opposed to the measure. The Council has delayed formally sending it to his desk for action. The measure, called the Large Retailer Accountability Act, would require stores of at least 75,000 square feet that are owned by companies with $1 billion or more in annual revenue to pay the higher minimum wage. Because existing stores and those with unions are exempt, it is seen as squarely aimed at Walmart.

As Walmart, the world’s largest retailer, has sought inroads in major cities, it has faced resistance from local merchants, who fear being undercut, and from officials who say minimum-wage jobs mire workers in poverty.

Democrats on the House of Representatives work force committee produced a report this spring contending that the government subsidizes Walmart because employees earn so little that they qualify for Medicaid, food stamps and housing assistance.

Pedro Ribeiro, a spokesman for Mayor Gray, argued the opposite: minimum-wage jobs help the chronically unemployed take a first step into the work force.

“Yes, Walmart jobs are not great,” Mr. Ribeiro said. “But for some people, it will be their first employment and they’re not qualified to do anything else. We need that entry-level benchmark in the District.”

Washington is experiencing an economic revival, with population growth on a par with Sun Belt cities. But the benefits are not spread evenly. East of the Anacostia River in Ward 7, where two of the Walmart stores, including the Skyland site, are planned, unemployment is 13.9 percent. In nearby Ward 8, it is 20 percent.

Victor L. Hoskins, the deputy mayor for development, said Walmart’s threat to cancel projects if the measure took effect was no bluff. He calculated that 4,000 retail and construction jobs were at stake from three of the projects.

“The question is not $8.25 versus $12.50,” Mr. Hoskins said. “The question is $8.25 versus zero. It’s called no jobs.”

Opposite the Skyland site, on Good Hope Road, Carl Williams, 49, a barber at the Like That salon, whose dozen barbers were bustling on Thursday afternoon, had mixed feelings. He thought $12.50 was a fair starting wage. But he said he would not hesitate to encourage his two daughters to take a job at Walmart for $8.25.

“One who is 21 needs a job real bad,” he said. “She had a baby real young and didn’t finish high school.”

At a nearby Shoe City, the assistant manager acknowledged that Walmart might undercut her prices. But the giant retailer would also increase foot traffic in the neighborhood, which could benefit Shoe City, the manager, Shasherri Hindman, said.

Ms. Hindman, 25, said she started at minimum wage five years ago and worked her way up. “What’s wrong with $8.25?” she said. “I’m totally on Walmart’s side.”

Willie Ford, 39, a carpenter, scoffed at the notion that Walmart could not afford to pay $12.50. “Come on, they’re going to make beaucoup money from this area,” he said. At the same time, he acknowledged that many people in the neighborhood would gladly take a job at $8.25. “Like a newborn baby, you’ve got to crawl before you walk,” he said.

Washington Push for Higher Minimum Wage for Workers Has Walmart Balking

Mayor Vincent C. Gray, who worked hard to lure Walmart, finds himself caught in the middle, and many residents sound less than grateful to lawmakers.

“Those big people in government, they don’t understand my situation,” said Fred Reaves, 45, who is unemployed and said he would gladly take a job at the current city minimum, $8.25.

“Eight-something, it’ll motivate you to start going to work,” Mr. Reaves said as he stood around the Skyland Town Center, a patch of barren asphalt and shuttered stores where Walmart planned to build. “You can start paying some bills. It will help you to come off public assistance.”

On July 10, the City Council passed a “living wage” measure that would require Walmart to pay at least $12.50 an hour, saying it was fighting to protect struggling residents in what has become a high-cost city.

Supporters of the measure say that Walmart, whose revenues in 2012 were $469 billion, can well afford to pay workers more.

“Their net income was $17 billion,” said Vincent Orange, a city councilman who voted for the ordinance. “You don’t want to share a little bit with the citizens? Come on.”

A decade ago, the city gave tax breaks to lure retailers, Mr. Orange said, but now it is booming and can negotiate from strength.

The day before the City Council passed the measure, a Walmart official warned in an op-ed article in The Washington Post that if required to pay $12.50 an hour, the company would cancel three planned stores and consider withdrawing from three projects already under construction.

The next move is up to Mayor Gray, who is weighing a veto.

Officially the mayor has taken no position, but he is widely seen as opposed to the measure. The Council has delayed formally sending it to his desk for action. The measure, called the Large Retailer Accountability Act, would require stores of at least 75,000 square feet that are owned by companies with $1 billion or more in annual revenue to pay the higher minimum wage. Because existing stores and those with unions are exempt, it is seen as squarely aimed at Walmart.

As Walmart, the world’s largest retailer, has sought inroads in major cities, it has faced resistance from local merchants, who fear being undercut, and from officials who say minimum-wage jobs mire workers in poverty.

Democrats on the House of Representatives work force committee produced a report this spring contending that the government subsidizes Walmart because employees earn so little that they qualify for Medicaid, food stamps and housing assistance.

Pedro Ribeiro, a spokesman for Mayor Gray, argued the opposite: minimum-wage jobs help the chronically unemployed take a first step into the work force.

“Yes, Walmart jobs are not great,” Mr. Ribeiro said. “But for some people, it will be their first employment and they’re not qualified to do anything else. We need that entry-level benchmark in the District.”

Washington is experiencing an economic revival, with population growth on a par with Sun Belt cities. But the benefits are not spread evenly. East of the Anacostia River in Ward 7, where two of the Walmart stores, including the Skyland site, are planned, unemployment is 13.9 percent. In nearby Ward 8, it is 20 percent.

Victor L. Hoskins, the deputy mayor for development, said Walmart’s threat to cancel projects if the measure took effect was no bluff. He calculated that 4,000 retail and construction jobs were at stake from three of the projects.

“The question is not $8.25 versus $12.50,” Mr. Hoskins said. “The question is $8.25 versus zero. It’s called no jobs.”

Opposite the Skyland site, on Good Hope Road, Carl Williams, 49, a barber at the Like That salon, whose dozen barbers were bustling on Thursday afternoon, had mixed feelings. He thought $12.50 was a fair starting wage. But he said he would not hesitate to encourage his two daughters to take a job at Walmart for $8.25.

“One who is 21 needs a job real bad,” he said. “She had a baby real young and didn’t finish high school.”

At a nearby Shoe City, the assistant manager acknowledged that Walmart might undercut her prices. But the giant retailer would also increase foot traffic in the neighborhood, which could benefit Shoe City, the manager, Shasherri Hindman, said.

Ms. Hindman, 25, said she started at minimum wage five years ago and worked her way up. “What’s wrong with $8.25?” she said. “I’m totally on Walmart’s side.”

Willie Ford, 39, a carpenter, scoffed at the notion that Walmart could not afford to pay $12.50. “Come on, they’re going to make beaucoup money from this area,” he said. At the same time, he acknowledged that many people in the neighborhood would gladly take a job at $8.25. “Like a newborn baby, you’ve got to crawl before you walk,” he said.

Wal-Mart Hires Former Bush Aide as Chief Image Maker

The company, the nation’s largest retailer, announced on Wednesday that Dan Bartlett, an adviser to President George W. Bush, would be its new executive vice president of corporate affairs, starting in late June.

The vague-sounding role in fact has a wide mandate, overseeing corporate communications, government relations, sustainability and the Wal-Mart Foundation. It is in essence Wal-Mart’s chief image maker.

Mr. Bartlett replaces Leslie Dach, who announced his resignation in March. Mr. Dach, an ex-Clinton aide, helped create Wal-Mart’s sustainability push, its $4 generic drug program and its healthy food program after years in which Wal-Mart had been battered by politicians and the media. “What’s happened over the last several years, clearly here in the United States and around the world, it’s become easier to site a Walmart and we have become more accepted by the community,” Mr. Dach said last year, describing the effects of those programs on Wal-Mart’s business.

Under President Bush, Mr. Bartlett oversaw the White House press office and was an adviser on his campaigns for governor and president. More recently, Mr. Bartlett was chief executive of the United States division of Hill&Knowlton Strategies, a communications firm.

Nicolle Wallace, a Republican strategist who was White House communications director under Mr. Bartlett, described him as “low-key, very unflappable, he’s the ultimate team player.”

“He was just really excited about being part of a company that, while it has an image and an identity as just a giant corporate leader, it’s also very important in all the communities in which it exists,” she said. At the White House, “he operated at that intersection of public policy and communication and really confidential counsel to the executives.”

While his work in the White House, obviously, focused on a Republican agenda, “in the private sector he’s given advice to people of all political persuasions,” she said.

Today, Wal-Mart is facing several reputational issues. It was linked to garments produced at the building in Bangladesh that collapsed last month, killing more than 1,100 workers. Wal-Mart has declined to join other large retailers like H&M in a pact to improve safety standards in Bangladesh, instead saying it would pursue its own safety program.

Wal-Mart is being investigated by the Securities and Exchange Commission and the Justice Department on potential violations of the Foreign Corrupt Practices Act, and is also conducting an internal inquiry and compliance review. The New York Times reported last year that executives at the company’s Mexican subsidiary had bribed officials to smooth expansion, and that executives at the company’s headquarters had known about the bribes and declined to take action. In the most recent quarter, Wal-Mart spent $73 million on costs related to those reviews, much higher than the $40 million to $45 million it had expected to spend.

And Wal-Mart has faced issues in its stores, including slower-than-expected sales, problems in keeping shelves stocked and complaints from unions about how it treats workers.

Wal-Mart Hires Hill & Knowlton Executive

NEW YORK — Wal-Mart Stores Inc. named Dan Bartlett, most recently president and CEO of the U.S. arm of global business advisory firm Hill & Knowlton Strategies, as its new executive vice president of corporate affairs.

Bartlett has also served as a senior counselor to President George W. Bush. The 41-year-old succeeds Leslie Dach, who played an influential role in reinventing the image of the world's largest retailer in the face of mounting attacks by labor groups and other critics during his seven-year tenure. The company said in March that Dach, a former Democratic strategist, was leaving in June.

Bartlett will report to Mike Duke, Wal-Mart's president and CEO, and will serve as a member of the Bentonville, Ark., company's executive council.

"Corporate affairs play a strong role in helping us meet our business objectives at Wal-Mart," said Duke in a statement. "The team also helps us step up to the broader role we can play in meeting some of the biggest social challenges in the world today — issues like fighting hunger, job creation, sustainability, women's economic empowerment and the availability of healthier food."

Bartlett joins Wal-Mart at a time when it is grappling with allegations of bribery in its Mexico operations that surfaced a year ago as well as its treatment of its workers. Wal-Mart is also facing pressure to increase its oversight of factory conditions abroad following a building collapse last month in Bangladesh that killed more than 1,110 workers there. The tragedy, the deadliest incident in the history of the garment industry, came just months after a fire in another garment factory in Bangladesh in November killed 112 workers. Wal-Mart is the second largest buyer of Bangladesh clothing after Swedish fashion retailer H&M.

In a separate announcement, Hill & Knowlton Strategies announced that it has tapped Andy Weitz as president and CEO of its U.S. operations. Weitz is a five-year veteran of Hill & Knowlton Strategies and most recently served as executive vice president and global co-chair of its corporate advisory practice.

Wal-Mart's shares slipped 40 cents to $76.99 in afternoon trading.

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Wal-Mart and American Express Join In Prepaid Card Deal

It is a surprising alliance between the discounter Wal-Mart and American Express, which until recently has been focused on high-end consumers. The move is intended to strengthen both companies’ position in the prepaid card market — which, unlike credit and debit cards, is largely unregulated and has far fewer consumer protections.

The account, called Bluebird, will be available next week. The companies are positioning it as an option for people turned off by bank fees. “The only fees consumers will ever pay are clear, transparent and within their control,” such as out-of-network A.T.M. fees, the companies said in a release.

Wal-Mart and American Express declined to give details of the financial relationship between the two companies, but indicated both would profit from the card. The fees disclosed by the companies were generally lower than those Wal-Mart now charges for its prepaid MoneyCard.

Bluebird means prepaid card holders can have access to features that are usually associated with credit cards, like American Express’s customer service, roadside assistance and mobile banking. But consumer advocates say shoppers should be careful in the largely unregulated world of prepaid cards. The nation’s consumer financial watchdog, the Consumer Financial Protection Bureau, is preparing restrictions on prepaid debit cards. The agency says it has concerns about high fees and inadequate disclosures.

Advocacy groups have questioned whether prepaid card issuers clearly explain to cardholders the fees that come with products, including charges to activate the card, load money on it, check a balance at cash machines and speak to customer service. Consumer advocates have said that the cards, which are typically marketed to lower-income customers, have so many fees that they erode money loaded onto the card.

Prepaid cards work much like debit cards, except that they are not tied to a traditional, regulated bank account. The cards are part of a larger strategy by lenders to tap into the so-called unbanked or underbanked population — customers who use few, if any, bank services. Such people are considered a $45 billion market, according to the Center for Financial Services Innovation, which provides advisory services.

For the Bluebird account, customers can sign up free online or via mobile phone, or pay $5 in a Walmart store. They receive a card stamped with the American Express logo, which they can use anywhere American Express is accepted. They can set up direct deposit for paychecks and deposit other checks by taking a mobile phone picture of them. And they can withdraw cash. The companies do not perform a credit check before creating an account.

American Express and Wal-Mart said there would be no minimum balances to maintain, no monthly or annual fees and no overdraft fees (the account does not allow overdrafts, as it does not issue paper checks). It will cost $2 per out-of-network A.T.M. withdrawal, and $2 per withdrawal without direct deposit, but the companies did not disclose other fees as of now. Wal-Mart’s MoneyCard prepaid card costs $3 to buy, $3 a month and $3 to reload.

“We know that the model is financially sustainable for both partners,” said Daniel Eckert, vice president of financial services for Wal-Mart U.S.

David Robertson, publisher of The Nilson Report, an industry publication for payment systems, said companies in deals like this typically shared the amount charged to merchants when a card was used. He said he expected that Wal-Mart had negotiated a lower merchant-fee rate for card use at a Walmart than competitors would receive.

Mr. Robertson said Wal-Mart had most likely realized that its MoneyCard, run by the company Green Dot, was not appealing to all customers.

“This market is growing, and it’s moving beyond just that chunk of people that we consider to be underbanked,” he said. “It includes people who might be wanting to buy a prepaid card for other reasons, like budgeting purposes.”

Green Dot’s stock declined 20.2 percent on Monday, though Mr. Eckert said that Wal-Mart would continue to offer its MoneyCard.

Wal-Mart’s financial services plans were once more ambitious: to get a federal bank charter, meaning it could make loans and get deposits insured by the Federal Deposit Insurance Corporation. But there was opposition from the banking industry and politicians who were worried about small banks. Five years ago, Wal-Mart ceased trying to get a charter, and instead started building services that did not require a charter.

Lenders have been clamoring to grab a bigger piece of the booming prepaid card market. In 2009, consumers held roughly $29 billion on prepaid cards, according to the Mercator Advisory Group, a payments industry research group. By the end of 2013, that is expected to swell to $90 billion.

A number of the nation’s largest lenders, including JPMorgan Chase, U.S. Bank, Regions Financial and Wells Fargo, are aggressively rolling out prepaid card offerings.

One incentive for banks to dive in is that prepaid cards are not restricted by the Dodd-Frank financial regulation law. Thanks to the exemption from Dodd-Frank, banks can charge merchants high fees when a consumer swipes a prepaid card. A recent study by Pew, a nonprofit research group, also indicated that some customers were unaware their prepaid cards were not necessarily protected by the F.D.I.C.

Dan Schulman, group president of enterprise growth for American Express, said in a call with reporters that Bluebird was not F.D.I.C.-backed, but that under money-transmittal regulations, American Express was required to hold assets to back up 100 percent of the money in accounts.

Prepaid cards have increasingly come under fire from regulators. Last month, the Office of the Comptroller of the Currency brought an action against Urban Trust Bank in Orlando, Fla., which has branches in Walmart stores. The regulator said it discovered “unsafe and unsound banking practices” related to the community bank’s prepaid card offerings.

Walmart Workers in California Protest

The strikers, who union officials said came from nine Walmarts in the Los Angeles area, said they were mainly protesting what they said was management’s frequent retaliation against employees who spoke up about working conditions.

Several of the workers, who said this was the first-ever strike against Walmart in the United States, also said they were protesting low wages and short hours.

Manuela Rosales, 25, who works in the cellphone department of the Pico Rivera store, said she walked out on Thursday, missing her afternoon shift, because “when we speak out, they cut my hours in retaliation and they have me pull pallets, which is very hard work.” She added, “I’m a single mom and I can’t afford them cutting my hours.”

Ms. Rosales said that about 30 of the 100 or so workers from her store’s morning shift walked out on Thursday.

Walmart, the nation’s largest retailer, sought to play down the job action, with a company spokesman saying it was a mere rally and not a real strike.

“You can count on less than one hand the number of associates that we are aware of who left their post to participate in the rally,” said Dan Fogleman, the Walmart spokesman. “That’s very few when you consider the more than 12,000 people that we employ in L.A. County.”

The rally outside the Pico Rivera store was boisterous, with workers carrying signs that read, “Stand up, live better,” and “On strike for the freedom to speak out.” The workers, who are not unionized, maintained that they were striking against unfair labor practices, specifically illegal retaliation, a claim that could protect them from being punished for walking out.

The walkout and rally were organized by Organization United for Respect at Walmart, or OUR Walmart, a group of several thousand Walmart workers that is closely affiliated with the United Food and Commercial Workers Union.

Dawn Le, a union spokeswoman, said 71 Walmart workers who were scheduled to work Thursday signed in to show participation in the strike and rally.

The rally attracted several prominent supporters, including Charles Calderon, majority leader of the California State Assembly; the Rev. Eric P. Lee, president of the Los Angeles chapter of the Southern Christian Leadership Conference; and María Elena Durazo, executive secretary-treasurer of the Los Angeles County Federation of Labor.

“Nobody is going to stop us from speaking out,” Ms. Durazo said. “Walmart may sell jeans and video games and all that, but the biggest product they sell in this country and this world is poverty.”

Mr. Fogleman said the rally was just the union’s “ latest publicity stunt.”

“Our stores in the community are staffed up and open for business,” he said. “This event is not a factor.”

Mr. Fogleman also denied that this was the first strike against Walmart in the United States, pointing to a 2006 protest by 100 workers at a store in Hialeah Gardens, Fla.

Thursday’s walkout occurred three weeks after several dozen employees at warehouses that serve Walmart walked off the job in California and Illinois to protest what they said were onerous conditions, including toiling in warehouses that they said sometimes heat up to 120 degrees. The California job action included a 50-mile, six-day march by warehouse workers from Ontario, Calif., to Los Angeles City Hall.

Mr. Fogleman said Walmart does not manage those warehouses but takes accusations of workplace problems very seriously. He said Walmart has sent people to those warehouses, and any legitimate problems have been addressed.