Walmart Closes LA Store Over $15 Minimum Wage

Walmart L.A. (Nick Ut / Associated Press)
Nick Ut / Associated Press

Los Angeles residents of impoverished Chinatown were shocked to learn on January 17 that the Walmart they pleaded for years to get would be shut down at 7 p.m. Sunday evening due to the city’s new $15 minimum wage ordinance, and union harassment.

(Update: The closure was described by the company as one of 154 closures “that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans.”)

Immigrant Hispanic and Asian residents of central Los Angeles campaigned for years for a “big box” retailer to locate in their economically depressed neighborhood to compete against liquor stores that sold a limited number of food items at very high prices. In September 2013, Walmart finally opened a 33,000-square-foot grocery and drug store in the Chinatown area.

Crowds flocked to the store for lower food costs, substantially cheaper pharmaceuticals, and even ethnic offerings. But labor leaders immediately started protesting against the store for refusing to unionize, even though 100 Walmart employees refused to sign union cards.

During the November 2014 Black Friday protests in downtown Los Angeles led by the union-funded Movement Generation’s Justice and Ecology Project, thousands of protestors were bused in to protest against Walmart destroying downtown, even though the company only had the one store in Chinatown.

According to Movement organizer Brooke Anderson, “As people deeply committed to environmental and climate justice, we condemn Walmart as a climate criminal and we stand side-by-side with Walmart’s workers organizing for $15 per hour, full time work, and the respect they deserve.”

During last summer’s union-led “Fight For 15” minimum wage movement in Los Angeles, Walmart was demonized on giant banners proclaiming, “Walmart Wages War on Workers” and “Walmart Wages War on Planet Earth.”

But after succeeding in pushing through a minimum wage that was set to start on January 1 at $10 an hour and jump in steps to $15 in 2018, unions and liberals have begun to panic that spiking wages might actually cause the 15 percent rate of unemployment among those with a high school diploma or less to rise.

The non-partisan Congressional Budget Office’s most recent in-depth analysis on minimum wage hikes estimated that President Obama’s proposed federal minimum wage increase from $7.25 to $10 an hour would raise wages for 16 to 24 million people, but would also kill 500,000 existing jobs.

Liberals piously called this negative impact a “reasonable tradeoff worth embracing,” whereas conservatives and business owners called it proof that risky government interference would destroy jobs and put more people on welfare. But there are no independent studies of what a 50 percent, let alone 100 percent increase would do.

Furthermore, Walmart’s closure in Los Angeles means that shoppers will still be able to go to neighboring cities to shop at Walmart, taking sales tax payments away from LA.

Breitbart News reported in late July that local union bosses want their locals exempted from the law, since businesses were already making plans to cut employee head count.

The same month, McDonald’s opened its first robotic restaurant in Phoenix, and hotels in L.A. announced they were planning to reduce guests’ daily room cleaning, or charging extra for doing so.

Private sector union membership has plummeted from almost 40 percent of the workforce in the 1960s to a new low of 6.6 percent in 2015.

The “Fight for 15” sounded like a great social justice strategy to leverage liberals’ concern for the plight of the poor into a huge union organizing play.

But the downtown L.A. Walmart’s sudden closure is just the first of what seems destined to be a huge negative blowback that will hurt poor consumers and workers.


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