In a letter sent to City Council Chairman Phil Mendelson, DC Mayor Vince Gray (D) announced his veto of a living wage bill aimed at large employers on Thursday morning.

The bill would require retailers with $1 billion in sales or more with 75,000 square feet or larger to pay employees $12.50 an hour in combined wages and benefits with an exception for those that collectively bargain with workers. The existing minimum wage in the city is $8.25 an hour, and increasing the wage to $12.50 would raise annual earnings of a full-time minimum wage worker from about $17,000 to $26,000.

Just ahead of a City Council vote to pass the bill, mega retailer Walmart threatened to walk away from three planned stores if the law were put into effect. The company claims that the bill is “arbitrary and discriminatory.” With Gray’s veto, Walmart released a statement saying, “Now that this discriminatory legislation is behind us, we will move forward on our first stores in our nation’s capital,” according to the Washington City Paper. Other stores like Costco, Home Depot, Target, and Macy’s would also have been impacted by the bill, but the increase in the minimum wage would have been particularly dramatic for Walmart, which pays workers 28 percent less on average than other retailers.

Walmart is used to getting its way on minimum wage bills. Seven years ago, it made the same threat to abandon plans to open stores in Chicago after the city passed a similar law, prompting the mayor to veto it. Yet its promise to both cities that opening stores will create jobs isn’t likely to pan out. In Chicago, evidence shows that it destroys as many jobs as it creates and doesn’t end up stimulating local businesses. Read on...

Here's more from the Washington Post: D.C. Mayor Gray vetoes ‘living wage’ bill aimed at Wal-Mart, setting up decisive council vote:

Gray’s quandary is playing out in many U.S. cities, where local leaders who generally sympathize with worker causes are also eager to lure jobs and commerce for their constituents. Retailers, most notably Wal-Mart, have placed an increasing focus on urban expansion, while unions and advocates for workers have pushed measures like the District’s “living wage” bill as a valuable hedge against the proliferation of low-paying jobs.

The veto, which is unlikely to be overridden by the D.C. Council, clears the way for Wal-Mart to continue its entry into the District — plans years in the making that were thrown into question after lawmakers embraced the wage proposal this year. [...]

In the letter, Gray said the measure was “not a true living-wage bill,” because its effect would be limited to “a small fraction of the District’s workforce.” He called the bill a “job-killer,” citing threats from Wal-Mart and other retailers that they would not locate in the city if the bill becomes law.

“If I were to sign this bill into law, it would do nothing but hinder our ability to create jobs, drive away retailers, and set us back on the path to prosperity for all,” he said.

In an interview, Gray did not say what minimum wage he would seek, except that any increase would be “reasonable” and would come after consultation with lawmakers and interested parties.