The Chicago City Council, over the objections of its Mayor, adopted a “living wage” ordinance that requires large stores, such as Target, Wal-Mart, Lowe’s and Home Depot, to pay a starting wage of $10 an hour, with at least $3 an hour worth of benefits. The ordinance is designed to lift the value of big box jobs in the city. The wage and benefit requirements apply to all retail stores in excess of 90,000 s.f. and which are part of a company that has gross sales of more than $1 billion a year. The latter provision was included to allow smaller companies with only a handful of stores to escape the provisions of the ordinance. The City Council vote was 35-14, enough to override a Mayoral veto, and came after more than four hours of debate. “This is a great day for the working men and women of Chicago,” said Alderman Joseph A. Moore, the lead sponsor of the bill. Wal-Mart’s corporate spokesman had a predictable response: “It’s sad – this puts politics ahead of working men and women. It means that Chicago is closed to business.” Wal-Mart will soon open its first store on the west side of Chicago, but the retailer warned that its future plans for the metro area “will likely change… We’d redirect our focus on our suburban strategy and
see how we could better serve our city of Chicago residents from suburban Chicagoland.” But one southside priest told the Associated Press, “They’re not going to leave; they’re too greedy.” This is the same tactic Wal-Mart used in Maryland, when legislators there passed a health care benefits bill affecting big boxes. Wal-Mart threatened to stop work on a distribution center, but never halted anything. In the interim, a federal court struck down the health benefit law in Maryland, and further litigation on the Maryland measure is anticipated. Wal-Mart says that its stores in the Chicago suburbs pay an average of $11 per hour, but starting wages can be as low as $7.25 an hour. But such figures are not based on independently audited analyses. The Illinois Retail Merchants Association has indicated it will challenge the ordinance in court on the basis that the ordinance violates equal protection rights in the Constitution, and Mayor Daley had said that the ordinance will impede growth and tax revenues. Supporters say there is plenty of legal precedence for imposing minimum wages by different sizes of business. Other retailers also weighed in before the vote. Target warned that they would cancel or delay three stores planned for the South Side. Alderman George Cardenas, who voted for the ordinance, told the Chicago Tribune, “We had to make a stand. This is good for people and good for the country.” Under the new ordinance, the minimum wage in covered stores would rise to $9.25 in 2007 and to $10 in 2010, and be indexed to inflation after that. Benefits would have to total $1.50 an hour in 2007 and $3 in 2010. There are roughly three dozen stores now in Chicago that would be affected by the new ordinance.
“We don’t want any organization to come on into our communities and make money without treating our people fairly,” one local religious leader told the Associated Press. For earlier stories, search Newsflash by “wage” and “Chicago.” For a copy of the living wage proposal, contact [email protected]