This week, Chicago Mayor Richard Daley vetoed legislation that would have forced large companies to pay their workers a living wage. According to Wal-Mart, the wage law would not have affected them anyway. The Chicago City Council failed to raise enough votes to override the Mayor’s veto, and so the new law was defeated. Here is the press release from the Brennan Center for Justice at the New York University School of Law, which helped draft the bill. ” Mayor Richard Daley, in his first veto in his seventeen years as Mayor of the City of Chicago, rejected a new ordinance requiring large retailers in the city to pay their employees a living wage. The proposal would have been the first of its type in the nation, and would have raised pay for tens of thousands of workers at large retailers such as Wal-Mart, Target, Toys R Us, Lowe’s and Home Depot. The City Council voted 31-to-18 to over-ride his veto, coming 3 votes shy of the necessary two-thirds needed to override. “Working families in Chicago understand that this law is about bringing living wage jobs to their communities,” said Paul Sonn, deputy director of the Poverty Program at the Brennan Center. “It’s unfortunate that politics trumped the needs of the city in this first round, especially when 71% of residents support the measure,” continued Sonn. “Cities across the country are facing growing numbers of working poor in their communities, and a key part of the problem is low-wage retail jobs,” said Annette Bernhardt, deputy director of the Poverty Program at the Brennan Center. “There is no question that Chicago and other cities will continue to pursue strategies like this one in order to ensure that economic development delivers good jobs for their residents.” The grassroots campaign for the law was led by Chicago’s Grassroots Collaborative and ACORN, and includes a broad coalition of labor, anti-poverty and faith community groups. The living wage law would have asked large retailers with sales of $1 billion or more operating stores larger than 90,000 square feet in Chicago to pay a living wage and contribute an additional amount for benefits or supplemental wages. The living wage would start at $9.25 an hour in 2007, and phase up to $10.00 by 2010. The supplement would start at $1.50 an hour in 2007, and phase up to $3.00 by 2010. In assessing the likely impact of the law on the local economy, advocates took their cue from the experience of other cities. In Santa Fe, Wal-Mart, Target and Sam’s Club quickly adapted to paying the city’s living wage of $9.50, and Wal-Mart, Lowe’s and Kohl’s are all opening new stores in the city. In San Francisco, the Home Depot recently agreed to adopt a starting wage of $10.75 an hour in opening its first store in the city. Leading
retailer Costco already pays all of its employees nationwide a living wage of $10 per hour plus health benefits. “Local wage laws have generally been upheld when challenged in court,” explained Sonn. “In 2005, the Brennan Center successfully defended Santa Fe’s wage ordinance in court. Just last month a federal court in California upheld a local wage law similar to the Chicago proposal.”
As of August 2006, Wal-Mart had 45,425 employees in Illinois. The company claims that the average wage for regular, full-time hourly Wal-Mart workers in Illinois is $10.41 per hour — 12.5% higher than the minimum hourly wage in the Chicago bill. Therefore, based on Wal-Mart’s unverified wage rates, the Chicago law would not have affected the company. After the Mayor’s veto, Wal-Mart released a statement that said, “This is a great day for the citizens of Chicago. The city council’s action to sustain the mayor’s veto will ensure more jobs, more convenience and more choice for Chicago’s working families. This opens the door for desperately-needed business investment and development in the city, with job opportunities and savings for those who need it most. We will open our first store in the city on Chicago’s west side later this month. This store will show what a great asset Wal-Mart can be to the community, as an employer and corporate citizen, and as an affordable resource for thousands of Chicago’s working families. We commend Mayor Daley for vetoing the ordinance and the city council for sustaining the veto to ensure more jobs, more savings and more economic development opportunities for all Chicagoans. ” In August, Wal-Mart announced that it was raising the starting rate in more than 1,200 Wal-Mart stores and Sam’s Clubs throughout the country. The company did not reveal what those “starting rates” are, only that “Wal-Mart pays competitive wages.” But if Wal-Mart wages are above the “living wage” levels set in the Chicago law, then why did Wal-Mart work so hard to lobby against it? Based on Wal-Mart’s self-described wages, the Chicago law wouldn’t have cost them a penny for years to come. Wal-Mart would only lobby aggressively to stop the Chicago law if it thought it would affect their operating costs. So either the company’s wage data is misleading, or the company likes to spend money fighting causes that don’t affect them. For earlier stories, search by “wages.”
