Chicago council votes to require higher pay at `big box' stores

Wage rule singles out large retailers

July 27, 2006|By NEW YORK TIMES NEWS SERVICE

After months of fevered lobbying and bitter debate, the Chicago City Council passed a groundbreaking ordinance yesterday requiring "big box" stores, such as Wal-Mart and Home Depot, to pay a minimum wage of $10 an hour by 2010, along with at least $3 an hour worth of benefits.

The ordinance, imposing the requirement on stores that occupy more than 90,000 square feet and are part of companies grossing more than $1 billion annually, is the first in the country to single out large retailers for wage rules.

A gallery packed with supporters broke into cheers as the measure passed, 35-14, after four hours of speeches and debate.

"This is a great day for the working men and women of Chicago," said Alderman Joseph Moore, the measure's chief sponsor. Moore said he had had inquiries about the ordinance from officials in several other cities.

Wal-Mart's response was swift and blunt. "It's sad - this puts politics ahead of working men and women," spokesman John Simley said in a telephone interview. "It means that Chicago is closed to business."

Wal-Mart will still open its nearly completed branch on Chicago's West Side in September - the company's first store in the city - but any future plans "will likely change," Simley said.

With this ordinance, Chicago has opened a contentious front in the growing national movement, led by labor and poverty groups, to raise the incomes of bottom-rung workers through local minimum wage and "living wage" laws. Some economists say such laws will only stifle development and deprive consumers of access to inexpensive goods, but many poverty experts say that local efforts elsewhere to raise minimum wages have not choked off growth and that the expanding, low-paying retail sector can be safely pushed to aid the working poor.

"We're very confident that retailers want and need to be in Chicago, and the question for the city is what kinds of jobs they will bring," said Annette Bernhardt of the Brennan Center for Justice at the New York University Law School, which helped to draft the Chicago law and has done economic studies of its likely impact.

The Illinois Retail Merchants Association condemned the measure as likely to hamper job creation and a form of illegal discrimination, and said it would challenge the ordinance in court.

The measure was opposed by Mayor Richard M. Daley, who said it could impede growth and tax revenues. He did not say whether he would veto the ordinance, but he would have to recruit two aldermen to switch their votes to avoid an override.

Some politicians and residents in neighborhoods where Wal-Mart, Target or Home Depot stores are planned also spoke out against it, fearing a loss of jobs.

In a meeting with several black aldermen, Target officials warned that passage of the measure could cause it to cancel or delay three stores planned for the city's South Side, the aldermen told reporters.

Yet the proposal had strong appeal for voters.

"The working people were overwhelmingly in favor of this law, and this was conveyed to the aldermen," said Madeline Talbott, chief organizer for Acorn, a community group that helped lead a campaign that included telephone banks and house-to-house canvassing.

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