Mayor Richard Daley vetoed an ordinance Monday that would have required mega-retailers to pay their workers higher wages after some of the nation’s largest store operators warned the measure would keep them from opening their doors within the city’s limits.
Supporters said the measure would guarantee employees a “living wage,” but in a letter to City Council members released Monday, Daley said the ordinance would drive businesses from Chicago.
“I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage,” Daley wrote. “But I do not believe that this ordinance, well intentioned as it may be, would achieve that end.”
The veto was Daley’s first in 17 years in office, and will likely set up a showdown during Wednesday’s council meeting.
The ordinance was approved by the council in late July and requires so-called “big box” stores to pay workers at least $10 an hour plus $3 in fringe benefits by mid-2010. The rules would only apply to companies with more than $1 billion in annual sales and stores of at least 90,000 square feet.
The minimum wage in Illinois is $6.50 an hour and the federal minimum is $5.15.
Chicago has been at the epicenter of a debate about the wages at large retailers ever since the city rejected a proposal by Wal-Mart Stores Inc. to open a store on the South Side, prompting the company to open a store just outside the city limits.
It takes 34 votes to override a mayoral veto. The measure passed 35-14, but some aldermen have since indicated they might be open to changing their votes and acting against the ordinance.
Alderman Shirley Coleman, who voted in favor of the ordinance in July, said she will switch her vote after receiving assurances from Wal-Mart that the company would build a store in her ward.
“I am doing what constituents are telling me is best for our community,” she said. “They’re tired of going out to the suburbs to shop at Wal-Mart.”
Wal-Mart spokesman David Tovar said the world’s biggest retailer is eyeing “many different sites throughout the Chicagoland area,” but hasn’t confirmed any new locations.
The veto drew quick praise from corporations that oppose the measure.
Wal-Mart’s Tovar called Daley’s decision a “victory” for working families.
The Bentonville, Ark.-based company plans to open its first Chicago store in the coming weeks on the city’s west side.
Plans for a 445,000-square-foot shopping center featuring Target on the city’s South Side remain on hold, said Eric Salcido, project manager for the development company Primestor.
“I think it’s a positive sign,” for the kinds of large stores that anchor shopping centers, he said. “This is what they were hoping for.”
In a statement, Minneapolis-based Target Corp. said the living wage ordinance was part of an “extreme agenda being promoted by special interest groups.”
“The ordinance would have discouraged new retail development in Chicago communities needing it most by driving up the cost of doing business,” the statement said.
Jennifer Smith, a Lowe’s Cos. spokeswoman, said the Mooresville, N.C.-based home improvement retailer thought the mayor’s veto will create a more “business friendly” environment in Chicago. The company opened its first store in Chicago’s city limits last year. She said Lowe’s felt the ordinance “was unfair and created an unfair playing field.”
Meanwhile, proponents of the living wage measure said they wouldn’t give up the fight.
“No American, other than Mayor Daley and the folks at Wal-Mart, believe it’s right for corporations to make billions while their workers get paid poverty-level wages and live without affordable health care,” said Chris Kofinis, a spokesman for union-affiliated advocacy group WakeUpWalMart.com.
Alderman Joe Moore said arguments that such ordinances drive jobs and desperately needed development from some of the city’s poorest neighborhoods are untrue.
“The experience of other cities that have done living wage ordinances, is that they help create more jobs and lead to more business development, not less,” he said.
Other cities with living-wage laws include Santa Fe and Albuquerque in New Mexico, San Francisco and Washington D.C.