Chicago ordinance takes on big-box retailers

Chicago Considers Mandatory "Living Wage" For Workers
Chicago is considering an ordinance that would require any company operating a store over 90,000 square feet with annual sales topping $1 billion, such as Home Depot and Wal-Mart, to pay its employees a "living wage" of at least  $10 an hour plus $3 an hour in benefits.Tim Boyle / Getty Images
/ Source: The Associated Press

Brushing aside warnings from Wal-Mart Stores Inc., the City Council in Chicago has approved an ordinance that makes the city the biggest in the nation to require big-box retailers to pay a “living wage.”

The ordinance, which passed 35-14 Wednesday after three hours of impassioned debate, requires mega-retailers to pay wages of at least $10 an hour plus $3 in fringe benefits by mid-2010. It would only apply to companies with more than $1 billion in annual sales and stores of at least 90,000 square feet.

“It’s trying to get the largest companies in America to pay decent wages,” Alderman Toni Preckwinkle said.

The minimum wage in Illinois is $6.50 an hour and the federal minimum is $5.15.

Mayor Richard M. Daley and others warned the living wage proposal would drive jobs and desperately needed development from some of the city’s poorest neighborhoods and lead giants like Wal-Mart to abandon the city.

He hasn’t indicated whether he will veto the measure; it takes 34 votes to override a veto.

“This [ordinance] imposes special interest mandates that will unfairly deny savings and job opportunities to those who need them most,” Michael Lewis, Wal-Mart’s senior vice president of store operations, said in a statement. “It’s wrong for the City Council to tell the people of Chicago where to shop and to make it harder for inner-city residents to find jobs.”

Wal-Mart spokesman John Bisio said earlier that if the measure passed, “We’d redirect our focus on our suburban strategy and see how we could better serve our city of Chicago residents from suburban Chicagoland.”

Some aldermen also warned that Target Corp. might rethink its presence in the city — though the Minneapolis-based company has not discussed the issue.

“What you’ve got to do is help the economy, not hurt the economy,” said Alderman Bernard Stone, who voted against the measure.

Other cities with living-wage laws include Santa Fe and Albuquerque in New Mexico; San Francisco; and Washington.

Chicago has been at the center of the debate about the wages at big retailers ever since the city’s rejection of a proposal by Wal-Mart to open a store on the South Side prompted the company to open a store just outside the city limits.

The first Wal-Mart in Chicago itself is set to open in September, and the Bentonville, Ark.-based company has more than 40 other stores within 50 miles of the city.

Wal-Mart said that its average hourly wage is almost $11 an hour in the Chicago area and that the lowest wage that will be paid at the new West Side store will be $7.25 an hour.

Jerry Roper, president of the Chicagoland Chamber of Commerce, said he expects retailers to challenge the ordinance in court.

“The aldermen who voted in support of this ... helped put the sign up really big that development in Chicago is dead,” Roper said.