Chicago Un-Bans Big Boxes
Sep 13, 2006 3:59 PM, Elaine Misonzhnik
Faced with threats of boycotts by both Target and Wal-Mart, Chicago has backed away from a plan that would have mandated a "living wage" for employees of big box stores. On Wednesday, the city council voted to sustain Mayor Richard M. Daley's Sept. 11 veto of legislation that would force companies that have more than $1 billion in annual revenue and which operate stores larger than 90,000 square feet in Chicago to pay employees at least $13 an hour in wages and benefits by 2010.
ACORN, a nation-wide advocacy organization for low- and moderate-income families and the backer of the measure, did not return calls for comment, but the organization's website posted this statement by the group's Chicago community leader Toni Foulkes:
"The Mayor did the wrong thing by our communities when he bent to pressure from big money interests from out of town," Foulkes said. "We want the Aldermen on the City Council to stand up for their neighborhoods and override this veto, so we can have jobs with fairness and dignity in our communities."
Retail operators, on the other hand, were thrilled. Wal-Mart, which previously threatened to pull the plug on 20 outlet centers it planned to build in Chicago, said the veto would allow further business investment in the community.
"The Mayor's action encourages desperately-needed business investment and development in the city, with job opportunities and savings for those who need it most," said Michael Lewis, senior vice president of store operations and president of Midwest division with Wal-Mart, in an official statement.
Wal-Mart is scheduled to open its first store in Chicago, on the city's West Side, this September. Target and Lowe's, who followed Wal-Mart's lead in threatening to take Chicago projects off the drawing board, did not return calls for comment. Target is supposed to serve as the anchor for a $90 million shopping center on Marshfield Avenue and the $113 million retail project at Wilson Yard. Lowe's was planning two new stores in Chicago. Both retailers already have some presence in the city.
But while the veto is a setback for the union-backed effort to force non-union big-box retailers to provide higher compensation, the movement is not dead. As big box retailers continue to target urban markets for growth, the fight may be replayed again and again, according to Annette Bernhardt, deputy director of the poverty program at the Brennan Center for Justice at New York University School of Law. Wal-Mart has faced stiff opposition from both the New York City Council and community groups such as Wal-Mart Watch in its on-again/off-again search for a New York foothold. And elected officials in Washington D.C. and Orlando, Fla., are also discussing living wage laws.
Chicago, which passed the ordinance in July, was not the first city to consider living wage legislation. In fact, 140 municipalities in the U.S. have already adopted such laws, according to the University of Massachusetts-Amherst's Political Economy Research Institute. The difference is that Chicago is the first city to date to have passed a ban targeting big box retailers. The issue is such a political hot potato, in fact, that Daley's veto was his first in 17 years in office. He said the measure would hurt the city's poorest residents.
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