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Big retailers battling minimum-wage increase

Published Aug 21, 2006 10:51 PM

Despite fierce opposition from the retail industry and Chicago’s Democratic mayor, the Chicago City Council on July 26 voted to require large chain stores to pay higher wages and health benefits. The “Big Box” ordinance covers over 40 stores in big chains such as Target, Home Depot, and Wal-Mart (which will open its first Chicago store soon), with an estimated total of 10,000 workers, or about one of every eight retail sales workers in the city.

The bill passed by a 35-14 vote, which would be one vote more than enough to sustain it if Mayor Richard Daley decides to veto it. But now, the big chains have opened a campaign of economic reprisal against Chicago’s poorest communities. Both Target and Lowe’s have suspended plans to build stores in the Black community. The purpose is to pressure aldermen to change sides, so that when Daley does veto the ordinance, his veto will be sustained.

If that doesn’t work, the Illinois Retail Merchants’ Association has threatened to challenge the ordinance in the state courts.

Under the new law, beginning in July 2007, stores of 90,000 square feet or more owned by companies with $1 billion or more in annual sales must pay workers (including part-time workers) at least $9.25 an hour plus $1.25 an hour in benefits, increasing to $10 plus $3 in benefits in 2010. Many of these large chains now provide no health benefits at all, especially for part-time work, and pay as little as $6.50 per hour.

Similar laws have been passed in Santa Fe and Albuquerque, N.M.; in San Francisco; and in Washington, DC.

The bill was initiated in 2004 by the Grassroots Collaborative, an alliance of ten community and labor organizations, and the Living Wage Coalition, which swelled to over thirty members in support of the bill. It included community organizations such as Chicago ACORN and the Chicago Coalition for the Homeless, churches, the Chicago Federation of Labor, and unions, including the United Food and Commercial Workers, the Service Employees International Union, and UNITE/HERE. Volunteers staged rallies and vigils, knocked on doors, and kept up the pressure on members of the council up until the day of the vote.

Chains try to intimidate Chicago’s poor

The chains warned that they would abandon Chicago if the bill were passed, and recruited ministers and community groups in the poorest and most oppressed areas of the city to campaign against it. Attempting to mobilize the poor and unemployed against the bill, they vilified proponents as “robbing people of jobs” at a press conference with Mayor Daley two days before the vote.

According to a report in the Chicago Defender, organizers for The Woodlawn Organization, which opposed the ordinance, packed a media event against the bill by distributing a leaflet at the Ickes Homes housing project reading, “Do you want a job at Wal-Mart?” and telling people to bring their résumés.

Council member Emma Mitts, whose poor and Black community on the West Side is the site of Chicago’s first Wal-Mart, told the media, “You have to make them come in and give a wage before you raise it to a living wage.” Of course, this argument for a “sub-living wage” is an argument against any minimum wage at all; it pits all the workers and unemployed against each other in a contest of who is most desperate and will work for the least.

However, an economic analysis of the bill, available on the AFL-CIO website, paints a different picture. While the bill is estimated to provide $68.4 million per year in additional wages and benefits, this is only about two percent of the estimated $3.2 billion a year in sales that the workers at those stores generate.

The chains have now threatened to punish the neighborhoods whose aldermen and women voted for the bill, and locate stores only where they voted against the wage increase, or else suspend new construction entirely. In noisy media announcements, Lowe’s announced that it would not sign leases on property on the South and Southwest side; Target claimed it would suspend plans for stores at 119th and Marshfield and in Uptown; and Wal-Mart said it was putting plans for 20 Chicago stores “on hold.”

Supporters of the ordinance have denounced these threats, which have been orchestrated with City Hall. On Aug. 7, the Living Wage Coalition issued a report blasting Target’s action, pointing out that it has taken $10 million in “tax incentive” subsidies for its Chicago stores and now isn’t even willing to pay a living wage.

The problems of the poor and unemployed in Chicago are very real, particularly in the Black and [email protected] communities. As the struggle to defend the ordinance continues, it is also high time to deliver wages, benefits, and jobs programs for the hundreds of thousands of workers and unemployed people in Chicago who are not covered by this bill.