Chicago Big-Box Law Rejected; Proponents Look to Election

When Chicago Mayor Richard M. Daley killed an ordinance that would mandate wage levels at large local retailers and had his veto upheld by the largely Democratic City Council in early September, it marked a victory for businesses like Wal-Mart and Target.

But community groups that pushed the measure vow to keep fighting as the city moves toward municipal elections in February. Their determination should send a signal to corporations that are in the cross hairs, according to one expert.

“We’re still in the first or second inning with this,” says Mike Flynn, legislative director at the Employment Policies Institute, a Washington, D.C., think tank that studies entry-level employment. “Business still thinks it is about the wage rather than recognizing that it is a political movement.”

On September 11, Daley scuttled an ordinance that would require large retailers to pay their employees $10 an hour and provide fringe benefits of at least $3 per hour by 2010. Daley, who exercised his first veto in 17 years, argued such a law would drive stores to the suburbs.

The ordinance passed the council 35-14 on July 26. But a veto override, which would have required 34 votes, fell short by three votes September 13.

While anti-Wal-Mart sentiment is quiescent on Capitol Hill, unions are targeting state legislatures and city councils to promote health care and wage standards for a company that has resisted organized labor.

“They’re trying to do through government mandate what they can’t do in the marketplace,” Flynn says.

Working at the local level helps galvanize the movement. “If you want the policy, you go to Washington,” he says. “If you want the politics, you focus on the cities and the neighborhoods.”

The proponents of the so-called big-box wage ordinance, heartened by the close council vote, say their message is resonating.

Now they have their sights set on February, when the City Council and Daley are up for re-election. Daley, whose administration has been stung by scandal allegations, may face his biggest challenge since being elected in April 1989. One of his potential foes, Democratic U.S. Rep. Jesse Jackson Jr., has come out in favor of the wage ordinance.

“It’s going to be a defining issue in these local campaigns,” says Ken Snyder, coordinator of the Grassroots Collaborative, a group of 35 organizations backing the wage ordinance.

Snyder says that when Wal-Mart and other big retailers pay low wages, they’re essentially making the government pick up health care and living expenses for their employees. “The reality is, they’re getting massive taxpayer subsidies,” he says.

A Chicago employment lawyer disputes that assessment.

“You don’t see Wal-Mart employees complaining about what they have,” says Jim Hendricks, a partner at Fisher & Phillips. “If they wanted to organize, they would. It’s not that difficult.”

Hendricks praised Daley, saying the mayor has his finger on the pulse of the neighborhoods. “There are people in the city who are crying for these jobs,” he says. “I applaud what he did.”

Companies don’t clap when wage floors are instituted, but they usually aren’t hurt either, according to Flynn. But people entering the workforce are set back, he says.

Flynn cited an EPI-commissioned study of a Santa Fe, New Mexico, living-wage ordinance that found that the city’s unemployment rate increased by 16 percent following the law’s passage. “Every one of those jobs lost was held by someone with a high school education or less,” he says.

—Mark Schoeff Jr.