Other Notable Newsmakers

By Jeremy Smerd

Dec. 29, 2006

Susan Chambers

Chicago’s mayor went 18 years without using his veto power—until September 12. Daley’s first veto quashed the city’s “big box” law, which would have required large employers to pay a minimum wage of at least $10 an hour plus $3 an hour in benefits by 2010. (Sponsors said big-box retailers were selected because, as corporations with more than $1 billion in profit in 2005, they were deemed best able to absorb increased labor costs. ) The veto paved the way for Wal-Mart’s entry into the city. It also became a sign of the tension regarding efforts to increase minimum wages. In remarks announcing his veto, Daley called on the U.S. government to increase the federal minimum wage so cities would not be compelled to act unilaterally on the issue and risk losing large employers. A few weeks later, the first Chicago Wal-Mart opened, attracting thousands of job applicants and customers alike. The Bentonville, Arkansas, company has since made plans to open five supercenter stores in the city. It so happens that the sites being considered for the new stores fall in the neighborhoods represented by the elected officials who promised Daley they would not override his veto.

Mitt Romney

The Massachusetts governor showed it was possible to pass a law this year mandating health insurance coverage with the support of large employers, not in spite of them. Romney, whose hopes as a Republican presidential candidate will rest largely on the bipartisan health care legislation he signed in April, did so by shifting the responsibility for coverage from employers to individuals. This appealed to the philosophical and fiscal sense of big business. Employers already struggling with high health care costs would not have to pay more if they already provided health insurance to their employees, and a mandate requiring individuals to obtain health insurance would have the added benefit of spreading risk and, theoretically, slowing the escalation of premiums. Companies and state legislators hope that universal coverage and higher Medicaid reimbursement rates for doctors and hospitals will lower insurance costs for everyone. But until the law takes effect in January, that hope remains a hypothesis. Romney, though, has ushered in a new paradigm in health care policy. With the blessing of large employers, it is now being looked at in Vermont, Maryland and elsewhere.

Andy Stern

The promise of a pay raise and health benefits won by Houston janitors after walking the picket lines for nearly four weeks this fall was a victory for workers. But it also was a crucial win for Stern, president of the Service Employees International Union and the leader behind the effort to reform the labor movement. Stern led a group of five insurgent unions that broke away from the AFL-CIO last year in the belief that a new coalition was needed to revitalize the labor movement. The new group said it would focus on immigrant workers in low-paying service industries rather than the high-paying manufacturing jobs of the Rust Belt. The coalition was named Change to Win, but critics said the group was more style than substance. The victory in Houston, however, was the largest in a string of contracts won this year by the 1.8 million-member SEIU. In addition to increasing the SEIU’s rank and file by as much as 5,300 people, the strike vindicated Stern’s ability to breathe new life into a labor movement whose membership as a percentage of American workers remains at an all-time low. “Employers need to ask not ‘How do we pay less?’ ” Stern has said, “but ‘How are workers going to be valued in the future?’ “

Workforce Management, December 11, 2006, p. 25Subscribe Now!

Jeremy Smerd writes for Crain’s New York Business, a sister publication of Workforce Management.

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