Thursday, July 27, 2006

'Big-box' wage law passes - YAAAAEAEEEE!!!!!

Aldermen defy mayor, anger retailers

By Gary Washburn and Mickey Ciokajlo
Tribune staff reporters
Published July 26, 2006, 11:36 PM CDT

In rare and open defiance of Mayor Richard Daley, the City Council Wednesday overwhelmingly approved a measure that will require big retailers to pay a higher minimum wage than most other Chicago employers.

The vote was 35-14 and came after more than three hours of sometimes stem-winding and often impassioned debate.

As union leaders and other proponents claimed victory, the Illinois Retail Merchants Association was poised to go to court, if necessary, to seek to have the measure declared unconstitutional.

"I'm not as disappointed as the thousands of job seekers who would have had an opportunity for employment," said David Vite, the association's president. "There are, as it stands, thousands of jobs that are going to be lost."

Supporters of the measure were exultant after the vote was tallied.

"At the heart of this ordinance is equality and fairness," Chicago Federation of Labor President Dennis Gannon said in a statement. "Today's vote sends a message that our elected officials and community members alike are not interested in the creation of low-paying jobs that fail to provide a living wage or adequate health-care benefits for working families.

"The choice between no job and a low-paying job is a choice between bad and worse," Gannon said.

The so-called "big-box" ordinance applies to stores of at least 90,000 square feet operated by firms with $1 billion or more in annual sales. It provides that beginning next July, employees will be paid a minimum of $9.25 an hour in wages and $1.50 in fringe benefits, figures that will rise to $10 and $3, respectively, by 2010. Automatic annual cost-of-living increases will apply thereafter.

By comparison, the federal minimum wage is $5.15 an hour, while the state minimum is $6.50 an hour—but both amounts can be less if employees receive tips.

Vite, of the retail merchants association, called on Daley to veto the measure.

After the council meeting, the mayor would not say whether he would take that advice. But if he decides to veto, he would have to persuade two aldermen who supported the ordinance to change their minds. A mayoral veto can be overridden by 34 votes.

Daley expressed disappointment in the council's action, contending that companies will decide to locate stores outside the city limits.

The council next could vote to reduce the size of stores that come under the wage requirements and, ultimately, work down to such franchise operations as McDonald's, he said.

"Next week, it is going to be something else."

Gerald Roper, president of the Chicagoland Chamber of Commerce, put it in more dire terms.

"I think that the aldermen who voted in support of this helped put the sign up, really big, that development in Chicago is dead," he said. "There is no sense of coming to this city because there is no predictability ... And it is a sad day."

But some of the aldermen who voted in favor asserted that big retail firms, despite threats otherwise, will continue to locate in Chicago because of the growth that it offers and its fertile market.

"There is a buck to be made, a lot of bucks," asserted Ald. Joe Moore (49th), the ordinance's sponsor. "If they are to continue to remain profitable, they must expand.

"I welcome these stores to our communities," Moore said. "But let's make sure when these big stores open up in our neighborhoods, they help our people."

"We have an obligation to the people in the community," said Ald. Ed Smith (28th). "We are supposed to work for those people. The right thing to do is to pass this ordinance."

Ald. Edward Burke (14th), another supporter, said that attempts at negotiation with Wal-Mart were rebuffed, and he asserted that the retail giants were fearful of Chicago's approval of the measure.

"They know what happens in Chicago is going to be duplicated everywhere else," he said.

There are about 40 existing stores in the city that will fall under the ordinance, including many operated by such big national chains as Wal-Mart—a key target of some of the measure's supporters—Target, Sears, Menards and Home Depot. Also affected are higher-end outlets such as Nordstrom's and Marshall Field's.

Daley has been wounded politically by a federal investigation that has uncovered City Hall contracting and hiring fraud, a probe that has crippled several political organizations loyal to him. He once enjoyed nearly dictatorial control over the council, in part because of his ability to field challengers to incumbent aldermen who dared to oppose him.

Wednesday's vote was viewed in some circles as a sign of Daley's declining strength.

"If the Chicago City Council is able to establish a veto-proof majority, they will have taken a considerable level of power and authority away from the mayor," said one Chicago lobbyist who spoke on condition of anonymity. "The mayor will have to engage in coalition-building rather than operating from strength."

Next could come an attempt to override Daley's opposition again and approve a measure requiring all residential developers to build a certain percentage of "affordable" units.

At a news conference after the meeting, Daley shrugged off suggestions that his influence may have diminished.

"I can roll with the punches anytime," he said.

Daley said he believes that some of the council members who voted for the measure were "afraid of candidates running against them" in next February's election if they had voted against such a populist measure. "That is a real issue," the mayor said.

Some aldermen said they believed union leaders would target opponents of the measure for defeat. A Wal-Mart official said earlier this year that plans for as many as 20 new company stores in Chicago in the coming years might be affected by the council's decision.

In a statement Wednesday, Michael Lewis, the company's senior vice president of store operations, said that "just as every business weighs the costs and complications associated with each potential location, we will try to provide Chicago residents with the savings, choices and jobs they clearly want without subjecting ourselves to a discriminatory marketplace and a competitive disadvantage."

Lewis said that "dozens of communities around the city of Chicago already welcome the savings, job opportunities and tax revenue we bring with each store opening. It's sad to see the City Council make this unfortunate choice to stand in the way of these benefits for Chicago's working families."

If unions intended to target aldermen opposed to the ordinance at election time, the Chicagoland Chamber is considering another kind of targeting.

"We are going to take a look at those aldermen who have decided they don't want development in their particular wards, and we will make sure when we bring in retailers and other companies we go to the wards that have supported development," Roper said. Two of the council members in good standing with the chamber because of their opposition to the measure are Ald. Isaac Carothers (29th) and Ald. Emma Mitts (37th), who represent impoverished wards on the West Side.



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