NCPA - National Center for Policy Analysis


August 16, 2006

Chicago's City Council ruling requiring a super-minimum wage is driving big retailers out of the city, says the Wall Street Journal.

In response to the mandate that certain mostly non-union "big-box" retailers pay a minimum of $13 in wage and health benefits by 2010, many retailers have decided that doing business in Chicago is not worth the cost:

  • Target was the first big chain to react, recently cancelling plans to open a new superstore in a run-down area on the city's North side.
  • Wal-Mart has also announced that its plans to build 20 new stores in the city over the next five years are "on hold" until the wage issue is resolved.

However, the movement may yet be overcome by common sense, says the Journal.

  • Mayor Richard Daley seems intent on vetoing the bill, which he says would result in higher property taxes to compensate for lost sales-tax revenue once stores leave.
  • And city Aldermen are beginning to recognize their error, and are reportedly now open to giving Daley the votes he needs to sustain his veto.

Chicago is the latest example of the "living-wage" movement, in which upper-income politicians attack non-union companies in the name of helping the poor.  But, in reality, it is the working poor who lose, says the Journal:

  • They lose access to new retail jobs that bigger retail stores create.
  • They lose access to low-cost goods that only "big-box" retailers can afford to charge.

Source: Editorial, "Big Box Rebellion," the Wall Street Journal, August 16, 2006

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