NCPA - National Center for Policy Analysis


July 27, 2006

The City Council brushed aside warnings from Wal-Mart Stores Inc. to approve an ordinance that makes Chicago the biggest city in the nation to require big-box retailers to pay a "living wage."

  • The ordinance, which passed 35-14 Wednesday after three hours of debate, requires mega-retailers to pay wages of at least $10 an hour plus $3 in fringe benefits by mid-2010.
  • It would only apply to companies with more than $1 billion in annual sales and stores of at least 90,000 square feet.
  • The minimum wage in Illinois is $6.50 an hour and the federal minimum is $5.15.
  • Wal-Mart said that its average hourly wage is almost $11 an hour in the Chicago area and that the lowest wage that will be paid at the new West Side store will be $7.25 an hour.

Mayor Richard M. Daley and others warned the living wage proposal would drive jobs and desperately needed development from some of the city's poorest neighborhoods and lead giants like Wal-Mart to abandon the city.

He hasn't indicated whether he will veto the measure; it takes 34 votes to override a veto.

"This (ordinance) imposes special interest mandates that will unfairly deny savings and job opportunities to those who need them most," Michael Lewis, Wal-Mart's senior vice president of store operations, said in a statement.  "It's wrong for the City Council to tell the people of Chicago where to shop and to make it harder for inner-city residents to find jobs."

Source: Deanna Bellandi, "Chicago City Council OKs 'Living Wage,' " Associated Press/Washington Post, July 27, 2006.

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