Wednesday, August 09, 2006

Windy City Defiance

The minimum wage is still a hot topic on the national and local level. A bill recently passed the House of Representatives to raise the minimum wage, but a closer review indicates major problems with this long sought victory. Indeed, no victory at all can be claimed when the wage increases simultaneously denies minimum wages for tip-earning workers (in the 7 states that allow this), alters small business medical benefit policies arguably for the worse, and (at least in theory) begins to challenge the trend since 1996 to enact higher state and local wages that have made the federal minimum wage irrelevant for workers in many states (non-federal minimum wages previously dicussed in this blog here).

And still my home town of Chicago may be pushing the envelope straight off the table. On July 26, the City Council voted to require "big-box retailers" (stores of 90,000 square feet or more) to pay employees at least $10/hour and $3/hour in benefits by 2010. Mayor Daley was adamently against such an outcome, but the Council's vote (34-14) prevailed by a veto-proof margin. (Mayor Daley has never vetoed a bill, but could do so in theory for any provision that prevails by 34 Council votes or less.)

At the risk of some readers rolling their eyes, I have to repeat a Sun Times quote of the bill's sponsor, Alderman Joe Moore: "Our job is not to safeguard proits for the world's wealthiest corporations. Our job is to look out for our constituents." Of course Daley and opponents of the bill would argue that this will hurt Chicago's constituents, but poor results with good intentions would be a refreshing change from good results with poor intentions or the equally common poor results with poor intentions.

In reality, we don't know where this will lead. Wal-Mart and Target have vocally opposed the bill with threats to cancel expansion plans (about 5 planned stores for Wal-Mart and 2 for Target), and now Lowe's has announced a hold on plans to open to additional stores in the city. Some of the stores planned by these companies were to serve as anchors for shopping developments with projects ranging over $110 million. As stated about the bill in general, it remains to be seen what will happen to these projects.
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