After years of campaigning and furious debate, at the end of July the Chicago City Council passed a controversial ordinance regulating the wages of employees of “big box” retailers. The legislation affects stores larger than 90,000 square feet with sales of $1 billion or more, such as Wal-Mart, Target, Home Depot, Sears, and Nordstrom’s.
These big box stores would be required to pay their workers a minimum of $9.25 per hour and provide at least $1.50 an hour in benefits starting in July 2007. By 2010 compensation would increase to $10 per hour and $3 of benefits, with annual cost of living increases thereafter.
This ordinance, the first of its kind, has economists, labor unions, retailers of all sizes, concerned consumers, and job seekers all over the nation watching closely to see its impact on economic growth. Opponents caution that large retailers will simply halt planned expansion to the area, taking with them access to low cost goods, millions of dollars in sales tax revenue and desperately needed jobs. Additionally, they argue that the bill violates the Equal Protection clauses of the Constitution as it unfairly imposes severe requirements on a small sector of retailers.
Supporters claim big box companies drain local resources by creating a workforce that relies upon public aid to make up the difference between their paychecks and what it actually takes to survive in their community. They cite evidence that by paying a low wage, these big box chains force locally based competitors to slash the wages they pay in order to remain competitive, lowering overall income in a given area and driving small competitors out of business.
Join us at Café Society to share your own cost-benefit analysis of big box retailers in your community.
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For more informaiton, please contact Kristin Millikan at 312.422.5580.