Big Boxes React To Chicago Ordinance

August 11, 2006 - 05:46

The Chicago, Ill., City Council recently passed an ordinance requiring retailers with more than $1 billion in annual sales and stores of 90,000 sq.ft. or more to pay employees at least $10 an hour plus $3 in benefits by 2010. Reaction by the big box stores and other advocacy groups to the ordinance, which passed late last month and has yet to be signed by Mayor Richard M. Daley, has been mixed.

Since the ordinance passed, several of the big boxes have reacted: Wal-Mart, which is scheduled to open its first store in Chicago’s city limits next month, said it would put on hold plans for any new stores in Chicago until the wage ordinance controversy was resolved. Wal-Mart also announced last week it would begin to raise starting salaries 6 percent at one-third (approximately 1,200) of its Wal-Mart and Sam’s Club stores in the United States. The company also plans to put a wage cap on some of its salaried jobs. Wal-Mart is increasing starting wages at these stores after performing a routine survey in several markets around the country that found the company needed to increase hourly pay to remain competitive with local retailers.

Lowe’s took a similar stance regarding its Chicago developments. The company said it was putting its plans to open two Chicago stores on hold. According to one developer, the company postponed signing a lease for a new store and was waiting to see what would happen with the proposed law before moving forward. A Lowe’s spokesperson told reporters the company was “very disappointed” with the ordinance.

A coalition of local union leaders and community groups in Chicago also took aim at Target Corp. last week for its employee wage policies. According to the Chicago Tribune, a report released by the Living Wage Coalition claims Target received $9.9 million in tax increment financing subsidies to build new stores in Chicago while it was opposing the new wage law. The report was prepared by the Neighborhood Capital Budget Group, a non-profit organization that track’s Chicago’s TIF programs.

“The taxpayers are not a part of the [TIF] decision-making process,” Jacqueline Leavy, executive director of the Neighborhood group, told the Tribune. She said there needs to be standards “as to what benefits these corporations are going to deliver” if they receive TIF funds. Currently, Target has seven stores in Chicago and has indicated it might stop building stores in the city due to the new ordinance.

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