Posts
Will Chicago aldermen suffer an outbreak of good sense and reject a city wage law?
By Dennis Byrne
Chicago Tribune
We suburbanites will have to send Chicago City Council members our thanks if they make it harder for big retail stores to operate in the city.
It'll mean more sales and property tax revenue for our local governments, more jobs for our residents, more money for us.
Obviously (to everyone but the aldermen), Chicago aldermen would better serve their constituents by welcoming the business of the Wal-Marts, Targets, Kmarts and other "big box" retailers into depressed city neighborhoods whose residents really need the jobs.
But some aldermen are poised to adopt an ordinance on July 26 telling retailers with Chicago stores of more than 90,000 square feet or more than $1 billion in gross sales how much to pay their employees who work more than five hours a week. (They'd also tell them they couldn't refuse to hire convicts.)
For the "nonpartisan" Economic Policy Institute--which regularly supports such liberal causes--the ordinance is of global importance. Chicago, it exclaimed, is in the "throes of fundamental debate about the future direction of the American economy and its workers, one that touches on our most pressing concerns, from globalization to the role of government."
For this Washington-based group, it should be no big deal for Chicago to slit its own throat by adopting an ordinance that would require a minimum starting wage of $10 an hour and $3 an hour of health-care benefits by 2010. Its "analysis" said it would merely increase the price of a pair of $1 Wal-Mart socks less than a cent. Or reduce its profit margin by less than a percentage point.
"A more logical course of action by a well-run company would be to reduce their work force by 20 percent," responded David Vite, president of the Illinois Retail Merchants Association. The trade group figures that the ordinance would increase labor costs 40 percent to 50 percent in stores that have an average profit margin of just 1 percent to 2 percent. It also argues that any government-imposed increased labor costs should be across-the-board nationally, to avoid discriminating against larger businesses or certain geographic areas.
But it doesn't really matter whether prices increase a penny, nickel or dime. What counts is what the retailers think, because they are free to open or close stores wherever they want. This does not make them evil, no more than shopping for the best bargain or searching for a higher-paying job makes you evil. It makes them businesspeople, although in some people's eyes, that automatically makes them evil. If they conclude that the economics of doing business in the city won't work, then they won't do business in the city. Simple as that.
And if they decide to take their business elsewhere, who will that hurt? Chicago's unemployed citizens who live in neighborhoods with high joblessness. Those with limited skills who are looking for entry-level jobs. The city's employed who, again, will have to find a way to get to the more numerous suburban jobs. Chicago shoppers who will have to go the extra mile to find a wider, better and more affordable selection of merchandise. But nuts to them; the aldermen have bigger fish to fry.
You'd think that the aldermen would have learned by now. A few years ago, they rejected a Wal-Mart proposal to build two stores in Chicago. The council only allowed one--on the West Side--forcing the company to find a site in Evergreen Park. Some 25,000 people applied for the 325 jobs in the store, which produced about $1 million in sales and property taxes for the suburb. Money and jobs Chicago could have had.
Why are aldermen acting so stupidly? To placate organized labor, which wants government to do the union's work for it by enforcing wage and work rules that it can't bargain into place by itself. As usual, its handmaidens are aldermen who value the political organizing muscle and campaign contributions that labor provides more than the good of their city.
But, you never know when a majority of aldermen might suffer an outbreak of good sense and reject the ordinance. So let's get in touch with them now, to encourage them to do what's good for the suburbs. We suburbanites also should encourage organized labor to keep up its pressure on the aldermen. Because that's how the "city that works" works so well for suburbanites.
Copyright © 2006, Chicago Tribune
