An interesting wind blows in Chicago

More than30 of Chicago’s 50 city council members have already signed on to a proposal that would make Chicago the first city to require large retailers to pay their employees a living wage.

The bill would affect only stores that have at least 75,000 square feet and are operated by companies with at least $1 billion in annual sales, allowing smaller retailers to continue with the state minimum wage of $6.50 an hour.
That means Wal-Mart, for example, would be required to pay its employees $10 “at least $10 an hour plus $3 an hour in benefits” if it wanted to open a store within city limits.

Proponents of the proposed ordinance say it will help “preserve the middle class.” Dissenters are worried that it will prevent retailers from coming into the city and providing much-needed jobs.

"Don't let me be the experiment," said Emma Mitts, the alderwoman in the poor and mainly African-American neighborhood of Austin on the West Side, where the city's first Wal-Mart is scheduled to open this year. "Not at a time when my community needs these jobs so badly."

…John Bisio, a spokesman for Wal-Mart…said such a wage law would not affect plans for the Austin store.

Some 9,000 people have applied for about 400 jobs at the store in the Austin neighborhood, Mr. Bisio said, even though the opening is more than three months away.
So Wal-Mart says a wage law wouldn’t affect their plans for one store, but would it for others? That’s a big unanswered question. Another is whether the ordinance can pass legal muster, which its drafters believe it can.

I’m really of two minds about this proposal. In the sense that it protects employees of “Big Box” retailers, and would provide a disincentive for them to come into any old community and drive smaller retailers out of business, I’m all for it. It’s a very nice way of protecting the workers and many of the single-store retailers that make the North Side of Chicago such a great place to live—and own a business.

In the sense that none of those concerns, aside from employee protections, really apply to the South Side and parts of the West Side of Chicago, which are mostly minority communities without many employment options or many independent retailers, I’m rather skeptical. The residents of those neighborhoods are equally in need of a living wage and benefits, but if it were a choice between $6.50 an hour and no job at all, that’s not much of a choice, is it?

That said, Illinois’ higher-than-federally mandated minimum wage hasn’t put a dent in the growth of Big Box retailers all over the state. So maybe this wouldn’t, either. Santa Fe has the highest minimum wage in the nation, at $9.50/hour, and although a study by the Employment Policies Institute found it had realized all the worst-case scenarios (“the higher wage rate actually including increased unemployment and reduced work hours among the city's least-skilled and least-educated employees -- the very individuals that wage hikes are supposed to help”), the EPI perhaps isn’t exactly as independent as they’d have us believe. Santa Fe, even with their high minimum wage, has a Home Depot, an Office Depot, a Best Buy, and at least two Wal-Marts, according to the Yellow Pages. Of course, I don’t know what parts of town they’re in, nor when they were built.

Like I said, I’m really of two minds about it—but I’m leaning toward thinking that the evidence seems to suggest the potential benefits outweigh any potential downsides.

What do you think?

(Crossposted at Ezra’s place.)

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