The Chicago City Council yesterday (26 July) passed a controversial ordinance that requires big-box retailers, such as Wal-Mart, to pay a “living wage”.  Proponents of the move said it will increase wages. However, detractors argue that it will simply force jobs out of inner city areas where they are most needed.

The ordinance, which was passed by a majority of 35 to 14, will require retailers with more than US$1bn in annual sales and stores of at least 90,000 square feet to pay workers a minimum of $10 per hour plus $3 in fringe benefits by mid-2010.

The current minimum wage in Illinois is $6.50 an hour and the federal minimum is $5.15 per hour.

“It’s trying to get the largest companies in America to pay decent wages,” said Alderman Toni Preckwinkle.

However, Mayor Richard M. Daley and others opposed the measure, arguing that it would simply keep businesses out of Chicago’s poorest neighbourhoods

Indeed, a spokesperson for the world’s largest retailer told just-food, Wal-Mart believes the ordinance will only harm Chicago’s working people. While the company does not currently have any stores in the city, instead preferring to locate outlets in the suburbs, the legislation will discourage Wal-Mart from opening stores in Chicago in the future, the company told just-food.

“This vote sadly put politics ahead of Chicago’s working men and women.
It sends a message that Chicago is closed for business, closed for development and closed for job creation,” Michael Lewis, SVP, store operations, said.

“This imposes special interest mandates that will unfairly deny savings and job opportunities to those who need them most. It’s wrong for the city council to tell the people of Chicago where to shop and to make it harder for inner-city residents to find jobs.

“Just as every business weighs the costs and complications associated with each potential location, we will try to provide Chicago residents with the savings, choices and jobs they clearly want, without subjecting ourselves to a discriminatory marketplace and a competitive disadvantage.

“Dozens of communities around the City of Chicago already welcome the savings, job opportunities, and tax revenue we bring with each store opening. It’s sad to see the city council make this unfortunate choice to stand in the way of these benefits for Chicago’s working families.”