Wednesday, July 26, 2006

Chicago passes 'big box' wage bill

Chicago today approved the bill requiring large retailers (Wal-Mart and Target, principally) to pay a "living wage" to workers.
The measure only applies to companies with over $1 billion in annual sales and stores of at least 90,000 square feet, which means it primarily affects Target and Wal-Mart.

It requires them to pay at least $10 an hour in wages plus another $3 in fringe benefits by July 2010. The state's minimum wage is $6.50 an hour.
It's possible the mayor will veto the bill, which he opposed, but it passed by a wide-enough margin to override. It's also possible it might be declared unconstitutional (as was a recent Maryland bill mandating health benefits and aimed at Wal-Mart).

Target has indicated they might leave Chicago rather than comply with the bill, as we reported here last week.

Update Thursday: Chicago Tribune has some response from Wal-Mart and info on their plans in the Chicago area:
Michael J. Lewis, president of Wal-Mart's Midwest division, sees millions of consumers hungry for Wal-Mart's low-priced groceries and envisions operating 40 Supercenters in the Chicago area in the next three years by building new stores and expanding existing stores. Wal-Mart currently has only a handful of Supercenters in the outlying suburbs.

"Our share of the market is relatively low in Chicago," said Lewis. "And that's an opportunity for us. We think there's tremendous opportunity to double or even triple our market share in Chicagoland."

That expansion is a threat to Jewel and Dominick's, the Chicago area's two major supermarket chains, where workers are unionized and where prices are generally 15 to 30 percent higher than those at Wal-Mart.

In an interview at Wal-Mart's Chicago office last week, Lewis said if the city council approved the bill, Wal-Mart would "put more time and effort in the suburbs," in particular focusing on those close to the city in order to draw shoppers across city lines.

"It would stand to reason that we would ring Chicago with Supercenters," Lewis said.

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