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City Council Passes Big Box Ordinance

Ordinance Requires Higher Pay At Target, Wal-Mart

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CHICAGO (CBS) ― Ignoring Mayor Richard Daley and risking the chance to attract giant retailers, the City Council on Wednesday approved an ordinance that makes Chicago the nation's biggest city to require big-box stores to pay their workers more.

"It's trying to get the largest companies in America to pay decent wages," Alderman Toni Preckwinkle said.

The final 35-14 vote came after three hours of impassioned debate with some alderman preaching from their desks like pastors at the pulpit. Aldermen who backed the ordinance fended off claims that they were doing the bidding of labor unions that have not organized Wal-Mart Stores Inc. workers.

"Let's make sure that when these big stores open up in our neighborhoods, they help our people, not exploit them," ordinance sponsor Ald. Joe Moore said. "Our job in this council is not to safeguard the billion dollar profits of the world's largest corporations."

Using large display boards, Ald. Ed Smith compared the annual pay of Wal-Mart's CEO with a starting hourly worker.

"He makes more in an hour than they make in a year," Smith said.

But Ald. Issaac Carrothers said the City Council's being manipulated to do what big labor can't.

"If you could unionize Wal-Mart tomorrow, we wouldn't be here. I'm concerned about the economic engine we need in the black community," Carrothers said.

The most pointed debate was among black aldermen whose inner-city wards are desperate for jobs. Ald. Fredrenna Lyle accused Wal-Mart of using money to buy support.

"They would rather spend millions of dollars to divide communities than increase their wage and benefit package, and divide the community it has," Lyle said.

Opponents, including Daley and aldermen who represent some of the city's poorest neighborhoods, say the measure will drive businesses and the jobs and tax revenue they create to surrounding suburbs.

"What you've got to do is help the economy, not hurt the economy," said Alderman Bernard Stone, who voted against the measure.

Moore says the outcome proves there's strong aldermanic support for a living wage and he doesn't think Mayor Daley will fight it.

"He's certainly legally capable of vetoing it, but I don't think he will. This has broad-based support," Moore said.

It takes 34 votes to override a mayoral veto but the mayor hasn't indicated whether he will veto the measure. Daley, whose administration has been under federal investigations into allegations of political hiring and contract payoffs, said the vote was not a sign that his political power is eroding.

"It isn't. People have their own minds," he said.

The measure requires mega-retailers with more than $1 billion in annual sales and stores of at least 90,000 square feet to increase workers' pay to at least $10 an hour in wages and another $3 in fringe benefits by July 1, 2010. Today, the minimum wage in Illinois is $6.50 an hour and the federal minimum is $5.15.

Wal-Mart has said the average hourly wage is almost $11 an hour in its Chicago area stores. The lowest wage to be paid at its new West Side store set to open in September will be $7.25 an hour. Wal-Mart has more than 40 other stores within 50 miles of the city.

The Bentonville, Ark.-based company has said it would redirect its focus on its suburban strategy if the ordinance passed. It called Wednesday's vote an "unfortunate choice."

"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," Michael Lewis, Wal-Mart's senior vice president of store operations, said in a statement.

Some aldermen also have warned that Target Corp. might rethink its presence in the city -- though the Minneapolis-based company has not discussed the issue.

Chicago has been at the center of the debate about the wages at so-called "big box" retailers ever since the city's rejection of a proposal by Wal-Mart to open a store on the city's South Side prompted the company to open a store just outside the city limits in Evergreen Park.

News that all but 500 of the 25,000 who applied for the store's 350 jobs were Chicagoans helped fuel the debate between those who say retailers like Wal-Mart should pay a "living wage" and those who argue their communities are desperate for both jobs and the taxes that such shoppers bring to a community.

Some alderman implored their colleagues to vote against the ordinance, saying they shouldn't gamble with bringing development and jobs to neighborhoods that desperately need them.

"I am dealing with a ward where every single day I got somebody looking for a job, every single day," Alderman Isaac Carothers said.

Backers of the ordinance said they weren't concerned about a legal challenge.

"If it goes to court, so be it," said Alderman Ed Smith.

That's where the fight appears to be headed.

"I think the council, frankly, is not authorized under law to be making benefit and wage decisions for private enterprise," said David White with the Retail Merchants Association.

Jerry Roper, president of the Chicagoland Chamber of Commerce, said he expects retailers to challenge the ordinance in court. He said it was a sad day for the business community.

"The aldermen who voted in support of this ... helped put the sign up really big that development in Chicago is dead," Roper said.

The living wage ordinance will become law in July 2010 if it isn't overturned in court.

Big-box employees' pay wasn't the only wage-related issue on the council's agenda Wednesday. Aldermen also voted to give themselves raises linked to the cost of living -- according to the federal Consumer Price Index -- in each of the next four years.

(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)