Mayor Daley vetoed the income-raising big box ordinance yesterday, that would have forced the out-of-state owners of some of the most profitable corporations in the world to pay more than poverty-level wages to their employees in Chicago.
His main objection to the ordinance is that it would have disadvantaged potential city stores versus suburban stores (who would not fall under the terms of the ordinance, and thus could pay their employees the state minimum wage of $6.50 without any benefits). It's a fair point. I still think he should have signed the ordinance into law, as I believe the benefits from higher wages and benefits to Chicago residents would have outweighed the costs of any big box stores that did not open in Chicago. Who knows whether the big box behemoths, that have clearly articulated their express desire to penetrate the urban market (the last frontier for the big boxes who have reached points of market saturation in the exurbs and in most rural markets), would have shouldered the higher operating cost of paying non-poverty wages in Chicago, or whether they would have followed through with the threats to ignore Chicago altogether?
It's worth pointing out that the problem is not that the ordinance to require non-poverty wages and benefits is a bad idea, it's that the ordinance wasn't broad enough.
It only covered Chicago.
The response seems clear: a statewide big box ordinance.
With a statewide ordinance, the border question doesn't afflict the Howard Avenue or Cicero Avenue. It only affects the state border.
Would the big boxes ignore a 12,000,000 person market? I doubt it.
Would the cost of paying non-poverty wages be a big enough burden to write off 12,000,000 people? I don't think so.
There would be similar border dynamics around the ring of the state, but for most of the 12,000,000 potential customers who, according to industry standards that I learned about in Crain's will not travel more than 3-5 miles for retail, there isn't a border question.
Every county board should start passing similar big box ordinances, starting with Cook. And Lake County, Indiana, should do the same thing.
When wages are down (and they are -- average wages are falling) and the number of people without health insurance jumped by 1.1 million last year, we can't wait for the federal government to solve these problems. Cities, counties and states must continue to show leadership on raising the purchasing power of people to make everyone better off. Chicago's big box ordinance is a very innovative, envelope-pushing remedy to the problems of falling wages in our increasingly service-based economy.
To his credit, Illinois Lt. Governor Pat Quinn has been pushing the idea of a statewide big box ordinance. And I have a correction to make as well: I wrote about the $7.50 an hour minimum wage advisory referendum on the Cook County ballot and assumed that the Cook County Board voted to put the question on the ballot. I was wrong: citizens did submit petitions to place the question on the ballot. And the Master of Referenda -- Lt. Governor Quinn -- was behind the effort. Congratulations to him and his political team for a smart move.