Chicago Passes 'Living Wage' Rule for Retailers Chicago approves a plan requiring big-box retailers to pay a "living wage" to their employees, making it the biggest city in the nation with such a law. The measure requires mega-retailers to pay wages of at least $10 an hour plus $3 in fringe benefits by mid-2010. A court challenge is expected.
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Chicago Passes 'Living Wage' Rule for Retailers

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Chicago Passes 'Living Wage' Rule for Retailers

Chicago Passes 'Living Wage' Rule for Retailers

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MICHELE NORRIS, host:

In Chicago today, labor and community activists are celebrating their big victory in the city council. Chicago aldermen voted yesterday to approve a big-box living wage ordinance. It will require huge retailers, such as Wal-Mart, Target and Home Depot, to pay employees a higher minimum wage and more benefits. Chicago is the first big city in the country to pass such a measure.

NPR's David Schaper reports.

DAVID SCHAPER reporting:

On this sticky and sweltering summer day, Brian Gearing(ph) is selling cold bottled water to passing motorists at a busy intersection on Chicago's west side.

Mr. BRIAN GEARING (Chicago resident): Ice cold water, water.

SCHAPER: This is a neighborhood plagued by boarded up apartment buildings, vacant lots and abandoned factories. Gearing is selling water to raise money for a church-based recovery center. But he knows others in this neighborhood who do this sort of thing for a living.

Mr. GEARING: A lot of people out here are hustling to make ends meet because they can't get a proper job. But then again, a lot of them turn to crime and selling drugs because they can't get jobs and they make quicker money on the street.

SCHAPER: Gearing says a new Wal-Mart being built just down the street might help change the neighborhood.

Mr. GEARING: I look at it like this. A low-paying job is better than a no-paying job.

SCHAPER: Workers are cutting metal studs that will be used to frame the entryway of this new Wal-Mart on the city's Westside. When this store opens in September, it will pay workers about $7.25 an hour. Come July 1st of next year, the minimum wage for this store will shoot up to $9.25 an hour. This is Wal-Mart's first store in the city of Chicago. But the company now says this might be the last.

Under the Chicago big-box living wage ordinance, retailers with more than a billion dollars a year in sales and stores larger than 90,000 square feet must pay a higher minimum wage that peaks in 2010 at $10 an hour plus another $3 an hour in benefits.

Alderman Emma Mitts says Wal-Mart wasn't just creating 450 jobs in this store for her neighborhood, but was attracting other retailers to build nearby.

Ms. EMMA MITTS (Chicago Alderman): I have a Menard's scheduled to come in and they fall under the category as well. And they're a little hesitant to see now. They're telling me they have to see what's going to happen. They have to go back to their company and talk whether they want to come in or not.

Mr. DAVID VITE (Illinois Retail Merchants Association): The closed for business sign has been hung out on the borders of the city of Chicago.

SCHAPER: David Vite is president and CEO of the Illinois Retail Merchants Association and says big retailers are already reconsidering their Chicago plans. Vite is hoping Chicago Mayor Richard Daley, who opposed the ordinance, will for the first time in his 18 years in office use his veto powers. If Daley doesn't or the city council overrides the veto, Vite says big retailers will take the city to court.

Mr. VITE: We believe that this ordinance is discriminatory. It only effects about 19 companies operating in the city of Chicago, operating about 40 stores, when there are 10,000 stores in the city of Chicago that are not covered.

SCHAPER: Alderman Joe Moore got a festive greeting as he walked into his neighborhood office this morning. Moore is the measure's primary sponsor and his phone didn't stop ringing all day. Politicians from other cities all over the country want his input in crafting similar laws.

Mr. JOE MOORE (Chicago Alderman): I think there's a real recognition that working men and women, particularly those on the lowest economic rung of the ladder need a helping hand. It is absolutely unconscionable that you can work a full day's job and not earn enough money to get you out of poverty.

SCHAPER: And Moore doubts the claims of critics that the ordinance will scare away big-box retailers.

Mr. MOORE: Look, the largest cities in this country are the last frontier for big-box retailers. They have saturated the rural markets. They have saturated the suburban markets. There is a lot of dollars in the cities and a lot of potential for some big profits.

SCHAPER: Moore argues that the ordinance was written to withstand legal challenges, but still he takes his victory with a grain of salt. Big labor and big retail both spent millions on the big-box campaign and both will likely spend millions more as the minimum wage battle appears headed for the courts.

David Schaper, NPR News, Chicago.

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