Activists push for 'big box' stores to pay living wage

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By KRISTAL MCKANDERS AND JEN HOELZLE, Medill News

Advocates of a proposal that would set compensation guidelines for large retail stores got their day in the City Council chambers last month as concerned citizens implored aldermen to approve an ordinance that would mandate base wages and provide basic health benefits.

The Finance Committee discussed requiring Chicago stores with retail space of 75,000 or more square feet?"so-called "big box stores"?"to pay a minimum wage of $10 per hour to workers, plus an average $3 an hour for fringe benefits. Opponents of the ordinance were expected to testify later.

"Is it too much to ask for a living wage and benefits?" asked Baltazar Enriquez, a social worker who spoke for ACORN, a West Side group dedicated to enhancing quality of life for low- and moderate-income families. "It's time for the aldermen to start representing us, and it's time for the aldermen to stop representing Wal-Mart," he said. The crowd gave him a standing ovation.

Wal-Mart surfaced frequently in the discussion of "big-box" retailers, due in part to a May 2004 council decision to approve an Austin Wal-Mart development. The new store, expected to open in the spring of 2006, would be one of about three dozen stores affected by the ordinance, according to Ron Baiman, a research assistant at the University of Illinois-Chicago.

Baiman, who conducted a study with the UIC Center for Urban Economic Development on the estimated economic impact of the Chicago big-box living-wage ordinance, testified at the hearing.

"Big box ordinances would substantially benefit big-box workers and their families and other residents in the city of Chicago," Baiman said. "[This ordinance is necessary to prevent the downward pressure on wages and benefits engendered by company box stores."

The study focused on stores with more than 250 workers and found that increasing the wages and benefits of those employees may raise retail prices, but Baiman said that would be 2.1 percent or less.

Some aldermen said this price increase could drive big-box businesses to the suburbs.

"I don't want the price chasing big businesses out of my community," said Ald. Bernard Stone (50th).

But Baiman said that won't happen.

"This would be a negligible cost to big-box retailers," he said. "This is a very marginal effect in their revenue."

In fact, Baiman's study found that if workers are paid more, they would recycle that extra income back into the community, spurring on the local economy, the community and big-box businesses.

Ald. Emma Mitts (37th), whose ward is the expected destination of the city's new Wal-Mart, does not want to see the ordinance written into law any time soon.

"I'm very optimistic to say that the ordinance won't pass," she said, expressing concern that another city guideline would deter companies from building in the city. "I'm not for it at this time, for the sake of Chicago."

Wal-Mart representatives did not respond to repeated phone calls.

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