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Both Chicago newspapers editorialized today in favor of a mayoral veto of the “big box” ordinance. Sun-Times:
In his 17 years on the job, Mayor Daley has never vetoed anything. For most of his tenure, of course, compliant aldermen simply did what he told them to do. But Daley’s power is waning, and the City Council has begun to show an independent streak. Unfortunately, aldermen have used their new-found independence unwisely, passing a living wage law for big-box retailers last week over the mayor’s objections. It received what appears to be a veto-proof majority, but we still think he should veto it.Although the proposal is clearly aimed at Wal-Mart, it also covers Target, Sears, Home Depot and other stores that have more than 90,000 square feet of space and are owned by companies that do more than $1 billion in sales. It requires that workers in those stores be paid $13 an hour in wages and benefits by 2010.
The law is bad public policy and almost certainly violates equal protection grounds because of its discriminatory nature. It applies only to retailers with stores that are larger than 90,000 square feet and that do more than $1 billion in annual sales. Such stores generate $51 million in sales taxes for the city each year. […]It will be strange if the mayor gives up on this. In the past, he has not been intimidated by the City Council. In 17 years as mayor, he hasn’t backed off of a fight when he thought he was doing the right thing for Chicago.
A veto of the big-box ordinance would be the right thing for Chicago.
Your turn.
posted by Rich Miller
Tuesday, Aug 1, 06 @ 6:47 am
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Studies by reputable universities have shown that similar ordinances have actually lead to job and tax revenue GROWTH. The aldermen did the right thing. If the mayor vetoes, I hope they hold together to uphold their original vote. This law will help both the workers and other residents of the city. In fact, it should be adopted state wide.
Comment by Way Northsider Tuesday, Aug 1, 06 @ 7:03 am
So the newspapers are against the war in Iraq, but are in favor of World War III?
I must agree with their logic…I think that unions are a bigger threat than Saddam Hussein is to the average Chicagoan.
Comment by Leroy Tuesday, Aug 1, 06 @ 7:11 am
Why should Daley risk his veto being overridden? That wouls basically emasculate him and confirm his hold is broken. He is more likely to fight it by surreptitiously supporting court challenges.
I think he’d be a fool to fight the popular tide on this one. He’d lose so much of the organized labor vote, traditionally the muscle of Da Machine.
Comment by Slats G. Tuesday, Aug 1, 06 @ 7:34 am
Wal-Mart is destroying small businesses across the nation. Unfortunately, mom and pop stores are starting to become a thing of the past. Also, a very high percentage of Wal-Mart employees qualify for public aid. Isn’t it ironic that 4 of the top 5 richest people in the U.S. are Waltons but Wal-Mart still can’t find enough money to pay their workers a living wage or health insurance.
What the Tribune needs to understand is that bringing in Wal-Mart does not necessary mean more jobs and tax revenue. For every 1 job gained by Wal-Mart, 1.5 jobs are lost in the community. The Tribune fails to mention that Wal-Mart will undoubtedly force several smaller businesses to close their doors. In essence you are trading tax revenue not gaining it.
Maybe someone can help me understand this as well: Republicans say they are the party that is for small businesses. Now isn’t it hypocritical to say you support small businesses but you take political contributions from Wal-Mart.
Comment by Concerned Citizen Tuesday, Aug 1, 06 @ 7:39 am
Any suggestions that Daley is on the skids and losing power should be taken with a large grain of salt. Who else is there? In recent days, we have learned of health problems in his family, but those seem to be resolved…thus removing the only possible obstacle to his running again and winning. The corruption stuff is already receding in people’s minds, anyway. And the city council is incapable of serious work, due largely to to the indifference or complicity of Chicago citizenry, many of whom have benefited from the system as is.
As to the big box ordinance, who cares. It will either be a zippy little social experiment that fails or a success. I think the latter is more likely, agreeing with Way Northsider that some research supports the idea as beneficial to the economy as a whole.
If you have read anything about Walmart, you know that a few bix box ordinances around the country, while not welcomed, is not going to bring them to their knees. If they want the Chicago city business, they’ll deal with it. They are infinitely adaptable.
Comment by Cassandra Tuesday, Aug 1, 06 @ 8:21 am
This will not help that many poor blacks that it intends to help. More qualified people will simply leave their current jobs or enter the job market all together, leaving the beneficiaries in their same situation.
Comment by Todd Castro(ger) Tuesday, Aug 1, 06 @ 8:30 am
What year is this? It is the 21st Century. Chicago isn’t supposed to pass ordinances that lock in the past, but propels us into the future. Daley needs to veto this embarrassmet. The Anti-Walmart people are simply 20th Century stragglers that are getting in the way. If they have a better plan than using government to stymie business in this city, let’s hear it - until then - get out of the way!
Comment by VanillaMan Tuesday, Aug 1, 06 @ 8:37 am
I think we should return to banning the sale of meat after 6pm and on Sundays, and the archaic building code rules on plumbing and electric.
Comment by Bill Baar Tuesday, Aug 1, 06 @ 8:45 am
To Our Readers:
We depend on the members of the Chamber of Commerce, especially big retailers, for advertising dollars. So, when push comes to shove, we really work to protect their interests, not yours. We will gladly use these pages to advance their cause whenver we can, based on the flimsiest arguments we can hang our hats on. Case in point, the so-called “equal protection” argument being advanced by renowned attorney John Kass.
Yours,
The Chicago Tribune
The Chicago Sun-Times
Comment by Yellow Dog Democrat Tuesday, Aug 1, 06 @ 8:54 am
Daley finds himself in a tough spot on this one, eh? Hew risk losing a veto vote; and even if his veto stands, he has unleashed chaos in the 2007 elections. On the other hand, if he does not veto the ordinance he ends up looking bad to the business community.
The business community has already figured it out. Crain’s reports that business leaders are no longer relying on Daley for their agenda, and are looking to create relationships with the City Council.
I’d say Daley’s best bet is to allow the ordinance to stand, all the while assuring business leaders that they will win in court. The risks of a veto are too high.
I don’t know exactly why, but the phrase “Ignore the man behind the curtain” comes to mind when thinking about Daley’s current predicament.
Comment by the Other Anonymous Tuesday, Aug 1, 06 @ 9:02 am
Also, a very high percentage of Wal-Mart employees qualify for public aid.
And what is wrong with that?
Liberals used to advocate a minimum income. You worked and the gov made up the diff to bring you to a minmun income level.
McGovern failed at it, but Nixon gave us the earned income tax credit (although Ford signed it)
The idea was a Republican one from the beginning, for President Nixon had proposed a similar negative income tax scheme.
What’s interesting now is the success of the 1996 welfare reform. Read Ron Haskins in the WSJ over the weekend on it.
He challanges conservatives to expand on the success and in effect expand on EITC ans similar programs.
Note there is no challange to Liberals. There stuck with Luddite protectionist programs like we’ve seen here with the bix box ordinance. Protect Jewel, Doms, and the IFCWU at the expense of everyone else in the city.
The goal should be to build family wealth, not just income, because that’s what really seperates the poor from everyone else in this country.
That’s why Bush’s ownership ideas so important.
Comment by Bill Baar Tuesday, Aug 1, 06 @ 9:03 am
My question is, how long until Wal-Mart figures out how to design an urban store that has 89,900 square feet? I’m serious here. Daley might be able to save his veto.
Comment by ZC Tuesday, Aug 1, 06 @ 9:11 am
Perhaps now the Chicago City Council will set the wage and benefits for other employment sectors. Then other cities can get into competition to set wage and benefit requirements for their communities. Of course, the General Assembly, no stranger to pandering to voters, will have to become involved to set statewide standards to control wages and assure that Chicago is protected from competition of anti-wage and benefit cities. Ya know, maybe Mayor Daley should veto this and let the free market system work the same way it has for the last 200+ years.
Comment by Common Sense in Illinois Tuesday, Aug 1, 06 @ 9:23 am
Wow, this blog has even more leftists than I realized. Talk about cutting off your nose to spite your face! You have to have jobs before you can have any jobs and tax revenue growth. The suburbs justs laugh as ridiculous Chicago alderman just drive even more jobs and sales tax revenue to suburban towns.
It’s incredible seeing lefty groups like Acorn who always whine about big banks “redlining” and underserving poor communities, taking the lead on driving good jobs out. Guess a liberal can’t feel relevant unless poor people remain victims.
And I love Way Northsider’s reference to studies done by “reputable universities.” Yes, if you’re just going to make up absurd studies out of thin air, be sure to add the word “reputable.” Yes, we’ll all just completely ignore common sense when we see that.
For cryin’ out loud, the average Wal Mart already pays nearly twice the Federal minimum wage. Obviously the Alderman know what’s better for people than the tens of thousands who apply for these jobs when a Wal Mart opens around the area. Morons.
Comment by Anonymous Tuesday, Aug 1, 06 @ 9:26 am
Daley could get several of his most compliant aldermen to flip and agree not to override the veto, but I don’t see a veto coming. As Slats notes it is a risk that could weaken Daley. He has already given in on smoking, foie gras, and trans fats so I doubt he’ll stick out his neck for big boxes.
I think Daley is going to do nothing, at least overtly, and hope that the law is overturned in court.
Comment by Tom Tuesday, Aug 1, 06 @ 9:28 am
I made all these points in a single earlier posting, including dual stores. The next step — as I said before — will be to add up all the stores and employees per corporation and apply it there. That would include McDonalds and the rest of the fast food chains.
The breaking day I am waiting for his the application to leaseholds of the large corporations and law firms.
And then we have the federal, State, County and City governments
Comment by Truthful James Tuesday, Aug 1, 06 @ 9:46 am
Anonymous 9:26, you are new here, but just realize that I frown on people who get too many kicks from insulting other commenters.
The SJ-R now appears to be a much more suitable location for that kind of commenting, as well as some other sites. Please feel free to go there if you can’t contain yourself. Thanks.
Comment by Rich Miller Tuesday, Aug 1, 06 @ 9:54 am
Rich — and Skeeter
Congrats on Skeeter being quoted in this a.m.’s Tribune. We are being heard if not obeyed.
Comment by Truthful James Tuesday, Aug 1, 06 @ 10:12 am
WalMart is huge and may be a monster retailer, but if you do not like them then do not shop there. As for the alderman, WalMart is an easy, no brainer target. They are not saying/doing anything WalMart has not heard/felt before. So Walmart builds across the street or builds 89,000 foot food stores to compete with Jewel/Dominicks and 89,000 foot retail for Sears/etc. Does not seem to bother them in any way. Do all the big stores on State hit 90,000 ft or pay everyone above minimun? Are Science and Industry and Field museums this size and do they pay well? Whole idea seems like a bunch of smoke with nothing behind it.
Comment by zatoichi Tuesday, Aug 1, 06 @ 10:21 am
Truthful… huh?
Comment by Rich Miller Tuesday, Aug 1, 06 @ 10:29 am
Truthful,
I just searched and I didn’t see it.
Comment by Bill Baar Tuesday, Aug 1, 06 @ 10:40 am
Chicago was the home of the 20th Century’s big marketing ideas. Home of Montgomery Wards and Sears and Roebucks. Chicago put small stores out of business for over 100 years. With RFD and the Sears catalog, consumers could fill their houses with inexpensive products, not pay the local businesses, and even get a pre-fab house delivered. Chicago was home to the lastest cutting edge marketing ideas and was competitive. Chicago revolutionized advertising, it made affordable the middle class boom of the last century.
Then it got fat. The pot of money grew so large, Chicagoans started fighting over how much of the pot they got, instead of discovering new ways to make it grow. Chicago started worrying over small comfy issues instead of the Big Picture.
Today we see Chicagoans complaining about the new competition. The city that begat industrial age department stores, catalogs, mass distribution and middle class lifestyles, rediscovered that the world kept going forward although it thought it was still Top Dog.
Instead of getting off it’s fanny and grabbing life by the big stick like the Chicago of yesterday, today’s Chicagoans whine and pass silly ordinances as though it is still capable of solving it’s problems without work.
Anti-Walmart people are offended that their world is rocked by a group of people they consider themselves better than. They look down their noses at the cheap goods just as their ancestors mocked Chicago’s catalogs and canned meats. Believing their own hype, they turn their back to the new competition, believing their disapproval would change market conditions in their favor.
The world is lead by those who work for it. Of all places, you would have never imagined that Chicagoans would have forgotten this basic truth, but it appears they have. It is this basic failure of character that is driving the movers-and-shakers of the 21st Century away from cities like Chicago to new Chicagos elsewhere in the US and the world.
Hey! There are NO free lunches. You can’t expect a bankrupt state government to provide health benefits. You cannot provide an eternal happy life through legal means. Get back to work!
Comment by VanillaMan Tuesday, Aug 1, 06 @ 10:43 am
Ah, here it is. Scroll down to the bottom. Interesting. An actual working hyperlink from the biggest elephant on the block would be nice, but it’s not too bad.
Comment by Rich Miller Tuesday, Aug 1, 06 @ 10:44 am
I’m generally opposed to this kind of thing and think it will encourage big-box retailers to search for all possible locations adjacent to the city before agreeing to locate here. That said, I happened to go to the new Target on Peterson on Saturday night around 9 and it was absolutely packed. I mean I’ve hit many other targets before in the city and suburbs. But this new store was literally mobbed at 9 on a Saturday night even though there is another Target only two miles away. So maybe the higher wages won’t be that much of a deterrent with that much possible money to be made.
That said, I still think minimum wages should be applied on a large scale (nationally or at least statewide) because it’s just too easy for retailers to locate just outside the border when they would otherwise locate within the city.
Comment by ChicagoCynic Tuesday, Aug 1, 06 @ 10:45 am
Rich,
That’s not my quote.
The person could at least have come up with a creative name.
Comment by Skeeter Tuesday, Aug 1, 06 @ 10:50 am
Skeeter, are you saying that somebody else wrote the quote that the Tribune used? Should we press for a retraction? Perhaps arrange yet another blogger ethics panel?
Comment by Rich Miller Tuesday, Aug 1, 06 @ 10:53 am
Talk about making things up, Walmart in no way pays an average of twice the federal minimum wage, which would be $10.30 and hour.
The suburbs and small towns are saturated with Wal-Marts. In order for them to reach their growth goals, they have to penetrate the inner cities. And believe me, they will find a way to adapt. Maybe it will be sub-90,000 sq.ft. stores. Who knows? But it is true that Wal-Mart is dooming the small business strips across America.
Killing the small business strip in Chicago dooms our small neighborhoods. One of our biggest claim to success is the “city of neighborhoods”. I don’t want to see Wal-Mart destroy this. Reign Wal-Mart. Don’t let it destroy our way of life. Don’t sell out the heart of our fair city for some meager, low-paying jobs.
We lived fine before Wal-Mart. I won’t miss them if they don’t come.
Comment by Little Box Man Tuesday, Aug 1, 06 @ 10:55 am
I just did a search and discovered that Nyberg got the shaft. Skeeter’s comment was right below his.
Apparently, the Trib reporter thought that the commenter’s name is below the comment, not above. Oops.
Comment by Rich Miller Tuesday, Aug 1, 06 @ 10:56 am
Correct Rich.
Not mine.
It is interesting though since it attempts to write in my style, which I should fine flattering.
However, I’ve never been troubled by executive salaries (other than when it concerns executive salaries of companies of which I own stock that underperform, and then I admit to some anger) so it clearly was not one of mine. The person who wrote that quote assumed that Skeeter was a liberal, which is pretty funny if you read much of what I write. The person must have not read my comments about Danny Davis who I said was my choice for Cook County Board since old fashioned liberals like him could do less damage in that position than in Congress.
That being said, if they were going to misquote me, they could have at least included a link to www.skeetergsd.blogspot.com.
Comment by Skeeter Tuesday, Aug 1, 06 @ 11:13 am
That explains it.
Nyberg is the liberal, not Skeeter.
Comment by Skeeter Tuesday, Aug 1, 06 @ 11:14 am
- Bill Baar - Tuesday, Aug 1, 06 @ 9:03 am:
Also, a very high percentage of Wal-Mart employees qualify for public aid.
And what is wrong with that?
The whole point of the living wage ordinance is that someone working full time should not have to receive public assistance.
But let’s put it in economic terms: if a dominant employer does not pay enough to lift someone out of public assistance, the incentive will be to not take imployment at that employer.
Moreover, some of us believe that WalMart is paying below-market wages, and gets away with it because it is a monopsony. In the inner city, WalMart’s monopsony power is even stronger since there are few alternatives, especially if WalMart drives out the small retail shops that already exist.
Beyond economics, though, it’s pretty harsh to say “so what” about workers who aren’t paid enough to lift themselves above public assistance.
Comment by the Other Anonymous Tuesday, Aug 1, 06 @ 11:23 am
Another point I raised before, probably on another Big Box thread.
If the alderperople want to make social policy, they should be willing to put the differential sales taxes where their mouths are.
The Big Boxes generate incremental sales taxes for the area. (Incremental means the gross from the new Big Box less the reduction in sales taxes from the small boys in its marketing area.
Use that for nedical benefits for the workers in the Big Box — after of course the additional costs because the small boys are out of business.
Comment by Truthful James Tuesday, Aug 1, 06 @ 11:33 am
Skeeter & Rich
Sorry about that, I just was awestruck regarding the pick-up of our baby from the cradle.
Comment by Truthful James Tuesday, Aug 1, 06 @ 11:35 am
Someone else talked about this a few weeks ago…but why does the city cater to the Unions when most of the people in the unions don’t even live in the city??? Aldermen need to do what’s right for their constituents, not what’s right for the unions.
Unions give a lot of money to Daley and Stroger, and they work a lot of elections, but how do they help the southside…southeast side, southwest side…when most of the union is made up of White Irish Suburban folk???
Give me Walmart and their cheap clothes…I need something to wear when I vote against Daly in Febrruary.
Comment by Union Jack Tuesday, Aug 1, 06 @ 12:15 pm
…some of us believe that WalMart is paying below-market wages.
I’d rather trust the markets for belief on that one, than the Chicago City Council who have a habit of getting their beliefs swayed by one interest or the other….
…I’d keep Gov out of the markets and if a leveling is desired, have the Gov fund an IRA / College fund for each American child at birth.
I’d rather see the money go to build a investor class than a wage slave class.
Besides, most of the people working at the big boxes by me are kids of, if not the well to do, people who certainly don’t need it… I’d keep the Gov out of it.
Comment by Bill Baar Tuesday, Aug 1, 06 @ 12:20 pm
Bill,
Your comment that “I’d rather trust the markets” to set wages makes sense, but only if there is, in fact, an efficient market.
I’d buy into the free market rhetoric a lot more easily if there was more talk about making markets efficient. But it seems that the “free market” rhetoric is used primarily as a justification to remove or prevent regulations on business.
I’m very persuaded by the article in July’s Harper’s by Barry Lynn, which lays out a case that WalMart is a monopsonist — i.e., it dictates its costs to suppliers, labor, and even local governments — and is thus not acting in an efficient market.
Looking at WalMart’s business practices, it’s hard to argue that some change is necessary. I’d find it refreshing to hear ideas from conservatives on how to fix the inefficiencies in the market caused by WalMart, rather than their constant reassurances that Adam Smith’s “invisible hand” will solve all problems.
Comment by the Other Anonymous Tuesday, Aug 1, 06 @ 12:40 pm
PS to Bill:
Since there’s no WalMart open in the City, the living wage ordinance does not apply to the well-off kids that you see in your neighborhood WalMart.
Comment by the Other Anonymous Tuesday, Aug 1, 06 @ 12:42 pm
Hello everyone. I’ve been enjoying this blog for a while now and thought I’d put my two cents in on this big box issue.
I think the anti-Walmart organizing being done by the unions combined with the questionable capacity of Daley to get out the vote in the upcoming elections in the manner to which many Aldermen have grown accustomed is a big factor here. Also, how big is the cost to them politically? I don’t think you’ll see any elections won or lost on this vote.
It’s a test of power more than an application of principles.
Comment by g Tuesday, Aug 1, 06 @ 12:57 pm
what i don’t see if how honestly paying a higher wage is really going to help many of the employees. aldermen if they wer smart would be in a better position if they forced i mean nudges walmart into greating a job training venter, or build some center for training programs on computersor something for the chicago community they build in - if these folks are lining up for the jobs there are many who don’t get them and need them - teach them, train them, walk mart would get more of my support through that than just paying higher wages
Comment by annoyed all the time Tuesday, Aug 1, 06 @ 1:24 pm
If this wage setting by government is such a good thing, let’s go all the way. Why doesn’t the City Council set a mandtory $25 an hour wage rate for all jobs in the city. And how about prices? Let’s have the government set them too–and cut ‘em! I’m sure Wayside North has a study to show that will lead to prosperity and growth too.
And who said they believe Wal Mart pays “below market” wages? By definition, retailers “set” the market through their combined salary structures–varying by industry, market penetration strategy, and geography. Costco, Target, Jewel–among the many big companies that compete with Wal Mart on one level or another–choose their wages to best compete for quality workers and the ability to provide the lowest prices. So does Wal Mart. What’s wrong with that? Last time I checked, this was still the United States of America, land of the free. Apparently, just not in the People’s Republic of Chicago.
Comment by Red Tuesday, Aug 1, 06 @ 1:25 pm
Since there’s no WalMart open in the City, the living wage ordinance does not apply to the well-off kids that you see in your neighborhood WalMart.
Go to Madison and Pulaski. Outside of the loop, that intersection, and 63rd and Halstead were the two post powerful retail districts in Chicago.
There is no Walmart or much of anything else there….
…a reason too why they’re no well off kids either… because they’re is no way for a kid to even get started.
Comment by Bill Baar Tuesday, Aug 1, 06 @ 1:33 pm
According to “Red” on Tuesday, Aug 1, 06 @ 1:25 pm:
“If this wage setting by government is such a good thing”
Wage setting by government? What a new and interesting idea.
Setting a minimum wage. Wow. Why didn’t anybody think of that before? How dare those commies in Chicago do something like that. They must hate freedom, just like those reds in the Republican Party in Congress who finally agreed to raise the federal minimum wage. I assume that Red is expressing outrage over that law also.
In response to your question: What is wrong with that is where you let “market forces” set wages, you get Mexico and $1 a day. Maybe that is what you want.
Comment by Skeeter Tuesday, Aug 1, 06 @ 1:37 pm
Sam Walton started as a small business man and became very successful. Any other small business enterprise has the same opportunity to grow their business and also become successful. People do price shop and will spend their $ for their best bang for the buck, it makes no difference if it is Walmart or Uncle Joe’s hardware store. So the shoppers vote with their pocketbook and the loser is the one that does not give what the shopper wants.
I think the government should stay out of the business of telling companies how to manage their operations. If a company large or small is not breaking the law then leave them alone, however if a company is a monopoly it is up to the Federal government to take the proper action.
I feel like many that think the Walmart issue is just a way for unions to try and bring Walmart down. If I were anti-union the way the unionsd are acting would drive me into Walmart. And as we all know the unions have less members each year.
Comment by It's 5 O'clock somewhere Tuesday, Aug 1, 06 @ 1:41 pm
“It’s hard to argue that some change is necessary”. Stop right there. Please don’t go on and assume that your ability to see a moment of reality must be wrong since it doesn’t fit your ideology. You are describing a moment of clarity, so enjoy that moment.
What makes a revolution is the breaking of old rules. Big box stores are successful - so there. Reality trumps social science every time.
Reading through these blogs about how the market isn’t efficient or whatever is like watching geezers try to figure out Hip-Hop. They don’t get it because they are too dang full of themselves to relearn the newest dance.
How did the generation that touted the old adage, “Don’t trust anyone over 30″, evolve into a group of toothless complainers dissing today’s shoppers and pining for yesteryear? How did the “city that worked” become the city that tries to find a work-around?
Like every generation, Boomers have discovered their world changing. Instead of going with the flow, they want to study it, label it, and try to legalize it out of existence if it doesn’t fit their ideology. Reality sucks, life isn’t fair, deal with it. Complain all you want, thats the way it is.
As a graduate from a liberal German university, I discovered what lies dying economies say when they are confronted by an unpleasant reality. “Because we just don’t do that”, is what Germans say to end any arguments. In this country, we hear something like, “Because it’s unfair”. Somehow these people believe that their attempts to make life fair should trump reality.
Life didn’t end in 1974. We don’t drive Cutlasses anymore. Bill Clinton declared Big Government dead in 1995. Communism and socialism have proven unsuccessful. The USA is number one for a reason, not an accident. Walmart and other big box stores will dominate for this generation of shoppers - perhaps longer if they figure out what the next big thing is.
Comment by VanillaMan Tuesday, Aug 1, 06 @ 1:43 pm
Interesting to see all the liberals and union backers bash WalMart. In my area, i hear the same thing and then hear them say how they got a great deal at WalMart. Hypocritical!! Typical liberal stance. All talk and no personal responsibility.
Comment by Lee Tuesday, Aug 1, 06 @ 1:47 pm
Lee,
Keep dreaming.
I’ve never been inside a Wal-Mart. Ever. As long as they are not simply a non-union company but actually-bashing company I will not go inside.
On the other hand, are you, Lee, ready to give back all the benefits that you have earned because we have laws for minimum wages, because unions have pushed wages to reasonable levels, and because we have workplace safety laws?
If not, then keep quiet.
Comment by Skeeter Tuesday, Aug 1, 06 @ 1:53 pm
The argument is always made that this will cost people jobs. The fact is that is not true.
People have used this argument since workers first fought for and earned their rights. From unions earning the right to a weekend or having a minimum wage or outlawing child labor, everytime these issues come up people who don’t understand history make these same arguments about it hurting the worker. Maybe its time people start to understand history a little more.
Comment by HANKSTER Tuesday, Aug 1, 06 @ 2:09 pm
Hank -
Have you ever thought that perhaps there are so few mom and pop operations left, and everything is going big box is because mom-and-pop operations can afford paying employees a minimum wage?
Look at when the minimum wage was enacted. Look at how many mom and pop operations there were then. Now consider today….
Comment by Spruance Tuesday, Aug 1, 06 @ 2:29 pm
One interesting response to the claim that “Walmart drives other businesses out, thereby just maintaining tax revenue instead of increasing it” can be found in the example of the ‘Wegmans’ chain of grocery stores, that is a success in the Northeast US. This chain features goods that are more rare and/or expensive than those that Walmart carries.
That is the potential future for competition in Chicago and Illinois at large. When larger businesses enter the market, niche businesses can thrive. While this particular store chain has not expanded to the Midwest yet, the potential for variants of this chain duplicating functions beyond what Walmart can specialize in allows for new jobs and increased opportunities for jobs.
Comment by Econguru Tuesday, Aug 1, 06 @ 2:39 pm
Spruance-
I did not put judgement on big vs small business. However, in real dollar terms, the minimum wage has decreased as larger businesses have taken over.
I think there is better evidence that the way the government, tax policy, antitrust policy, lack on intl worker rights, is set up would be a much better explanation for the expansion of big business.
Comment by HANKSTER Tuesday, Aug 1, 06 @ 2:42 pm
Econ”guru”:
Are you claiming that without Wal-Mart there would be no Wegman’s?
Is Wegman’s some sort of lamprey of the retail world that cannot survive without the “host retailer”?
Comment by Skeeter Tuesday, Aug 1, 06 @ 2:45 pm
Friends of Monopsony, lend me your ears. There are many Big Box firms all competing hard. In the small towns where Walmart took a footprint there was not a large enough market for more than one.
Now look around. Super Target, Menard’s, Jome Depot, Costco, Sam’s Club. Meijer, Kohls cheek by jowl with each other. All of them in competition with each other All of them after the best deal to open up. All of them buying up the food chain from suppliers in China, South East Asia, Africa, South America. That is the effect of the free market — That’s the market the new Sears/KMart wants to get in on. If it were a monopsony on the goods chains, there would be a single customer — Walmart for the output of a single supplier. But there is not. So many sources of supply.
Those that believe they can fight for market share want to be in hitting difference of each other.
Comment by Truthful James Tuesday, Aug 1, 06 @ 3:04 pm
Skeeter, Like I said, if you think wage settting by government (or in this case government wage setting for one sub-section of one industry) is a good idea, why aren’t you pushing for $25 an hour across-the-board?
High prices aren’t good for workers either. Where’s your ordinance to cut the price of groceries at Jewel? I’ll be waiting.
Comment by Red Tuesday, Aug 1, 06 @ 3:09 pm
Let’s not forget in all of this discussion that, at day’s end, WalMart really doesn’t set wages. Not in the long run. No company does. The MARKET sets wages, and the market pretty much pays people what their productivity is. I do think you can make some adjustments around the edge, and I’m no radical libertarian. But too much praise of WalMart _or_ blame of WalMart strikes me as off-base.
End of the day, if we can fix our educational system here in Chicago, we could let in a whole host of WalMarts and still be doing fine. If we can’t steadily improve education, it doesn’t much matter how many WalMarts we keep out.
Comment by ZC Tuesday, Aug 1, 06 @ 3:14 pm
Skeeter, the business community knows what the worker means to the free-market. You are so bitterly ideological, that you can’t seem to understand a company that goes as far as it can go to sell as much of an item for as cheaply as possible. The point of unions, I believe, is to protect skilled, semi-skilled, and possibly government workers. I see a reason to have a union for the sake of a union. The only thing worse than an over-zealous union is government intervention in this case, both of which will help lead to a stagnant job climate. The big box ordinance is wrong in premise. I don’t care what “reputable” socialist university thinks about it. I believe that workers should have fair rights. But I also believe that businesses big and small should have fair rights as well.
Comment by Lovie's Leather Tuesday, Aug 1, 06 @ 3:15 pm
Red,
I don’t advocate $25 per hour because I don’t view that as reasonable.
I do view $10 per hour as reasonable.
You, on the other hand, prefer a world where employers can pay $1 per day, like in Mexico.
Go ahead — call me a Commie. Better a Commie under our American system including a minimum wage than a completely free market system as they have in Mexico with the “freedom” to work for $1 a day.
If you are so in love with that system, move to Mexico. I seem to recall some new stories recently reporting that workers want to move to America for decent wages, and not the reverse. Maybe you can start a trend the other way.
Comment by Skeeter Tuesday, Aug 1, 06 @ 3:16 pm
Skeeter, I am noting the fact that businesses have adapted to Walmart, and have prospered because of Walmart. One store can sell items from a broad variety of sources (groceries, clothes, electronics, etc.), but they are hard pressed to sell everything in groceries that people would buy. That is where new businesses can prosper, along with other larger businesses that compete with Walmart, as Costco, Home Depot, Menards, etc. have done.
Comment by Econguru Tuesday, Aug 1, 06 @ 3:18 pm
P.S. Now that the tribune is reading the Capfax, make sure they pressure Lovie Smith into wearing the leather jacket when it gets cold. I love that jacket. I am so excited now that training camp has started!!!
Comment by Lovie's Leather Tuesday, Aug 1, 06 @ 3:18 pm
Hey skeeter, I see $5.15 as reasonable. So what makes your opinion more valid than mine?
Comment by Lovie's Leather Tuesday, Aug 1, 06 @ 3:24 pm
The problem with this discussion is that people are trying to define what the other side believes by distorting the other side’s intentions, leading to much huffing and puffing about nuffing.
Let’s stick to what you believe.
Comment by Rich Miller Tuesday, Aug 1, 06 @ 3:24 pm
- Lovie’s Leather - Tuesday, Aug 1, 06 @ 3:24 pm:
“Hey skeeter, I see $5.15 as reasonable. So what makes your opinion more valid than mine?”
First, I am smarter than you. And better looking I’m sure. Beyond that, not much.
People can semi-reasonably argue $5.15 v. $10.00 [although given the buying power of $5.15 there really should not be much debate].
Where the argument goes wrong though is when people claim that the government should not set any minimum wage. That sort of argument, if accepted, would lead to a Mexican system.
Comment by Skeeter Tuesday, Aug 1, 06 @ 3:30 pm
Lovie’s Leather….I will not get into the absurd argument with you that people who work more than 40 hours a week should still be living under the povery level (which 5.15/hr guarantees).
The fact is that people making such low wages cost everybody in the end. When Walmart encourages employees to join state and federal aid programs that costs us. When workers cant afford health insurance that costs us. When workers cant put food on the table that costs taxpayers money.
Comment by HANKSTER Tuesday, Aug 1, 06 @ 3:38 pm
Kids? Did you see my request?
Comment by Rich Miller Tuesday, Aug 1, 06 @ 3:41 pm
To qualify: I BELIEVE, Hankster, that some arbitrary number that defines “the poverty line” is relatively useless to determine the minimum wage in a country where housing prices can vary so greatly. Maybe the minimum wage should be raised. But does that justify some number the government made up?
“First, I am smarter than you. And better looking I’m sure.” I will concede better looking… I am a moderate… So I like to meet in the middle…
Comment by Lovie's Leather Tuesday, Aug 1, 06 @ 4:32 pm
I don’t believe that wages are being set in an efficient, free market environment.
Barbara Eirereich’s book, Nickled and Dimed, describes her experience being hired by a big box: she went through training and orientation and was scheduled to work, without being told her wage. In other words, crucial information to inform the market was purposely missing, withheld, or made harder to access.
Another reason the wage market is not efficient: worker productivity has increased tremendously in the last twenty years. Under classic economic theory, this would make the value of labor — and hence wages — increase. Instead, what we see is increasing income inequality and stagnant worker wages. In other words, any gains from increases in productivity are going to higher executive salaries, not to the workers’ who produce more.
It’s just too hard to justify the fiction that 21st century American commerce comports to classic economic theory. And yet we rarely hear from the business community about how to reform the market — instead, we have bold assertions that the market will sort it out.
Well, the market isn’t sorting it out. Instead, the well-connected use the power of government to increase market inefficiencies (e.g., special tax breaks for companies to relocate; creation of barriers to entry) at the expense of the middle and working class.
Welcome to the Gilded Age, v.2.
Comment by the Other Anonymous Tuesday, Aug 1, 06 @ 4:57 pm
TOA –
How do you measure worker productivity in a service economy or even a retail business?
Comment by Truthful James Tuesday, Aug 1, 06 @ 5:07 pm
TOA,
Probably something along the lines cost of labor compared to sales.
I don’t know, but I’m sure the bean counters have a metric.
That’s part of the problem with all of this… in a few years those check out lines will be completely automated and we’ll look back fondly on those unskilled jobs.
Had we kept those unskilled jobs in the city to look back fondly upon of course.
Comment by Bill Baar Tuesday, Aug 1, 06 @ 7:01 pm
How many jobs are we really talking about here– a few hundred thousand–maybe half a million? Wow, was I was misinformed! I thought we were talking a few hundred combined-total. And here, I was thinking that these big-box enterprises employed about 10,000 people each. Whew– so it isn’t a big diversion to make Daley look a modern north american mayor as opposed to an old-world strong-man then huh? Gee, maybe some of us should stop being so cynical– the guy is trying to lead his beloved city by consensus. I’ll bet he’s working on getting a new press chief. Any body have any names that come to mind?
Comment by Ignatius J. Reily Tuesday, Aug 1, 06 @ 8:19 pm
Everyone who wants to be informed about WalMart’s business practices should at least browse through the following book: The Bully of Bentonville: How the High cost of Walmart’s Everyday Low Prices Is Hurting America.
The author, Anthony Bianco, is not some wild-eyed socialist - he has been a senior writer at Business Week for 20 years. Excerpted factoids from book jacket:
Typical full-time Walmart employee makes $17,600 well below the official poverty line for a family of four.
Only 44% of WalMart’s US employees are enrolled in the company health plan because they can’t afford the health insurance premiums.
46% of the children of WalMart employees are either uninsured or on Medicaid.
40 class action suits in 30 states alleging that WalMart forces employees to work extra hours without any pay.
When a WalMart store in Quebec voted to affiliate with the United food and Commercial Worker’s Union, Walmart closed the store in retaliation.
Annual employee turnover of 50% - WalMart has to hire 600,000 new employees a year - turnover unprecedented in the annals of business.
Sytematic pay discrimination against women resulting in the largest class action suit in history,involving 1.6 million women.
Etc.
Etc.
Etc.
Wlmart is profitable. But its standard labor practices are less than exemplary - it’a a compnay robber barons of the 19th century could appreciate.
Consequntly, WalMart got exaclty what it deserved in terms of the “‘big-box ordinance.” Chicago is an entirely appropriate venue for this type of action given its historical role in the American labor movement.
I’m not a lawyer - so don’t know if the ordinance will withstand legal scrutiny. At worst it’s an important symbolic victory. The Bully of Bensonville got its rightful due. Politicans in other jurisdictions will be taking notice.
Comment by Captain America Tuesday, Aug 1, 06 @ 9:22 pm
re: typical Walmart employee salary. Is that mean or median, or an approximation of mode?
Comment by steve schnorf Tuesday, Aug 1, 06 @ 9:40 pm
Skeeter,
Skeeter, It must be fun to live in a world where you, or a handful of aldermen, get to substitute your judgement of what’s “reasonable” for the laws of supply and demand dictated by millions of voluntary decisions by consumers and businesses.
Comment by Red Wednesday, Aug 2, 06 @ 11:41 am
I find this whole debate to be rather amusing. The city council issuing edicts from on high, trying to do what’s best for the city of Chicago etc etc. If that were the case then these same aldermen who make approx 100k a year and who just voted for a pay raise should pass an ordinance that city officials earning 100k plus should donate 10% of their salary back to the community. We all know something like that wouldn’t happen…because they work so HARD for the people of Chicago. Our city is becoming a laughing stock thanks to these people. Have no fear the equal protection clause will squash this silly ordinance. It’s sad these are the politicians who are running one of the greatest places in the country. What’s even worse is people vote for them.
Comment by ISU REP Wednesday, Aug 2, 06 @ 12:37 pm
Red,
You are great at tossing cheap insults my way, but are not big at responding to the issues.
Enlighten us Red. Share your wit and learning. Tell us: If we abolish a mininum wage, what will prevent the U.S. from becoming another Mexico?
We see what the forces of supply and demand do there. Tell us what is different about America that will prevent it from happening either [of course, you must make that argument without relying on either unions or government regulation of wages].
Comment by Skeeter Wednesday, Aug 2, 06 @ 1:59 pm
Simple Skeeter, supply and demand. Tell me how many good workers Wal Mart or Costco or Target or Jewel will attract with those $1 Mexican wages you keep talking about. The answer is none, which means they’d go out of business. Employers compete for good workers and that’s what sets the level of wages–not the government.
Comment by Red Wednesday, Aug 2, 06 @ 3:47 pm
Red,
Stop going around in circles.
People will not work for less in America because we have a minimum wage — “socialism” in your words.
Mexico doesn’t have any of those pesky minimum wage laws that you despise.
What is the result?
If you get rid of the socialist min. wage laws, what will keep the upward pressure on those wages?
Comment by Skeeter Wednesday, Aug 2, 06 @ 3:59 pm
Skeeter, time to move on, so I’ll let you have the final word. I’ll just say the obvious: the absence of a minimum wage law will not turn the prosperous USA into a Mexican wage ghetto. The vast majority of Americans make much more than the minimum wage. Under your theory, how is that possible? Why is that happening? Don’t these stupid companies know that they “only” have to pay the minimum, as established by the government?
They’re paying more because they HAVE TO in order to compete, to provide the services and deliver the products they need in order to win the voluntary choices of consumers and their dollars.
There was a time when the U.S. was like Mexico, but we grew and innovated, allowing capital and labor to flow to the highest and best uses. As a result, every generation of Americans has enjoyed a higher standard of living. That will continue, but only if we don’t slowly, bit by bit, indulge the arrogance of thinking that a handful of men can decide what’s “reasonable” for milllions of others–simply because they have control of the levers of political power.
Comment by Red Wednesday, Aug 2, 06 @ 4:30 pm
Red,
What were the wage standards and work standards in the U.S. in 1934 (before that socialist law that you hate)?
How about now?
Does Mexico have any similar laws?
What is their experience without a minimum wage?
How about China? You would love their system. No employment protection at all.
Do those workers have a high standard of living?
I consider it a shame that people like you take the benefit of the American system of employment protections — wage and safety — but then have the gall to turn around and insult the very system that has provided you with the standard of living that you now enjoy.
On the other hand, maybe “Red” is a good name for you. Maybe you prefer the Chinese system and their methods of dealing with employees.
Comment by Skeeter Wednesday, Aug 2, 06 @ 4:52 pm
Skeeter –
It is the company’s value of the work being performed which sets the demand. On the supply of labor we have the value to the workman.
There are two marketplaces: the open market, which is recorded and reported wages; and the gray market in which work is exchanged for cas or for bartered goods or services.
In the latter market the minimum wage is a marker. Workers are well aware that the take home pay will be affected by required deductions and taxes. The employer is aware that he must also contribute 6.5% into the social security system, plus medicare taxes and unemployment taxes.
New workers in many studies agree thattheir contributions to social security may never be harvested. Other workers may be part of welfare systems with benefits accruing to them or their families - -benefits which would be affected if they were part of the open market. Withholding can be a regresive tax as well — postponing for up to twelve months the return of earned wages which were sent to Washington and Springfield. Repaid without interest.
At the bottom end the contract between employer and employee to pay cash wages deals with the value of work and the preference for full payment of current wages. Each side benefits.
At this level and in this sector of the economy the required minimum wage is no more than a marker. The federal government might just as well announce from their labor data (if it were ever on time) what the market clearing wage was in the taxable sector for a specific job.
The Gray Market exists. The problem for economists is to be able to factor in employment in the Gray Market to the total workers employed and dtermine the real unemployment rate. They are unable to do that.
So how do wages drop below a given level. Only if there is a surplus of labor or a shortage of jobs.
Both of which are what you see in Mexico. Given the Gray Market we have a very small surplus of labor. A shortage of jobs can occur for many reasons. The market for a locally produced product dries up. International competition with cheap prices drives our prices down.
There are dislocations. In order to compete in the marketplace, companies invest capital and upgrade machinery. Fewer jobs are available in a set industry because sometimes capital works cheaper than labor. The jobs that remain are usually higher skilled and paid to reflect that higher skill.
A Trib article recently pointed out that the failure to upgrade equipment to be able to compete with foreign product is going to cause small machine shops to go out of business. For those companies it is already too late. Third generation manager/owners milked the business and did not understand the market.
The initial price of labor paid to a new worker might easily be less than his value to the company. Over time, as skills are acquired that worker, now trained and knowledgeble, is paid what he is worth.
Comment by Truthful James Wednesday, Aug 2, 06 @ 5:25 pm
Skeeter, you can keep repeating your simplistic and amazingly naive argument with Red, but you’re making a ridiculous statment. Your argument is that if China and Mexico had minimum wage laws, like the U.S., they’d have the same level of wages for the employees working in those countries. That’s nonsense. Those countries don’t have the economic output or productivity or wealth creation of the U.S. A U.S. style minimum wage law there would shut down most of their economy–leaving only a minority of workers employed with the government’s mandated wage.
You attribute the high wages and standard of living of Americans to the minimum wage law? The minimum wage law is irrelevant to all but a tiny number of Americans. We have a high standard of living because we have a mature economy rooted in decades of innovation and the ability of people and companies to act with freedom. I don’t think Red is insulting that system. I think he’s honoring it.
Comment by Econ 101 Wednesday, Aug 2, 06 @ 8:25 pm
Econ,
Ultimately, views like yours are either racist or naive.
Which is it for you?
Do you believe that Americans are better than Mexicans, or are you simply a fool who believes it cannot happen here?
Let’s deal with FACTS:
How was the U.S. standard of living in 1934 before all those employment laws?
Did the Fair Labor act shut down the U.S. economy? What were the predictions then (this will require that you do some research)? What was the actual result?
How is the American standar of living now? Did that mininum wage destroy American freedom?
Enlighten us. The US has this great sense of innovation, but it also has these employment laws that you claim block all such innovation.
How about worker safety? How did that compare then and now?
Your argument — if it can be called an argument — ignores the basics. Most people do not earn the minimum. Of course not. That sets a base. What happens when that base falls away?
Let’s look at what employers do when they don’t have to pay the minimum wage. What is the paid wage of most waitresses?
You can call yourself “Econ.” You can call yourself the King of Siam for all that it matters.
But when you boil it down, you have nothing to counter the facts.
If you prefer a system without wage supports and without rules for the safety of employees, I invite you to go live in a country offering those benefits.
But for you to reap those benefits and then insult them — sorry that doesn’t work.
So, which is it? Are you a racist or a fool?
Comment by Skeeter Wednesday, Aug 2, 06 @ 9:37 pm
I am in Illinois and have worked for Wal-Mart. I will tell you first hand, I was working, and public assistance didn’t want to help me with foodstamps. I was making 7.15 an hour after 1.5 years, raising 3 kids, paying 400 a month house payment, 150.oo a month elec bill and doing this by myself. After taxes and all I was not able to keep up with car insurance, kids’ needs, food, and most of all I had to have a phone due to my daughters medical needs. I did get state assistant for medical but struggled to feed them. I was injured in a non-work related incident that left me unable to be on my feet for more than 4 hours. My dr. suggested quiting my job. I went to work and talked to them about going part time same day shift just shorter hours. They wouldn’t do that. I had to quit. Now they have fought me on unemployment and since I can work I am unable to get disability. I am now unable to wear anything but “flip flop” sandles due to nerve damage on top of my foot. So now what? Wal-Mart comes into town talking about all the jobs, but what they dont tell you the jobs only last for a min of 6 months then they start laying people off. They just built a new supercenter here, and tell ya what it is useless. The 5 acre store is so big, the floor crew is few and far between. They treat their employees like crap, and talk to them like they are dogs. Management does not do their work they push it on to the next person. The next person will ignore it and hope it goes away. They say customers come first but if you try to help a customer, they reprimand you for trying to do so. They are lame,,,,,
Comment by single mom with 3 kids Monday, Aug 7, 06 @ 12:32 pm