Chicago Mayor Vetoes Wage Law

By Ashley M. Heher
Associated Press
Tuesday, September 12, 2006

CHICAGO, Sept. 11 -- Mayor Richard M. Daley vetoed an ordinance Monday that would have required mega-retailers to pay their workers higher wages after some of the nation's largest store operators warned that the measure would keep them from operating a business within the city limits.

Supporters said the measure would guarantee employees a "living wage," but in a letter to City Council members released Monday, Daley said the ordinance would drive businesses out of Chicago.

"I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage," Daley wrote. "But I do not believe that this ordinance, well intentioned as it may be, would achieve that end."

The veto was Daley's first in 17 years in office and is likely to set up a showdown during Wednesday's council meeting.

The ordinance was approved by the council in late July and requires big-box stores to pay workers at least $10 an hour plus $3 in fringe benefits by mid-2010. The rules would apply only to firms with more than $1 billion in annual sales and stores of at least 90,000 square feet.

The minimum wage in Illinois is $6.50 an hour; the federal minimum is $5.15.

Chicago has been at the center of a debate about wages at large retailers ever since the city rejected a proposal by Wal-Mart Stores Inc. to open a store on the South Side, prompting the company to open a store just outside the city limits.

It takes 34 votes to override a mayoral veto. The measure passed 35 to 14, but some aldermen have since indicated they might be open to changing their votes and acting against the ordinance.

Alderman Shirley A. Coleman, who voted in favor of the ordinance in July, said she would switch her vote after receiving assurances from Wal-Mart that the company will build a store in her ward. "I am doing what constituents are telling me is best for our community," she said. "They're tired of going out to the suburbs to shop at Wal-Mart."

David Tovar, a spokesman for Wal-Mart, the world's largest retailer, said the company was eyeing "many different sites throughout the Chicagoland area" but had not confirmed any new locations. The company, based in Bentonville, Ark., plans to open its first Chicago store soon on the city's west side.

The veto drew praise from corporations that oppose the measure. Tovar called Daley's decision a victory for working families.

In a statement, Minneapolis-based Target Corp. said the ordinance "would have discouraged new retail development in Chicago communities needing it most by driving up the cost of doing business."

Proponents of the living-wage measure said they would not give up the fight. Alderman Joe Moore said arguments that such ordinances drive jobs and desperately needed development from some of the city's poorest neighborhoods are untrue.

"The experience of other cities that have done living-wage ordinances is that they help create more jobs and lead to more business development, not less," he said.

Cities with living-wage laws include Albuquerque and Santa Fe, N.M., San Francisco and Washington.


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