July 26, 2006 -- Weeks of heated debate ended in passage of a "living wage law" in Chicago -- the first in the nation to target mega-retailers.
City aldermen passed the measure in a 35-14 vote after more than three hours of impassioned arguments. It will require Wal-Mart and other so-called big-box stores, including Target and Home Depot, to pay workers a minimum of $9.25 an hour -- up from the city's current minimum of $6.25.
After the vote, outside city council chambers, supporters of the legislation chanted, "We beat Wal-Mart."
The law will apply only to stores with at least 90,000 square feet and a billion dollars in annual sales companywide.
Community Workers Welcome the News
In one struggling westside Chicago neighborhood, where workers are putting the finishing touches on the city's first Wal-Mart, the new law is welcome news.
"People have bills, rent to pay, and $6 an hour is not going to work for them," says Kanisha Adams, a nursing student.
In this part of the city, unemployment is in the double-digits. More than 9,000 people applied for the 450 jobs that Wal-Mart will offer when the Chicago store opens next month.
But many fear higher wage costs could drive retailers and jobs out of the city, and that could have particular consequences for the city's minority workers.
"African-American, inner city people are in trouble -- desperate trouble," says the Rev. Leon Finney, a community organizer. "We need to do everything we can to encourage business, not anything to discourage business."
Chicago mayor Richard Daley had also spoken out against the measure saying, "This is basically going to hurt the minority community, to be very frank."
Will Wal-Mart Avoid the Higher Wages?
The law will affect 42 stores and 7,500 workers, and has the potential to affect many more. Wal-Mart plans to build 20 additional stores inside city limits. But, with the passage of the law, retailers say that could change.
"What that may mean is that we're going to have to look at serving our customers from the suburbs," says John Bisio, a spokesman for Wal-Mart.
Supporters of the living wage law call that a scare tactic.
"Where are they going to build those stores?" asks Toni Foulkes, a neighborhood activist.
The suburbs, Foulkes says, are already saturated. "Are they going to build a Target next to a Target next to a Target?"
Economists say big-box stores can't afford to ignore the inner cities. In Chicago's south and west sides, the untapped retail market is an estimated $1.2 billion.
"Ultimately, $1.2 billion will be worth much more to those companies than $10 an hour for a living wage," says Dorian Warren, an economist at Columbia University.
Warren says big-box stores have balked at living wage laws before -- in Los Angeles and Santa Fe, N.M., among other places.
"After these policies have been passed, we've seen these stores still come in and still open their doors," he says.
At a bus stop along the abandoned storefronts on Chicago's North Avenue, Yvonne Neal says they could use more businesses and more jobs.
"Get a job first," she says, "and then worry about moving up the pay scale."
Chicago's living wage law is now certain to face legal challenges, ensuring that this passionate debate will continue.