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Late last month, the Chicago City Council voted 35-14 to raise the minimum wage, but only for so-called “big box” stores, or those which occupy more than 90,000 square feet and belong to companies making over a billion dollars annually. Wal-Mart, Target, and other big box retailers will have to pay their employees in Chicago $9.25 per hour and provide additional benefits worth $1.50 per hour.
In 2010, wages will rise to $10 per hour with $3 per hour worth of benefits. From that point forward, minimum wage increases will be pegged to inflation.
Chicago Mayor Richard Daley (D) has until Sept. 13 to decide if he will veto the bill, which has wide popular support. Daley has publicly opposed the ordinance, which has also drawn the ire of major retailers. Unless two Council members, or aldermen, withdraw their support, the Council will have enough votes to override a veto.
“The real catalyst was Wal-Mart wanted to move into our city a couple years ago, and there was quite a bit of controversy surrounding it,” said Alderman Joseph Moore (D), the bill’s sponsor.
Wal-Mart says its jobs in the Chicago area start at roughly $7.25 an hour and the average employee makes $11 an hour. The company has not disclosed its benefits package.
“Chicago is grappling with the same problem that New York is: How to harness economic development to promote good jobs for local residents.” –Paul Sonn, deputy director of the Brennan Center Poverty Program
Moore formed a wide coalition of labor groups, religious groups, and community organizations to help him fight for what he calls a “living wage,” or the amount that certain calculations show are necessary to make ends meet for an average household.
He also found help from the Brennan Center for Justice at the New York University School of Law, which Moore said was “very helpful in helping us draft the legislation and making sure that it would survive court challenges.”
In fact, Chicago’s “Big Box Living Wage Ordinance,” as the bill is officially titled, is just the most recent victory in the ongoing efforts of the Brennan Center to promote living wages for workers around the country. Arguing that these laws help promote economic growth, the Center has worked to pass living wage laws in Sante Fe, New Mexico and San Francisco.
“The big picture here is the federal government hasn’t raised the minimum wage in nine years,” said Paul Sonn, deputy director of the Brennan Center’s Poverty Program. “Washington hasn’t been doing its job, so local and state officials have to step in.”
Sonn noted that 140 cities and 22 states have minimum wage standards above the federal level.
Even while he worked on the Chicago bill with Moore, Sonn has kept his eye on New York, which has a minimum wage is $6.75. The city has a $10 per hour minimum for service companies with municipal contracts.
“Chicago is grappling with the same problem that New York is: How to harness economic development to promote good jobs for local residents,” Sonn said.
He has proposed that New York require that companies pay a living wage in order to receive money from the city’s Economic Development Corporation.
Alderman Moore also sees similarities between the political conditions in the two cities. Some big box stores, like Best Buy and Target are already established in the city, but others, like Wal-Mart, have been resisted, in part due to concerns over labor conditions.
“The same kinds of coalitions that exist in Chicago exist in New York City,” Moore said. “You need to have a broad cross section of grassroots support to convince colleagues that it’s not only the politically smart thing, but the right thing to do.”