Wal-Mart is due to open its first store in Chicago this summer, which is expected to bring more than 400 new jobs to the Austin neighborhood on the West Side. Austin hasn't seen many new jobs in recent years, even as other parts of the city have thrived.
Yet some Chicago aldermen want to welcome Wal-Mart with a slap to the head. They're pushing an ordinance that would require all so-called big-box retailers in the city to pay their workers at least $13 an hour in wages and benefits. The $13 minimum would apply to anyone who works more than five hours a week in a store larger than 75,000 square feet. A University of Illinois at Chicago study last year estimated that, as of 2003, this would have applied to about 35 stores in Chicago.
So why Wal-Mart workers and not, say, Radio Shack workers?
Ald. Joe Moore (49th), sponsor of one of several versions of the wage ordinance, argues that the largest retailers "can absorb the higher wage costs." And, he said, "they have nowhere else to go."
Now, as far as we know, Ald. Moore does not have a background in retailing. He worked for the city's Law Department before he joined the City Council. But even if he were Ald. Sam Walton, we'd argue that a City Council member has no grounds for telling a private business what wage scale it can or can't "absorb."
And make no mistake, retailers do have somewhere else to go. There are 18 Wal-Mart stores in Chicago's suburbs. The city is about to get its first.
If the City Council were to mandate a different minimum wage based on the square footage of the employer, the ordinance would be challenged in court as a violation of the right to equal protection under the law. The argument: Why should government burden some retailers with higher costs and not other retailers who sell the same goods and services?
The City Council, in feel-good mode, doesn't want to acknowledge that there would be consequences to mandating higher wages on some employers. Those employers are likely to hire fewer people, or reduce hours, or raise prices. Or look more favorably on opening or expanding stores in the suburbs. Those at the bottom rung of the labor market--the uneducated, unskilled, those with no experience--will have a harder time getting hired.
Is that a chance the Chicago City Council wants to take, that it will push more jobs to the suburbs?
HT: Right Mind
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