Chicago Big-Box Wage Debate: Follow-up

Several good points were made in the comments thread of Thursday's post regarding Chicago's proposed $10 big-box retailer wage that deserve a fuller airing. The Chicago city council will decide on Wednesday, July 26, 2006 whether to require businesses with locations of more than 90,000 square feet in size to implement a $10-an-hour minimum wage within the city limits. Voices have been passionate on both sides of this issue, with the Chicago controversy being but a part of a truly national debate. However, the main opposing points are singular enough to summarize:

"Walmart is negatively affecting the national economy and bringing everyone's earning power down. We can't make headway on a national wage bill, but at least we can spur change at the local level. We have to make a stand somewhere."

Versus

"The big box retailers will leave town and take their jobs and sales tax receipts with them. Without a national wage law, the big-box retailers will always have another jurisdiction to escape to. Lower-income Chicagoans will have even worse access to jobs and shopping opportunities. And why shouldn't all local retailers be required to pay a living wage, anyway?"

Commenter Jacob was clearly in favor of the proposed Chicago legislation, decrying Walmart's titanic power to dictate to the market:

"Wal-Mart, as a recent article in Harper's brilliantly elucidates, is an example of a monopsony, a consumer version of a monopoly. Neoliberal economics has poisoned the conversation around what is a monopoly, leading us all to believe that if you can shop someplace else or buy someone else’s product it’s not a monopoly. Wal-Mart, by virtue of its extreme market power is able to dictate the behavior of suppliers, even large ones like Proctor and Gamble. The question then is how much negative externalities Wal-Mart injects into the market. The article in Harper's indicates there a quite a few. In other words, Wal-Mart especially, does not occupy a “niche” in the retail market. It is a monopsony that is skewing the natural functioning of many productive sectors of the consumer product market."

Sarah Massey, formerly of the AFL-CIO and the National Employment Law Project, agreed, adding:

"Another negative aspect of the Wal-Mart trend is what Big Boxes do to suppliers. They force suppliers to lower, lower price at all costs, forcing manufactures to flee the country to find workers without wage and hour protection – in CHINA. In IL, we’ve seen Maytag close as a result of this. I’m sure there are a ton of examples. So, IL workers lose their jobs at decent wage rates (union), because Wal-Mart pushed the manufacturer to lower prices, then Wal-Mart land grabs with incentives from local govt. promising low prices and "choice" to the community (see Jacob’s post) and puts everyone to work at low wages. This literally happened in Ohio with Huffy Bikes. Remember Huffy? That’s what the folks in Chicago and D.C. are fighting."

Commenter Larry took a more libertarian view:

"I understand the psychology behind Jacob and Sarah's demonizing of Wal-Mart and Target. I definitely don't share it. Whether or not these retailers provide a 'living wage' or not shouldn't be part of the issue. These big box retailers are in business to make money. The more laws/taxes/restrictions the city and for that matter the state put on them the lower their profitabilty. At some point it is no longer profitable to run a local store...Regarding the business plan of a Target or Wal-Mart, you can argue about whether it's wrong/immoral. The fact is, once it becomes unprofitable to operate a store/business in an area, that business will just leave. And that is why Indiana is landing new manufacturing jobs (Honda) and Illinois is losing (Maytag)."

While I'm definitely on the side of Jacob and Sarah, we disagreed on the correct theater where the war for the lliving-wage law should be fought. I responded:

"I totally agree with you: it is fully within the bounds of legislators to regulate big-box retailers. But as I've repeated, local laws in local jurisdictions simply make matters worse -- locally -- while not fixing the problem globally. We need national, or at least statewide, movement on this issue. City-by-city strategies just push the sales tax receipts and jobs that big-box retailers generate into other, more welcoming municipalities. As long as there are cities that wouldn't require Target or Walmart to pay a living wage, why would they stay in a city that tried to force them to do so? Just because national movement on this issue is impossible right now doesn't mean that local movement is a wise alternative."

Just where this debate will take our city, and our nation for that matter, remains to be seen. For now, I'll keep adding the URLs of related articles and posts to my linkblog tagged for "Chicago politics wages". URLs with that tag will be automatically updated below.

This is a debate Chicagoans should pay attention to. If Target, especially, leaves town, there's not a lot to replace its particular stylishly discounted shopping experience. Really, friends. Kmart is not an option.

(from my del.icio.us)