The minimum wage ordinance for employees of “big box” stores that the city council’s finance committee passed on June 21 would be a disaster for Chicago consumers and workers [“City may make ‘big box’ retailers toe wage line,” June 22].
Mayor Daley had it right when he said, “The big companies can say, OK, we are going to the suburbs … We will make the suburbs a priority.” Wal-Mart officials have said this will happen, and there is every reason to believe them.
Even if big retailers stay in Chicago and pay at least $13 an hour in wages and health benefits, with annual increases for inflation, most workers won’t benefit. The big stores will hire fewer workers, substituting machines and automation, or just make the shopping experience less pleasant. Smaller retailers will have trouble hiring good workers, because the big stores will outbid them.
As John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas, said, “The new law may make it possible [for smaller retailers] to better compete on prices, but will small retailers be able to attract the best workers who will be lured by higher wages and guaranteed health coverage, something that many small stores cannot afford?”
People seeking entry-level positions–those who are young, inexperienced, unskilled, or ex-offenders trying to re-enter the job force–will be hurt most of all. Retailers will decide those workers are not worth the high wages and benefits. And Chicago’s shoppers will end up paying higher prices regardless of where they shop. This proposed ordinance is bad for everyone.
Steve Stanek ([email protected]) is managing editor of Budget & Tax News, a publication of The Heartland Institute.