Chicago Mayor May Veto ‘Big-Box’ Ordinance

Published September 1, 2006

The Illinois Retail Merchants Association criticized Chicago’s City Council for passing 35-14 a “big-box” ordinance at the end of July, arguing the ordinance will mean fewer job opportunities for residents who already are poor and unemployed.

The ordinance requires retailers with national revenues of $1 billion or more and stores encompassing 90,000 square feet or more to pay at least $10 an hour in salary and $3 an hour in benefits to employees by 2010.

“We don’t see any advantages at all,” said Rob Karr, vice president of government and member relations for the Illinois Retail Merchants Association. The association represents more than 23,000 retail stores of all sizes throughout Illinois. “The drawbacks are that neighborhoods that are underdeveloped will continue to be underdeveloped. The same neighborhoods don’t have jobs and they want jobs and many of the same neighborhoods don’t have enough grocery options, so they’re going to continue to be deprived of grocery options.”

Mayor Richard M. Daley has threatened to veto the ordinance, but at press time had not said whether he will. His deadline to decide is September 13. While the ordinance passed with a veto-proof majority, by mid-August the city’s newspapers were reporting some aldermen might switch sides rather than oppose the mayor.

Losing Tax Money

In addition to reducing job opportunities and the number of places to buy groceries, the ordinance will cause Chicago to lose tax money, Karr said.

“The city of Chicago is going to continue to see hundreds of millions of dollars in sales taxes going to the suburbs instead,” Karr warned.

Joe Moore, the alderman who introduced the big-box ordinance in Chicago, said the principle behind it “is that a job should lift a person out of poverty, not keep him in it.” Moore said the ordinance gives employees of big-box retailers hope for a better future and that it is unreasonable for people to put in an honest day’s work and still not be able to support themselves.

Moore also said retail sales and job growth have increased in cities such as Santa Fe, New Mexico, where similar ordinances have been implemented. He doubted the new ordinance will result in big-box retailers opening more stores in the suburbs than in the city.

“The big-box retailers [already] have saturated the suburban market” and want to expand in the city, Moore said.

Leaving Town

A week after Chicago’s City Council approved the big-box ordinance, Target halted plans for a new store at a 32-acre shopping mall in the city and at press time was expected to abandon plans to build a 160,000-square-foot store in the city as well.

A Target spokesperson told the Chicago Tribune on August 3 the big-box ordinance’s demand for employees’ increased wages means it would not make economic sense for Target to create other city stores.

Violating Equal Protection

A federal judge in July struck down a Maryland law requiring superstores to spend more on employees’ health care benefits. (See “‘Wal-Mart Law’ Overturned in Maryland,” page 1.) There shouldn’t be different standards for health coverage for stores in different cities and states, Karr said.

“Certainly it’s a clear legal [and] constitutional violation under equal protection,” Karr said. “If our government wants an act to stand, the law to stand, they have to treat the same entities equally.”

The Maryland law, which targeted Wal-Mart, would have called for private-sector employers with 10,000 or more employees to spend at least 8 percent of their payrolls on employees’ health care or to pay the difference in taxes.

Mary Susan Littlepage ([email protected]) is a writer in Chicago.