Weekend Question 3: Is Chicago Dumb Enough to Make the Wal-Mart Living Wage Take Effect?
ANSWER: Probably not, but it will be a close call, even given what’s at stake.
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The Wall Street Journal’s subscription-only side had an editorial about this last Wednesday:
Well, that didn’t take long. Just as Mayor Richard Daley and these columns predicted, the law recently passed by Chicago’s City Council requiring a super-minimum wage is driving big retailers out of the city.
Target was the first big chain to react, recently cancelling plans to open a new superstore in a run-down area on the city’s North side. Only a few months ago the project was hailed by city leaders as an anchor for redeveloping that depressed neighborhood. Now it gets to stay depressed. Wal-Mart has also announced that its plans to build 20 new stores in the city over the next five years are “on hold” until the wage issue is resolved.
….. The Council was warned that stores would flee to the suburbs or not be built. But instead it heeded such activists as Annette Bernhardt, chief economist at New York University Law School, who claimed that “We’re very confident that retailers want and need to be in Chicago.” Whoops.
….. Mayor Daley seems intent on vetoing the bill, which he says would result in higher property taxes to compensate for lost sales-tax revenue once stores leave.
….. The entire “living-wage” movement is the latest product of upper-income politicians who want to stick it to non-union companies in the name of helping the poor. But the working poor lose twice in Chicago: first, in lost retail jobs and then in less access to low-cost goods. Alderman Carrie Austin, who represents the area where the Target store was supposed to locate, puts it this way: “My colleagues are saying, ‘Don’t worry they [the big box retailers] will come.’ Well, mine just left.”
It’s amazing how little notice that possibility that Wal-Mart might actually open TWENTY stores (and probably won’t open any more than the one that’s nearly done if the veto isn’t sustained). It looks like Chicago will resist the “living wage” urge to commit municipal suicide. But never underestimate the ability of Windy City politicians to wreck things.
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UPDATE: Taranto at Best of the Web — “A campaign against Wal-Mart is a snob’s idea of populism.”
Heh, Target (pronounced by some as sorta ‘tar SHAY’, as if a French accent mark were over the “e”) was “the first …to react”. I’m continually amazed that Walmart is under so much attack, while Target does the same basic business model yet escapes the wrath of the snobs.(note 1)
If memory serves, Target already has a bank-like operation, yet Walmart is being denied that opportunity.(note 2)
Word-smith notes:
1. “same” business model: Some variance on product content, of course. Target has a credit card segment.
2. Technically, maybe “slow-rolled” is more accurate than “denied”.
Disclosure: Multi-year current owner of WMT (The stock price has been flat. Only up-side has been the small dividend.) Owned TGT for a bit, but actually timed it right and sold at a profit. Recommend Value Line for stock reviews; ask for it at your local library reference desk.
Comment by cornfed — August 20, 2006 @ 9:51 pm
#1, it’s amazing what a slightly better store decor will do. :–>
Yes Tar-jhay has had its own bank for years, including its own Visa card. The hypocrisy is breathtaking.
Comment by TBlumer — August 20, 2006 @ 10:36 pm