Mayor Richard Daley's veto of the so-called "living wage" ordinance in Chicago yesterday represents nothing more than a short respite in the fight going on in that city and elsewhere between those looking to force big box retailers to pay higher wages to employees and those who feel such a requirement would do significant damage to the very people and communities it is intended to benefit.
In vetoing the ordinance, which passed the Chicago city council in a vote of 35 to 14 in July, Mayor Daley said, "I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage. But I do not believe that this ordinance, well-intentioned as it may be, would achieve that end. Rather, I believe it would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most."
Chicago's Mayor joins many retailers and business groups in opposing laws that would require companies such as Wal-Mart and Target to pay employees predetermined wages and benefits. According to the Illinois Retail Merchants Association, there are 42 stores in Chicago that would fall under the ordinance if the city council were to override Mr. Daley's veto.
In the Chicago case, retailers covered under the law would have to pay a starting salary of $9.25 an hour, compared to the federal minimum wage of $5.15. Stores would also be required to pay for benefits at the equivalent of $1.50 an hour.
Discussion Question: Most in retailing oppose "living wage" laws, but do large national retailers have the ability to better provide for store employees than they are currently without compromising their competitive position?
We don't know the answer to the question we've posed.
We have wondered from time-to-time, however, if the amount of money going to executive compensation, as well as areas such as charitable giving and political lobbying, wouldn't be better spent on employees who make such a large contribution to the success of large retail companies, such as Target, Wal-Mart, etc.
Sam Walton, during his lifetime, seemed to be of like mind on the idea of spending company money outside of the business. Mr. Walton wrote in his 1992 autobiography, Made in America, "We feel very strongly that Wal-Mart really is not, and should not be, in the charity business."