RTA & Wal-Mart
Friday I was driving my son to and from swim practice and heard two ads 
on WBBM radio urging Chicagoans to
Tell your alderman to vote against the big box ordinance.Then, I read John Kass’ Chicago Tribune column, which explains the politics of the fight which pits labor unions who do not want competition for their union-organized grocery stores Jewel and Dominick’s from Super Wal-Marts against those who wish to maximize city sales tax revenues and spur business development within Chicago’s boundaries.
Don’t box us out.
Paid for by Wal-Mart
A third counter pressure—part of the “Don’t box us out” campaign--appeared in the form of a rally of church leaders wanting city jobs.
But there is another aspect to the story that concerns the RTA.
Chicago interests have long coveted the sales tax dollars paid by Chicago residents in stores located in Chicago’s suburbs.
Anyone with a brain can figure out Chicago loses when a Wal-Mart is turned down by the City Council on the south side of Chicago and one is then built right next door in Evergreen Park serving the same market.
But, there is an impact on Regional Transportation Authority funding as well.
The union contract- driven Chicago Transit Authority gets all of the RTA sales tax collected inside Chicago. It does not get the sales tax collected in suburban Cook County, even it is Chicago residents doing the shopping.So, imposing restrictions on a private enterprise like Wal-Mart that convinces it not to build new stores in Chicago hurts not only
· the residents who might get the jobs,And, it increases the pressure on Chicago politicians to raid the revenue sources of the suburbs…still again…in order to feed the seeming insatiable financial appetite of the Chicago Transit Authority.
· the city that will not get the sales tax,
· the schools which will not get the property tax, but it also hurts
· the CTA
Meanwhile in Maryland, as Marathon Pundit informed me on Wednesday, a Federal District Judge has ruled a big box law requiring large Maryland companies to allocate as much as 8% of their payroll to health-care costs would cause a prohibited "legally cognizable injury" violating the "fundamental purpose" of the Employee Retirement Income Security Act, also known as ERISA.
The proposed Chicago ordinance takes a different tack. The Tribune says,
If enacted, the measure would require stores with at least 90,000 square feet and $1 billion in annual sales company-wide to pay workers a minimum of $9.25 an hour plus $1.50 an hour in benefits.
Just a sample of what is available at McHenry County Blog.
8 comments:
Again, this is what is really busting my chops, how can the Chicago Alderman demand a big pay raise and short change the poor they are sworwn to protect? Such greed. Targets are going out of business in the suburbs, so how do they hold the cards. Or let the Walmarts in a organize them, like I said a long time ago.
I do not like the Walmart model and it is not ideal for US BUT
they are here to stay and if they are going to be in the city or the suburbs might as well be in the city
and, regardless of what the city decides, wal-mart (and others) are going to fight to be there. unless you can come up with another way that they can meet their revenue targets and keep the wall street analysts happy, wal-mart has to stick to its expansion plans for urban centers. they've laid out to investors how many dollars they think they are missing by not being there, and it was staggering.
of course, wal-mart could changes its ethos, decide to allow those dollars to go elsewhere and build more stores in, say, china -- i'm sure that would be more profitable!!! this fight isn't about expansion, it's about control. wal-mart's coming into chicago even if the city council forces them to pay $20 an hour! they want our money...
Sorry about the prior post, no spell check. It is really sad to think life would somehow be better in Chicago with Walmart. Daley should use TIF's to plow money into minority neighborhoods and help the poor build their own Superstore. How about "BlackMart"?
Or how about "HispanicMart" Walmart sells made in China junk, and sends the profit out of state. Build the neighborhoods up from with-in. And Union. Patrick McDonough
Assuming it survives appeal, the Maryland District Court ruling seems to blow an unpluggable hole in the Massachusetts experiment requiring employers either to provide a health insurance benefit or pay into a state fund. A plan which the Tribune seemed to like. Go figure.
For WalMart, this is about something much, much bigger than paying a decent wage to its workers.
WalMart's entire business plan is based on being able to dictate its costs: to suppliers, to its employees, to local governments in the form of tax breaks.
The big-box living wage ordinance is a threat to this business plan. WalMart could conceivably still make a profit at city stores even if had to pay higher wages; the higher volume generated by city stores would make up the shortfall, or WalMart could charge modestly higher prices in the city (and still be competitive on price).
No, this is about what economists call monopsony power -- the power to control suppliers. (See July's Harper's for an excellent article on this issue.)
If a company can dictate its costs, we are no longer operating in an efficient free market; this is a market failure. WalMart thrives in this environment, and views the big box living wage as a threat to its privileged position.
Defenders of the free market should be proposing ways to rein in WalMart's monopsony power, rather than simply pretending that everything is OK with WalMart's low wages.
For some reason, the right never wants to answer the real issue:
If you allow companies like Wal-Mart that do not provide real health care benefits, would you prefer:
1. A world where the working poor do not have access to healthcare; or
2. Raising taxes to pay for more government provided health care?
What is your solution?
In the alternative, how about forcing employers of a certain size to provide health care benefit? No, wait, you've ruled that option out.
So which is it: No health care for the poor or expanded government?
Amy,
Can we raise your taxes so that we can now afford public health care for the new Wal-Mart employees?
In the alternative, maybe we should allow Wal-Mart in but have some sort of law making sure they pay a living wage and provide health care for their employees.
Or would you prefer that the working poor simply be denied health care?
Which option works for you Amy?
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