Another "big box" bails from Chicago over living-wage ordinance
Cross-posted on Marathon Pundit.
Last month Chicago's City Council passed a "living wage" ordinance that applies to "big box" retailers such as Wal-Mart and Target. But other retailers are also effected.
As I've note in prior posts, Chicago alderman such as Joe "Empty Storefronts" Moore have claimed that the "big boxes" are bluffing about cutting back on expansion plans into Chicago.
Home improvement retailer Lowe's told Chicago Alderman Howard Brookins that their plans to build two South Side Lowe's stores are now on hold, thanks to the ordinance.
Last week, the same "living wage" bill caused Target to postpone the building of two new Chicago stores.
Ald. Moore is in denial about Target and Lowe's canceling their Chicago expansion plans, telling ABC 7 Chicago:
I think it is just another step in the scare tactics and blackmail that a lot of these multi-billion dollar corporations are doing to try to beat this ordinance.
The four stores that won't be opening in Chicago, unless Daley vetoes Moore's bill, are all in low-income areas of the city. These areas are poorly served by retailers.
Many of the people who could be hired--those living in the community--don't have jobs, and since there is little retail presence in Chicago's poorest neighborhoods, Lowe's and Target won't be driving out many established merchants.
Organized labor is the driving force behind the "big box living wage" ordinance. They've threatened Chicago alderman who vote the wrong way on this bill to fund opponents against them in next year's municipal elections.
Caught in the middle of this dispute is "the little guy," whom liberals like Joe Moore and the unions claim to represent.
16 comments:
John -
Only a political neophyte could fail to recognize that this is all about politics and not about whether these stores can still make a healthy profit in Chicago.
Clearly, the Illinois Retail Merchants Association and its sheeplike members are doing WalMart's bidding: trying to pressure black City Council members that support big box, provide political cover for those that opposed it, and give Mayor Daley an excu to veto it.
It's not a bad strategy, and time will tell if this hardball strategy will work. But let's not pretend this is about the merits of the ordinance. Costco has no problem turning a profit while paying it's workers a living wage with benefits, Menard's is still opening it's stores, and until WalMart hoodwinked Lowe's into signing on to this pogrom, Lowe's had assured everybody that the ordinance wouldn't keep them from moving forward.
The funny part is, while Lowe's and Target are stepping up to take a bullet for WalMart, WalMart is announcing 1/3 of its employees will be getting raises, just as living wage organizers are demanding. So, Target and Lowe's go on record as saying "we don't want to pay a living wage", WalMart says it wants to pay its workers more, and Target and Lowe's investors must really be wondering what the heck they are fighting for.
This is a classic hardball negotiating tactic
DJW wants the ordinace spread over all Illinois,
It seems to me that the main problem with the ordinance is that it only covers Chicago. If it covered the entire State of Illinois, then I don' think there would be any reason to think that the big box retailers would leave the market. There are too many consumers here.
WalMart is announcing 1/3 of its employees will be getting raises...
That's what's really dumb about the city council getting involved.
Illinois facing a labor shortage in the near future.
It's just the city council is setting back development by driving out investment.
DJW will have Blago drive it out from all Illinois.
Liberals never used to think like this... it was always jobs, growth, and development; never lets keep the lots empty and overgrown and send the investment to the burbs.
"Liberals never used to think like this... it was always jobs, growth, and development; never lets keep the lots empty and overgrown and send the investment to the burbs."
Bill, who are these "liberals" who used to be so much smarter? Your thinking is fuzzy. Fuzzy meaning wrong. Labor unions lead the fight first for the 8 hour day, and then the five day week, and both times the response was, we'll move our development somewhere else. It's the standard line. But often it isn't true. Just because some people say the sky is falling, don't mean it's so. Get used to it.
I can't recall a time when the City Council ever considered an ordinace like this, or anyone ever suggested they should.
Unions fought for all sorts of benefits, but even after the steel workers massacre no one suggested an ordinace to drive the steel mills out Chicago.
I don't think its a question of smart or fuzzy. It's just a different interest taking over the Democratic party. Bread-and-butter issues no longer at the forfront.
The sky did fall by the way, with a vengence, on African American communities after 1968. They were left without any significant retail and it's pretty much stayed that way.
All this ordinace will do is encourage automation. The technology is there.... it just means less entry opportunites for unskilled people to get their foot in the door, for kids to earn some bucks for school, it's just a bad ordinance all around and people are really fooling themselves if they think it's liberal or progressive.
Home improvement retailer Lowe's told Chicago Alderman Howard Brookins that their plans to build two South Side Lowe's stores are now on hold, thanks to the ordinance.
Last week, the same "living wage" bill caused Target to postpone the building of two new Chicago stores.
"On hold?"
"Postpone?"
That sure sounds more like tactical gamesmanship by the big corporations, rather than the crisis that the chicken-little opponents of a living wage would have us believe.
>That sure sounds more like tactical gamesmanship
No that sounds like all the union plumbers, truck drivers, carpenters, electricians, and steel workers that would have helped to build the store aren't going to be utilized in the short term.
A real negotiater would have killed the ordinace and negotiated for a distribution center over at the old Brach's site, or commitments to invest in local vendors and suppliers.
But no one was thinking that it's the economy stupid with his fiasco.
If the ordinance doesn't get vetoed, then those expansion plans will be canceled.
YDD: As for my being a political neophyte, perhaps that is true. But I'm one who said the "big boxes" aren't bluffing.
"But I'm one who said the "big boxes" aren't bluffing"
John Ruberry is the guy who listens to the Big Box spokesmen say the sky is falling and decides that it must mean the sky is falling. What it means is that the Big Box guys are saying sky is falling. And there's a difference, as any j-school grad knows.
"If the ordinance doesn't get vetoed, then those expansion plans will be canceled. "
Now we're getting somewhere. In five years, most people won't care enough about who John Rubbery is to bother checking this; I'm sure I won't, but anyone who still cares can check this out. If the Bog Box ordinance survives, and there are new Big Boxes in the city complying with the ordinance, then we'll know that John Ruberry doesn't think enough before he types.
It won't take five years, all you have to do is look at WalMart's business plan. They have to open stores within major cities, they will open stores in Chicago. Of course they'll posture and cry poor for awhile and rile up dopes to do their bidding in between rants about fringe university faculty.
...all you have to do is look at WalMart's business plan. They have to open stores within major cities...
Walmart didn't let the plan get in the way when they bailed out of Germany...
...but if you lose money for 10 years, you get out. Wal-Mart wasn’t here to prove their business model works, they were here to make money,” Schlueter said. “Apparently even their patience is not unlimited.”
Nice try. The situation in Germany was totally different. They were trying to move in to an entirely new market. Here, as their current pitch to stockholders goes, the ONLY way they can be competitive for the long-term is to have a real presence within urban centers. They know it, they've already built the rising labor cost in and will go forward. But hey, if they can save a few bucks by having the village idiots carry water for them, and let those poor city folk know they don't deserve a decent living, they're going to do it.
I don't think it's the costs that will keep them out.
It's the uncertainity of our politics and that they'll be made scapgoats by every politican.
They don't need that.
They need the market share and they've been paying sub-standard wages and providing lousy benefits for years. They knew this day was coming which is why they're on the raising wages pr campaign now. The costs are built in to the business plan. They will be in Chicago no matter what happens with the BB ordinance. From a scapegoat perspective this is nothing new for WalMart and will not change their direction. They have no choice. They need to have stores in every major city if they have any hope of maintaining the value of their stock.
Anyone who thinks that stores will not open here because of the living wage ordinance is either shilling for the corporations or a fool. Where else can they peddle their foreign made slave labor junk than here in the land of plenty? God forbid that the City might expect them to pay their employees a respecatable wage in exchange for the millions in tax breaks they recieve so we can buy their trash.
I know they are used to paying $1.00 or less per hour in their sweat shops so it is a shock to them to have to actually pay meaningful salaries. I hope they all go-go to China and let the Chinese buy their own junk.
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