Well, the Chicago City Council passed its living wage ordinance affecting only “big box” retailers, the Walmarts and Targets of the world that I complained about in anticipation of its passage. And, as I predicted, the retailers are stepping back from Chicago as fast as they can:
In a big-city showdown with Chicago’s “big box ordinance,†Target announced today that it was scrapping plans to build a store on the city’s North Side. Big-box ordinances, a relative of living-wage laws, require large retailers like Target, Home Depot and Wal-Mart to pay a minimum wage closer to $10 an hour versus the Federal minimum of $5.15 and in some cases offer health coverage. The ordinances have become popular in big cities, a relatively unexploited market so far for big-box retailers. But are the ordinances ultimately hurting the very city residents they allege to protect?
Opponents of the ordinance aren’t limited racist, poor-hating, union-opposed Republicans. Mayor Daley hates the idea, too:
The great big-box debate is about nothing less than “the future of the city of Chicago,” Mayor Daley said Thursday, in the strongest indication yet he intends to veto the “living wage” ordinance.
Daley tipped his hand one day after Target pulled out of a 32-acre shopping mall at 119th and Marshfield and hinted strongly it would cut and run from the North Side’s Wilson Yards project as well.
Target becomes the first retailing casualty of a landmark ordinance that would require retail stores with more than 90,000 square feet of space owned by companies with more than $1 billion in annual sales to pay their employees at least $10 an hour and $3 in benefits by 2010.
“This deals with economic development and the future of the city of Chicago. . . . Businesses don’t have to be in Chicago. . . . If they don’t feel welcome, they’ll go someplace else. . . . They can build on the other side [of the city limits]. . . . They’re going to get our customers anyway,” Daley said.
You don’t need to take my word for the fact that this ordinance is economic idiocy. Nobel prizewinning economist Gary Becker and noted jurist Richard Posner have made the same arguments and more. Posner has further elaborated on the likely unconstitutionality of the ordinance.
I’ve had an epiphany in understanding this move by the Chicago City Council and I thought I’d share it with you.
This ordinance isn’t about helping the working poor. If it were a more effective strategy would be to encourage low-cost mass retailers to enter the city of Chicago in droves and use the increased sales tax revenue to give direct or indirect assistance.
The ordinance can’t be motivated, as I originally thought, by simple economic illiteracy. The members of the City Council have been lectured by so many people on that subject that simple ignorance is no longer a credible explanation.
The ordinance can’t be motivated by a desire to raise their stock with labor unions. For a regular Democrat officeholder in the city of Chicago this is hardly necessary. Where would the unions go? Republican? Non-regular Democrats are, if anything, less favorably disposed towards unions than are regular Democrats here.
I believe I’ve arrived at the reason for this action.
This is a symbolic action. It is not intended to actually help the presumed beneficiaries. It is intended to send a signal.
For an insurgent that’s a perfectly reasonable course of action. Insurgents engage in symbolic behaviors—demonstrations, rallies, guerrilla theater, and so on—because they don’t have the power to engage in pragmatically effective behavior.
A quick glance through the biographies of the various city council members suggests that there’s a core of the city council who cut their political teeth as activists, either in the civil rights movement of the 1960’s, the women’s movement of the 1970’s, or various other interest groups. I think they view themselves as insurgents.
For an regular Democrat office-holder in the city of Chicago to view himself or herself as an insurgent is macabre. It would be difficult to be more a part of the entrenched establishment. There are virtually no Republicans in the city of Chicago and nearly all the officeholders are regular Democrats.
It’s time to put aside symbolic actions. If you want to send a message, use Western Union. We’ve got to consider the actual effects of policies.
It’s more than symbolic, when you consider all the political influence exerted by the members of the Chamber of Commerce, etc, who own the stores that Wal-Mart, Target, and Home Depot would be competing with. A lot of these guys view a neighborhood full of customers as their personal hunting preserve. People don’t go to the big boxes ’cause they like a big building, they go there ’cause it’s cheaper.
You may be right, EIT, but, as I see it, those small retailers are dead letters. They won’t preserve their customer base by rent-seeking. It will just force consumers to travel a couple of miles to Maywood, Cicero, or Evergreen Park.
The Chicago city council seems to have concluded that all the real problems have dealt with. Now they have spare time to run off Target and attack their own thriving restaurant scene by dictating menus.
I’m out of touch nowadays with Chicago politics — is this nonsense just a couple of guys looking for a name recognition boost prior to elections?
No, there actually seems to be a broad base of support within the City Council for idiocy.
I actually think that there are lots of reasons for this and that the problem extends somewhat wider than just Chicago. In my view the core problem is that the path to political office is overwhelmingly either through political activism, the practice of law, or inheritance. That inevitably provides a somewhat distorted view of things.