Skip to comments.Target threatens to leave city (Chicago) if 'big-box' wage rule passes
Posted on 07/14/2006 4:02:49 AM PDT by Chi-townChief
Target is putting plans to build three South Side stores "on hold" -- and making veiled threats to close existing Chicago stores -- if the City Council mandates wage and benefit standards for "big-box" retailers, African-American aldermen warned Thursday.
The saber-rattling is intensifying as the clock winds down toward a July 26 showdown vote on plans to make Chicago the nation's first major city to establish a "living wage" for stores with at least 90,000 square feet of space operated by retailers with $1 billion in sales.
Minneapolis-based Target becomes the second retailing giant to threaten to pull out of the lucrative Chicago market in a last-ditch effort to stop an ordinance championed by organized labor that breezed through the City Council's Finance Committee 15-6 and has attracted support from 33 aldermen.
The current federal minimum wage is $5.15 an hour. Illinois' minimum wage is $6.50
Most Chicago area Wal-Mart employees average $10.99 an hour, with just a few making the starting wage of $7.25 an hour, Wal-Mart spokesman John Bisio recently said.
As of 2004, Target in many cities had a starting salary of about $7 an hour, published reports said. A few Target workers outside Illinois said they recently started with salaries as low as $6.25 an hour, according to postings on the Target Union! (www.targetunion.org) Web site for store employees.
Wal-Mart has threatened to cancel plans to build as many as 20 Chicago stores over the next five years if retailers are required to pay employees at least $10 an hour and $3 in benefits by July 1, 2010.
'It would be devastation for us'
Mayor Daley is taking the threat seriously. He has challenged aldermen who oppose Wal-Mart's 20-store expansion to describe how they would replace the 8,000 lost jobs.
Target failed to return calls on the admonition communicated to aldermen of the 5th, 9th and 34th wards in recent days. Target real estate executive Chris Case was scheduled to meet with African-American aldermen Thursday, but the meeting was canceled because of scheduling conflicts.
Ald. Carrie Austin (34th) said a Target pullout would be devastating to the 32-acre shopping mall at 119th and Marshfield that developers had hoped to build, with help from a $23 million city subsidy. Home Depot would likely follow Target out the door. As many as 1,000 jobs would be lost, Austin said.
"It would be devastation for us. Our largest employer in the 34th Ward is the Police Department. The second-largest for us would be Jewel. We have no other resources," Austin said.
Referring to the anti-Wal-Mart movement that gave birth to the big-box ordinance, Austin said, "If you want to bully up on Wal-Mart, you've got to bring in the other ones, and damned if you do on them. If they suffer from it, too bad. If you want to control Wal-Mart, you should go about that a different way."
Accused of 'bullying tactics'
Ald. Leslie Hairston (5th) said she has a letter of intent from Target to build a new store at Marquette and Stony Island in her ward. But the developer has told her the store is "on hold" and that Target may close existing Chicago stores if the big-box ordinance goes through.
Hairston called it little more than a scare tactic. And even if the threat turns out to be real, she's standing firm in support of organized labor.
"Wal-Mart and Target could pay their people a living wage. Then we wouldn't have this problem, and people could actually live on the money they made," Hairston said.
Ald. Joe Moore (49th), chief sponsor of the big-box ordinance, accused Target and Wal-Mart of using "bullying tactics" to stop a train that has already left the station.
"It's an idle threat. ... They're clearly trying to ... intimidate members of the City Council. I am very hopeful that members will hold firm. ... The votes are still there," Moore said. He predicted 33 votes for the ordinance, "maybe more," even though Daley has been buttonholing aldermen to try to stop it.
Ald. Howard Brookins (21st) is still searching for a big-box retailer to replace the Wal-Mart his colleagues nixed at 83rd and Stewart.
Brookins said Wal-Mart executives have told him they may take the lead of the riverboat casinos that ring Chicago and run free shuttle buses to their suburban stores if the big-box ordinance passes.
"I don't know if it was in jest, but they did say it. ... That is an option that they could employ. They could set up locations to have pickup and dropoff. I don't think that is that farfetched," Brookins said.
Well, since welfare benefits are not unlimited anymore, it really doesn't matter. We just wait for them to starve to death. Problem solved.
It's not profitable to break a bunch of leases and close shop, either. If your competition must pay the same wages, then a better solution is to jack up your prices and blame the City for increasing the minimum wages. It's the same problem Walmart has in Maryland. They aren't going to leave the state just because the state requires health insurance. They are going to increase their prices and use the health insurance requirement as an excuse to do so. If you don't like the higher prices, then your recourse is to vote out the idiots who voted for it.
My My, my - will wonders never cease.
Ah, another uninformed person...
I am pretty sure, although I can't verify, that Target decided to finally start fully enforcing its "no soliciting" rule as a result of some gay organization that wanted to solicit on Target property. In the lawsuit where the gays sued Target, they claimed that the Salvation Army was able to solicit, but they weren't. The judge ruled that the gays would be able to solicit on Target property, so you could expect your kids to hear "say YES to gay marriage" while dropping the dollar in the red Salvation Army bucket at Christmas time. Target decided the best course of action was to not have any soliciting.
There's also this:
Target has one of the largest and most respected corporate philanthropy programs in America, donating more than $2 million per week and hundreds of thousands of volunteer hours each year to non-profit organizations across the country. Forbes magazine recently ranked Target as the "Most Charitable Company in America."
Target also donates very heavily to Republican campaigns over Democrat campaigns.
I don't mean to be unkind, but if the base wage for big box store employees was not established by a free market supply-demand, many of the present employees would not have that job. Big box stores have found a way of usefully employing people of minimal skills who would otherwise be jobless and a drain on social infrastructures.
Offering $15 per hour in a fully employed economy simply pushes out the less skilled and less socially adapted from jobs they want and need. Go to one of those stores, look around; many of those employees are working at the highest level that their abilities permit.
Double the wages, go back into that same store. Do you think you will see the same employees, wearing Prada? Think not. The free market is built on getting value for money spent. A whole new set of faces will be in that store if it can possibly withstand an artifical government wage requirement.
"Employees should be paid according to their worth, not some arbitrary amount set by politicians."
I definitely agree with that statement, neither politicians, Aldermen or city councils should dictate what a corp MUST pay their employees. And I also agree they should be paid according to their worth, the majority of us do not know what the big box corp's profit margin is which is irrelevent to this argument only if and again the taxpayer is not having to subsidize their bottom line.
True, if the company pulls up stakes and doesn't hire the low-wage employee to begin with in most cases the taxpayer still pays for some welfare benefits but I think there are requirements that to collect welfare benefits you have to have a job, perhaps I am wrong about that.
They had a couple of those stores in New Orleans.
Thank you both for your assessement of this issue. I do see your point thank you for seeing mine.
It's been an interesting debate with a lot of good posts.
Yes smartass, I now know that is an urban legend.
The social engineering in city council is unbelievable. I have asked them to tell me who will pay to defend the lawsuits that will follow. I know the good old taxpayer will get stuck with the bill.
Laws that target specific companies remind me of a soviet style government. This law punishes the poor by NOT providing jobs and increasing the cost of normal goods by not having these types of stores in the areas of need.
Would you be surprised that Walmart first and foremost and Target second is shopped by affluent shoppers rather than just the poor?
I'd be surprised if you could come up with a reputable source for that. By reputable I don't mean stop wal-mart.org or other democrat/union run site.
That is true, but it actually punishes everyone because of a loss/lack of jobs and normal goods.thus a loss/lack of taxes.......and it continues to trickle on down.
I am happy to see Target stepping up to the plate here.....but I just wonder how much good it will do.....or if they will hold firm in their position. (same with WM)
And Salvation Army is NOT among those charities. Before calling people uninformed, you should probably get your facts straight. Feel free to shop at Target and I will feel free to avoid them.
I have no "reputable" source I live near a town where affluent people live and shop called Plano TX, Aikman once lived in this town along with other celebrities. I rubbed elbows with them in the Super Target that we shop at. Sorry if that isn't the source you are looking for. Go to a Walmart parking lot in Plano and see the expensive SUV's such as a Hummer and see the ladies carrying their designer purses and wearing designer jeans along with gold Rolex's, yes they do shop Walmart and Target especially around the holidays.
If the Wal-Mart in Plano is in an affluent area or if all of Plano is affluent then of course a lot of their customers may be affluent, I've never been to Plano Wal-Mart but have been to the Wal-Mart in Gatesville, Texas and their customers seem to be about the same as I've seen everywhere else, just ordinary people looking for the best prices.
It's the same in every Wal-Mart in different parts of the country and I have been in a lot of them.
That's right, people who shop Walmart, Target "big-box" stores aren't necessarily all very poor, there are poor, affluent, and everyday folk like you and me looking for best prices. We found that Target and Walmart superstores have the best prices on most grocery items, cheaper than TomThumb.