Chicago Mayor Vetoes 'Big-Box' Wage Ordinance

Chicago Mayor Vetoes 'Big-Box' Wage Ordinance
November 1, 2006

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)

Chicago Mayor Richard M. Daley (D) has won praise from consumer advocates, business organizations, and neighborhood activists, and condemnation from labor unions and left-wing social activists, for his veto of a "big-box" minimum wage ordinance.

Daley issued his veto September 11, saying in a letter to the Chicago City Council, "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. In light of this, I believe it is my duty to veto this ordinance."

It was the first veto in Daley's 17 years as mayor. Two days later the City Council sustained the veto, with 31 votes to override and 18 to sustain. The council needed at least 34 votes to override the veto.

Daley had spoken against the ordinance in the weeks leading up to the initial July 26 vote in the city council. In a rare display of defiance, aldermen nevertheless went against him and supported the measure by a 35-14 margin.



Big Mandate Averted

The ordinance would have applied to stores of at least 90,000 square feet operated by firms with $1 billion or more in annual sales nationwide. It provided that beginning next July, employees would receive a minimum of $9.25 an hour in wages and $1.50 in fringe benefits, rising to $10 and $3, respectively, by 2010. Automatic annual cost-of-living increases would have applied thereafter.

"The mayor did the wrong thing by our communities when he bent to pressure from big money interests from out of town," said Toni Foulkes, a community leader with the Chicago affiliate of the national organization ACORN (Association of Community Organizations for Reform Now), after the mayor's veto and before the override vote.

"We want the aldermen on the City Council to stand up for their neighborhoods and override this veto, so we can have jobs with fairness and dignity in our communities," Foulkes said.



Vocal Backers

ACORN has been a vocal advocate of minimum wage hikes in cities and states across the country. For several weeks, Chicago ACORN members had gone door-to-door and called Chicago residents in targeted wards to ask their aldermen to override a possible mayoral veto.

Standing with ACORN in support of the big-box wage ordinance was a coalition of unions including the United Food and Commercial Workers, Service Employees International Union, Chicago Federation of Labor, and Change to Win.

Also on board was the Brennan Center for Justice at New York University, which drafted the law.

Wal-Mart, Target, and Lowe's had threatened to delay or kill plans to build stores in Chicago as a result of the ordinance.

Michael Lewis Sr., vice president of store operations for Wal-Mart's Midwest Division, told the Chicago Tribune for a September 13 article the mayor's veto "encourages desperately needed business investment and development" in Chicago.



Neighborhood Support for Mayor

Also supporting the mayor were thousands of residents in some of the poorest neighborhoods in the city.

Rev. Leon Finney of the Woodlawn Organization stood with Daley at a September 12 news conference and declared, "We've been working for 10 years trying to get a big box on 63rd Street."

Finney added, "Mr. Mayor, I want to say this to you: I've served under and worked with more mayors than I care to remember. And I don't remember, though, a time that I was more proud of this city. I want to thank you because now we have a chance to rebuild our community."

Members of ACORN and labor unions stood nearby and tried to shout down Daley, Finney, and other opponents of the wage ordinance.



'A Labor Union Initiative'

Lee Walker, president of The New Coalition for Economic and Social Change, praised the mayor's decision.

"Advocates of the ordinance in the City Council, both black and white, claim it will help poor black Americans, but support for this did not begin in the black community, nor would its effect be to benefit blacks," Walker said. "This is a scheme started as a labor union initiative being introduced in cities around the country, with backing by ACORN, a highly partisan advocacy group based in Washington, DC."

Walker added, "This scheme's purpose is to increase labor union membership and dues collection and put union leaders in a stronger position in dealing with the management of Wal-Mart and other nonunion companies."


Steve Stanek (stanek@heartland.org) is managing editor of Budget & Tax News.

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)