New Law is Big Box Pain for 18 Retailers
Wal-Mart is not the only retailer that will be affected when Chicago’s new “big box” ordinance goes into effect next July. Just ask Home Depot, Lowe’s, Nordstrom, Federated Department Stores, Saks Fifth Avenue, Carson Pirie Scott & Co., Toys “R” Us and others that make up the estimated 18 companies that will now face having to raise wages and/or adjust health benefits coverage to comply.
“It’s certainly stunning,” Susan Wachter, a professor at University of Pennsylvania’s Wharton School, told the Chicago Tribune. “This clearly isn’t only going to affect Wal-Mart. It’s going to affect Wal-Mart’s competition.”
According to a Trib report, many of the big boxes operating within Chicago’s city limits pay workers below the $9.25 an hour mandated by the ordinance. Many others will now be required to offer health insurance to workers not presently covered.
Retail employees working as little as 10 hours a week will have to be covered should the new law withstand legal challenges. Benefits must be worth the equivalent of $1.50 an hour beginning next July with the figure rising to $3 by 2010.
Walgreens, which operates 135 stores in Chicago, isn’t covered by the new ordinance because its stores are not large enough. That, however, is not particularly reassuring to the drugstore chain.
“Our concern is what might happen next,” said Michael Polzin, a spokesman for Walgreens. “Anything that changes the way we have to conduct business in Chicago is going to have some impact on our operations.”
Discussion Questions: What will wage and benefit coverage mandates in Chicago mean for these retail companies in areas outside the city? Will mandated
health coverage for part-time workers, for example, force these companies to offer the same benefits to workers in other areas of the country?