Ordinance Called Big Box Mistake

Discussion
Jul 12, 2006
George Anderson

By George Anderson


The Illinois Retail Merchants Association says Chicago would be making a big mistake if it mandates that big box retailers such as Wal-Mart meet wage and benefit requirements
to operate within the city’s limits.


The association, under counsel from the law firm of Mayer Brown Rowe & Mawe, contends that any such ordinance would violate Illinois and U.S. constitutional law and ultimately
would cost taxpayers money in a unsuccessful attempt to fend off legal challenges to the ordinance.


David Vite, president of the Illinois Retail Merchants Association, told the Chicago Sun-Times, “The ordinance is flawed in so many ways that approving it will
cause significant damage to the reputation of the city, its people and their joint economic future.


“We implore the members of the City Council to abandon this folly, and find effective ways to encourage economic development in the neighborhoods”, he added.


Chicago Alderman Bernard Stone agrees with Mr. Vite’s position.


“Do you really believe that an ordinance that attacks one group of retailers and completely exempts all others can withstand a court test? I know there are a sufficient number
of votes to carry the big-box ordinance. I also know that, if it is passed by the City Council, it will be challenged in the courts, and the people we intend to help will not
be helped,” he said. “Use your vote with discretion.”


Supporters of the proposed ordinance are determined to see it enacted.


Chicago Federation of Labor President Dennis Gannon said, “It’s the 9th inning with two outs. We’ve got this ordinance we’ve worked on for 18 months. We’d be happy to talk to
Ald. Stone after we pass the big-box ordinance — not before.”


Discussion Question: Will Chicago and other local/state governments be making a mistake if they pass laws mandating wage and benefit standards for big box
retailers? How would the enactment of such a law affect the big box retailers, their employees, other smaller box retailers and consumers?

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10 Comments on "Ordinance Called Big Box Mistake"


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Mark Lilien
Guest
14 years 7 months ago

It seems reasonable to have higher standards for big business than small businesses. Certainly there are many precedents: zoning laws that restrict which locations big-box stores may occupy; building codes that require multiple exits for larger commercial spaces than smaller ones; set-asides for small suppliers trying to get government contracts, etc. If the higher standards make certain locations economically unfeasible, the remaining retailers will benefit. Retailing’s worst enemy is excessive competition, not government regulation. Fewer stores mean better profits.

Kai Clarke
Guest
14 years 7 months ago

Ethics, community involvement and outreach. These are part of the foundation that Sam Walton built his company upon, and the mantra that Wal-Mart’s new management is striving to fulfill, as are most large retailers. This means that Chicago should be passing laws to help the community, and retailers should want to become involved. If they don’t, then they aren’t being true to their community and the basis of their business. However, I am convinced that should Chicago take the right steps and pass this law, that other cities and states will follow, and that retailers will embrace it. It is the right thing to do, and the right thing for everyone. Gaining conformity is the difficult part, which is the basis of the local legislation. Hooray for Chicago! Don’t back down because of some fear mongering.

Kenneth A. Grady
Guest
Kenneth A. Grady
14 years 7 months ago
Competition in most things, including retail, is good. Chicago is a unique city in many ways, with a strong labor past. That past can influence the thoughts of many Council members on wage and benefits issues. This is not a case, however, where the Council should be injecting itself. Chicago has a strong economy with many jobs available and a widespread and fairly well functioning transportation system. Big box retailers want to locate there for many reasons, but included is the obvious belief they can find enough employees to run the stores. Artificially inflating labor costs alters the competitive landscape without any real benefit. If wages are too low, the big box retailers won’t be able to hire sufficient employees or will be forced to higher lower quality employees who cannot get better paying jobs. Either way, the big box retailers will be less competitive, giving an edge to the small box stores. If the big boxes can get enough employees at lower wages and benefits, then there is a competitive advantage for the small… Read more »
MARK DECKARD
Guest
MARK DECKARD
14 years 7 months ago

This is simply another “follow-the-money” union ploy. Since the unions can no longer effectively influence issues with their “Hi My Name is: UNION” name tag in full view, they have to work from the shadows under the guise of more marketable “tabliod-style” third-party positioning like wage-envy, sex discrimination, forced off-the-clock work, and so on.

Big city government and union mentality are compatible and both are leading their cities and membership to extinction like a cancer. They can only grow by sucking the life and vitality out of what it’s attached to. All three are ultimately fatal if not treated….

dennis potts
Guest
dennis potts
14 years 7 months ago
It seems to me that Chicago may well be advised to take another look at their recent history with Big Box retailers before passing such an ordinance. If I recall correctly, a few months ago Chicago denied Wal-Mart a building permit for a site located in the city for no other reason than they were simply big — (there may have also been a union component that I cannot recall). The result was that Wal-Mart simply located in an adjacent city and had thousands of Chicago workers lined up seeking jobs. So, Chicago residents had to travel out of the city to find desirable work and Chicago lost whatever revenue might have been generated by Wal-Mart’s presence. Seems to me that they lost in two ways. I believe there is a real risk (beyond the loss of a lawsuit, which seems inevitable) for Chicago to develop a reputation as a retailer non-friendly city which could have serious ramifications on future retail development in the city. I suspect there are many nearby cities more than willing… Read more »
David Livingston
Guest
14 years 7 months ago

This is just feel-good legislation intended to make poor people think it will benefit them. I doubt it will ever be enforced. I wonder why the government does not target all the fast food restaurant chains like McDonald’s, Burger King, and Wendy’s? Is it a mistake? Not if it gets votes for the politicians which is what it is intended to do. Once Wal-Mart steps up and pays the politicians what they want, this will all go away.

Douglas Gray
Guest
Douglas Gray
14 years 7 months ago

So the labor unions fail to rally the employees and now want to impose government constraints. Wal-Mart and the other Big Box retailers should stay in the city. Instead of putting up shelf talkers comparing themselves to a competitive chain they can use the signs to say “You pay $.XX more compared to shopping outside Chicago.” Maybe one of those shopping cart comparisons that some stores have used in the past.

Relocating their stores sends the wrong message to city government. Let the consumers decide if they really want to pay more to shop in their city.

Bill Robinson
Guest
Bill Robinson
14 years 7 months ago

Most most big box stores are clustered in high income neighborhoods where local housing is usually far too expensive for retail workers. These centers usually are poorly served by public transportation. As a consequence in most suburban big box centers thousands of workers are typically traveling more than 20 miles a day to get to and from work. Often they travel from the city where local zoning makes it difficult for big box stores to open. Work related travel costs are eating up more than 10% of the gross pay of most workers. This leaves little extra for the employee contribution of a typical retailer’s health care plan. So, across our economy millions of retail workers are without health care.

When the big boxes cluster within the city, employee travel costs are lower because workers live closer. Public transportation is often a viable alternative. So even without government wage and benefit mandates, urban big box stores are a better deal for workers.

Gene Hoffman
Guest
Gene Hoffman
14 years 7 months ago

Whenever a big box retailer creates strong appeal with a majority of shoppers, it’s tide cannot be stopped forever by politically-imposed statues. To Chicago I say, please don’t try to contain whatever could benefit your area’s economy.

Natural forces will always prevail.

Mark Hunter
Guest
Mark Hunter
14 years 7 months ago

Creating artificial barriers will not keep big-box stores out of Chicago or any other market. Market forces will only create other avenues for big-box retailers to open up stores. When government attempts to create artificial barriers it’s like trying to stop a flooding river by placing a couple of sandbags on a dike; it might stop flooding from that particular spot but it only means the flooding will occur somewhere else.

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