Jean Cain, Times-Herald, 6/6/07
“Stop this Wal-Mart”

Jared Bernstein and Josh Bivens, The Chicago Sun-Times
"Wal-Mart could pay workers more without big price hikes"

The City of Chicago is in the throes of fundamental debate about the future direction of the American economy and its workers, one that touches on our most pressing concerns, from globalization to the role of government. All of this is wrapped up in a seemingly parochial law that would mandate higher wages and benefits for large Chicago retailers.

The ''retail living-wage ordinance'' currently being considered by the City Council would make large retailers (with stores of at least 90,000 square feet) pay a starting wage of $10 an hour, plus $3 of health benefits. Though the proposal would apply to numerous large retailers in the city, including Target and Costco, it quickly got the attention of Wal-Mart. To put it mildly, the world's largest employer, with plans to open numerous stores in the city, wasn't happy and immediately threatened to suspend the store openings.

Cutting through the noise that such debates typically generate, the central question comes down to this: Can Wal-Mart do better by its workers and still profitably offer its trademark ''everyday low prices''? The firm says ''no,'' stating that the

Our research suggests otherwise: The $13 an hour total compensation cost mandated by the Chicago ordinance is roughly a 20 percent raise over what Wal-Mart claims to pay its employees. A raise of this size could be financed through a combination of Wal-Mart allowing its profit margin (after-tax profits divided by sales) to fall from its current 3.6 percent to 2.9 percent and by raising its prices 0.7 percent -- less than a penny on a $1 pair of socks.

The resulting profit margin would be higher than some competitors (Costco, for example, at 2 percent) and lower than some others (Target, at 4.7 percent). Most relevant, Wal-Mart's profit margin would still by higher than the average that prevailed for Wal-Mart from 1996-1998, perfectly good years for the firm. Moreover, if Wal-Mart's price advantage is anywhere near as large as it claims, such a small price increase will not erase its competitive edge.

In short, our findings suggest that Wal-Mart and Chicago can help each other. The store can expand its market share in a major American city while offering Chicago consumers low-priced goods. At the same time, it can more fairly share its profits with its workers, without sacrificing its price advantage. Unfortunately, its business practices are such that it's unlikely to do so without the ordinance.

There is a message here that goes beyond Chicago's city limits. Our economy has seen a growing job quality problem for decades, replacing jobs with family-sustaining wages and benefits with jobs of far lesser quality. Workers in these new jobs (which are disproportionately retail) have yet to develop ways to raise their bargaining power with their employers. Wal-Mart, in particular, is vehemently anti-union.

In this context, a useful way to view rules such as the Chicago retail ordinance is as society's way of offsetting the inequalities that have evolved along with the new economy. While globalization and other forces have put many high-paying jobs at risk, we need to do all we can to ensure that jobs that can't be done abroad are good ones. Viewed in this light, the ''City of Big Shoulders'' has an opportunity to point the way toward the high road. We hope they take it.

Jared Bernstein and Josh Bivens are economists at the Economic Policy Institute, a nonprofit and nonpartisan think tank in Washington, D.C. Their recent study of Wal-Mart can be found at www.epi.org.

Jim McAsey, Newsday (Nassua and Suffolk Edition), 6/22/06
”Companies don't share the wealth”

Regarding "Preserve, and fix, IDAs" [Editorial, June 16], we at Jobs With Justice-LI disagree with the assertion that prevailing rate and living wage reforms are "unnecessary." Companies should not receive tax breaks unless they will provide services that will benefit the community. Creating jobs is important, but we have to ask "what kind of jobs?"

Are they Wal-Mart-type jobs, or are they jobs that allow people to earn a living wage? Too many companies receive corporate welfare and then proceed to pay poverty wages. That is immoral and unacceptable.

For example, a company in Melville received millions in tax breaks and now employs janitors at or close to minimum wage. Full-time janitors making minimum wage earn only $14,040 a year. That's hardly a wage that would allow one to support a family, even if both parents are working. Other cleaners in different buildings, particularly union members, make far more. But when irresponsible competitors undercut them, how can they compete?

Tax breaks are not free. Tax dollars that are given away to irresponsible, union-busting businesses like Cablevision could have been used to fund our school districts. Money is being taken away from our youth and given to companies that lie to taxpayers and cheat their workers. That's bad policy.

Jim McAsey

Ald. Joe Moore, Chicago Sun-Times, 5/30/06

As one of the sponsors of the Big Box Living Wage ordinance, I must respond to the Sun-Times misinformed editorial regarding the proposal ["Wage war against Wal-Mart, and Chicago gets hurt," May 22]. By blindly asserting that a living wage requirement would cost Chicago jobs and tax revenue, the Sun-Times peddles the same snake oil proffered by the retail giants and their lobbyists.

The facts show otherwise. Santa Fe, N.M., and San Francisco both enacted citywide living wage ordinances, requiring a broad range of private sector businesses to pay a wage higher than their respective state or the federal minimum wage with no loss of jobs or revenue.

After Santa Fe enacted a living wage ordinance, gross receipts in the city's retail sector increased at a rate far outpacing inflation, 200 new retail jobs were added, and the city's private sector employment growth outpaced that for the state as a whole.

Wal-Mart continues to operate a store in Santa Fe and recently applied to open a "supercenter." Other big box retailers -- including Target and Home Depot --also continue to operate stores in Santa Fe. A University of New Mexico employer focus group study reported that businesses stayed in the city and paid the living wage because it was more important to remain near their respective customer bases.

Studies of San Francisco's minimum wage ordinance similarly found no loss of jobs or businesses as a result of the ordinance. In fact, Home Depot not only sought to open a new store in San Francisco despite its minimum wage law, but actually agreed to voluntarily comply with San Francisco's higher living wage law of $10.75 per hour.

The big box retailers have saturated the rural and suburban markets. In order to remain profitable they must continue to expand, and the urban core markets, such as Chicago's are the next attractive targets. The experience of Santa Fe and San Francisco demonstrates that businesses will pay their workers decent wages and benefits in order to enter these markets, but only if required to do so by local government.

The ordinance, which I am sponsoring together with 32 of my colleagues, is narrowly tailored to those sectors of the retail industry that have a disproportionate effect on employment standards and the local economy and are best able to absorb the additional costs. And it requires wages and benefits that are no greater than those already provided by one of the city's big box retailers -- Costco.

The Sun-Times assertions to the contrary, the Big Box Living Wage ordinance is neither anti-Wal-Mart nor anti-big box retailers. Rather, it is pro-worker and pro-family.

Ald. Joe Moore (49th)