If a newly-introduced ordinance passes the Chicago City Council, companies who accept any public subsidy from the city -- including tax increment financing dollars -- would required to pay their workers a living wage.
Chicago has played a key role in the nationwide movement to ensure workers in all sectors are paid a fair salary. The Chicago City Council unanimously passed an ordinance in 1998 requiring for-profit city contractors and subcontractors to pay their workers a living wage. Eight years later, the body approved a bill authorizing big box retailers to pay employees adequately. (Mayor Daley famously vetoed the bill.) At City Hall today, aldermen and their community and labor allies took up that fight for economic justice once again, introducing legislation that would force large businesses that accept public subsidies from the cash-strapped city to take care of their workers.
Declaring that "an honest day’s work should be rewarded with an honest day’s pay," the ordinance -- sponsored by Ald. Freddrenna Lyle (6th Ward) and signed by 18 other aldermen -- would amend the city's municipal code to mandate that companies with a payroll exceeding 50 people that "receive financial assistance" from city government pay workers no less than $11.03 an hour. Every July, that wage floor would be adjusted based on federal poverty guidelines. Last month, members of the Good Jobs Chicago coalition lauded the proposed measure at a City Hall press conference we covered. Watch some highlights:
So what counts as "financial assistance" to a company? The ordinance explains:
"Financial assistance” means any financial aid from the city for a private economic development project with a total value over the life of the project of $250,000 or more, including but not limited to grants, loans and loan guarantees, bond financing, tax increment financing, tax credits, leases and sales of city property below market rate, infrastructure improvements or support and consent to real property tax reclassification initially approved or adopted by the city council on or after the effective date of this chapter. (Emphasis ours)
The Grassroots Collaborative, which helped write and promote the measure as part of the Good Jobs Chicago coalition, is currently calculating how many companies would be effected. The number could ultimately be quite large, as one-third of the city's acreage is currently covered by TIF districts. (Full disclosure: The SEIU Illinois State Council sponsors this website and several of its local unions are members of the Collaborative.)
The wage requirements would be in effect for at least 10 years. Disclosure rules for companies are also included. And if a recipient of "financial assistance" violates the statute, their contract would be subject to termination and they would lose their public subsidies. Furthermore, employees would be promised back-pay plus interest, as well as a damage check twice the size of the unpaid compensation.
The ordinance introduced today is slightly broader than a draft bill written earlier this year by Finance Committee Chairman Ed Burke (14th Ward) and South Side Wal-Mart supporter Anthony Beale (9th Ward). In the new legislation, the population of eligible workers is expanded to include building service or food service contractors operating at any property that receives financial assistance -- such as security guards, hotel concierges, janitors, and other maintenance workers.
From a political angle, the new legislation is pretty sharp. After all, why should big companies that absorb public dollars be allowed to pay poverty-level wages? Particularly when those subsides come at the expense of local schools and other taxing bodies?
Speaking of politics, this deal could ease pressure on lawmakers dogged by criticism that they are obstructing Wal-Mart's entry into the city despite skyrocketing employment rates. Ald. Burke has refused to move another ordinance that would allow the council to vote on a proposed Wal-Mart at 83rd and Stewart in the Chatham neighborhood until some wage protections are put into place. Ald. Beale has also lobbied hard for a Wal-Mart store that he hopes will anchor a massive redevelopment project between 103rd and 111th Streets in Pullman. The Chatham site is already in a TIF district and many aldermen think TIF subsidies are needed to get the latter project off the ground. So if Wal-Mart got the green-light to develop either site, they would have to comply with the new living wage standard, assuming it passes. At the same time, no one can argue that this ordinance is specifically targeting Wal-Mart.
The bill was forwarded onto the Finance Committee. Amisha Patel from the Grassroots Collaborative is confident about its prospects. "This is a good start," she says. "We feel good about our ability to get it through, given that there is so much need in our communities for living wage jobs."
Image via the Windy Citizen's TIF map.