Progress Illinois

Next Thursday, America's federal minimum wage will jump 70 cents to a total of $6.85 per hour. This boost is encouraging, especially after the wage remained at $5.15 for over nine years before the Democratic Congress initiated a raise in late 2006. But it's still well below what many consider a living wage.

According to the Living Wage Calculator, a Chicago adult working full-time as the sole provider of one child would need to earn $12.51 per hour to care for the family adequately. And two new reports released this week by the Government Accountability Office show that many minimum-wage earners have difficulty even obtaining all they are owed:

The Government Accountability Office sharply criticizes the Wage and Hour Division of the Labor Department in two reports to be issued on Tuesday, saying it mishandled many overtime and minimum-wage complaints and delayed investigating hundreds of cases for a year or more.

The G.A.O. also criticizes the division for greatly reducing the number of enforcement actions it takes each year and for not focusing on the low-wage industries where, one report said, it is most likely to find violations. [...]

The G.A.O., which will release its reports at a hearing of the House Education and Labor Committee, also faulted the wage division for reducing the number of enforcement actions it pursues each year to 29,584 in the 2007 fiscal year, down 37 percent from 46,758 10 years earlier.

The House Education and Labor Committee held a hearing Tuesday on the problem of wage theft. Testifying was Kim Bobo, the executive director of Chicago's Interfaith Worker Justice, an organization that mobilizes religious communities to improve wages, benefits, and working conditions for low-wage workers. Bobo, whose book on wage theft is set to be published this fall, says two million workers are paid less than the minimum wage, three million are mis-classified as independent contractors instead of employees, and millions more are illegally denied overtime pay. You can watch her testimony here.

(H/T TPMCafe)

In an editorial yesterday on Wal-Mart's apparent decision to give up efforts to open a store on Chicago's South Side, the Tribune repeated the same old canard about the mega-retailer's purported benefits to the community and slammed the living wage movement as contributing to "food deserts" in the city's low-income neighborhoods:

This is all about preventing a non-union grocer from gaining a foothold in Chicago.
Remember the Big Box fight? In 2006 the City Council passed a law to force large retailers to pay a higher minimum wage and benefits than other businesses were required to pay. It was an effort to keep Wal-Mart out of Chicago. The mayor rightly vetoed the ordinance.
But the Daley administration has surrendered. It's not saying that, of course. But it doesn't want to confront labor again on this. So the Chatham Supercenter/grocery store is dead.
Wal-Mart has been allowed to open only one store in Chicago to date. That store, on North Avenue, has created 440 jobs and seeks to hire more people. Average wages for hourly employees are $12.

Here's a statement responding to the Tribune from Amisha Patel of the Grassroots Collaborative, one of the groups that led the 2006 living wage fight:

There is a crisis of poverty in urban communities of color. Those examining how to alleviate such poverty often cite lack of jobs as the primary factor. But equally devastating is that those jobs available to low-income communities of color are low-wage, no- benefit positions, with incredibly high turnover.

If Wal-Mart's average wage is indeed $12/hour, as asserted in the Tribune editorial, why such resistance to our ordinance's paltry requirement that they pay at least $10/hour by the year 2010? Perhaps because they include management salaries in that "average" figure? In that case, why don't they throw CEO Lee Scott's $29 million salary into the mix as well?

50 percent of Wal-Mart employees leave their jobs every year -- that's one of the highest turnover rates in the industry. In comparison, the profitable Costco chain offers its workers living wages and health insurance. As a result, it reports a turnover rate of about 17 percent. The fact that community residents on the South and West Sides -- most of them African-American and Latino -- organized to demand high quality jobs from billionaire mega-retailers is a testament to the powerful belief that communities demand and deserve good jobs. Jobs that they can raise families on.

To blame community and labor for demanding higher wages and benefits is like saying that civil rights marchers in the 60s should have just stayed home and kept quiet. We must address the very real need of communities on the South and West Sides having access to fresh fruits and vegetables. But we must also demand that those sources of food provide jobs and benefits that uplift workers out of poverty, not keep a foot to their throats.

Citing "people familiar with Wal-Mart's plans," the Tribune reports today that the retail giant has abandoned its longstanding project of opening up outlets in Chicago. The news comes after efforts by the chain to break into the Chicago market were consistently opposed by a coalition of community and labor groups demanding that these mega-retailers pay their workers a living wage.

Most recently Wal-Mart and its political supporters considered opening a store on the city's South Sitde. That idea appears to have been shelved as well, though new outlets may still pop up outside of the city, according to the Tribune:

Now the world's largest retailer is turning its attention to a backup plan of opening stores just outside city limits, banking that thousands of low-to-middle-income city dwellers will travel to collar suburbs to shop at the discount store. Among the suburbs Wal-Mart is looking at are Calumet Park, Cicero and McCook,

Wal-Mart has had little luck finding political support in the City Council now that Chicago has its eyes on hosting the 2016 Oympics. After all, the last thing Mayor Daley wants is another contentious big-box debate making national headlines.

For more on the Living Wage Coalition and its ongoing fight to ensure decent wages and benefits for big-box employees, see Amisha Patel's column from March.

In the summer of 2006, the Chicago Tribune editorial board staunchly opposed the Big Box living wage ordinance passed by the Chicago City Council and ultimately vetoed by the Daley Administration. Calling it "one of the loopiest ideas we've seen from City Hall in a long time," they addressed the city's aldermen in a July 25, 2006, editorial: "[T]hink about those workers ... and think about all the other people still waiting for their chance. They're your neighbors and your constituents. They want jobs. You can help them get to work."

Two years later, the Tribune is beating the same drum, this time after "driving by" a vacant lot on 83rd Street that would have ostensibly housed the city's second Wal-Mart location had the big box fight never occurred. Thinking wistfully about Chicago's lone branch in the Austin neighborhood, they wonder how the South Side community of Chatham could have been transformed:

This thriving Wal-Mart is on the site of what had been a virtually abandoned building. The store provides jobs for more than 440 employees—it's currently hiring more—at average wages for hourly workers of about $12 an hour. In the 18 months the store has been open (through February), it has collected nearly $7.3 million in sales taxes alone—$1.9 million for the city, $3.9 million for the state, $917,000 for the RTA and $583,000 for Cook County. And it's a convenient shopping mecca for Chicagoans.

You would think the City of Chicago would want more of all of this: More jobs. More sales and property tax revenues. More convenient shopping opportunities. You would think the city would want fewer vacant lots.

Now, I didn't major in statistics, but something here just doesn't add up. If the average hourly wage at the Austin location is over $12, why on earth would the Daley Administration put up such a stink over an ordinance that would have raised wages and benefits to $10.75 an hour?

What's more likely is that this average is highly inflated, taking into account a few well-compensated higher ups. In fact, Simon Head of the Workplace at the Century Foundation found that "the average pay of a sales clerk at Wal-Mart was $8.50 an hour, or about $14,000 a year," a job that often comes with few-to-no benefits and little overtime. Another 2007 study from the UC-Berkeley Center for Labor Research and Education reports (pdf) that 58 percent of all Wal-Mart part-time employees make less then $8 per hour nationally. The Tribune itself wrote on June 13, 2006, that the entry-level wage at Wal-Mart in Chicago starts at about $7.25 an hour.

The editorial goes on to trumpet the loss of sales tax revenue, but makes no mention of the loss in state funds stemming from Wal-Mart employees who -- because they lack decent wages and adequate benefits -- become reliant on public assistance. A 2006 University of Illinois at Chicago study pegged the cost to Illinois taxpayers at $40 million annually.

More after the jump ...

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In a column posted here yesterday, Amisha Patel recounted the 2006 effort to pass a City Council ordinance requiring Chicago's "big box" retailers to pay a living wage. The measure was ultimately vetoed by Mayor Daley, but as Patel notes, the widespread mobilization around the issue nonetheless spurred "tremendous change," including a statewide minimum wage hike and an electoral backlash against many aldermen who had opposed the ordinance.

Now we have more evidence of the living wage movement's ongoing effect on local policy.

Last Friday, City of Chicago Planning and Development Commissioner Arnold Randall rejected Wal-Mart's request for approval of a second store in the Chatham neighborhood on the South Side. Because of special zoning laws written in 2004, Wal-Mart-sized retailers require city approval before development can begin. In his statement criticizing Randall's decision, 21st Ward Alderman Howard Brookins helpfully spelled out the subtext of this decision: the city doesn't want another fight with the living wage movement. From the Sun-Times:

Brookins accused Mayor Daley of ducking the issue to avoid alienating unions that spent millions to elect a City Council more independent of the mayor.

“You would think that, given the state of the economy, we would welcome 500 new jobs to Chicago. Instead, we’re pushing ’em away because nobody wants to take the heat from certain unions that still have issues with Wal-Mart,” he said.

Following Randall's decision, Brookins and Wal-Mart must decide whether they want to take the proposal to the City Council, where they'll now face even stronger opposition.

But having reached this point, perhaps they'll realize there's another option: to simply raise their wages.