New ordinance forces big-box retailers to raise employee wages

By Tom Bukowski

Chicago became the largest city in the nation to require various major retailers to increase employee wages when the City Council approved the ordinance July 26.

The new ordinance may drive Wal-Mart, the nation’s largest private employer, to refocus its efforts on the suburbs of Chicago instead of the city itself.

The ordinance requires so-called ‘big-box’ retailers that have more than $1 billion of annual sales to increase their minimum pay to at least $10 an hour by July 1, 2010 if the retailers’ stores are at least 90,000 square feet, the Associated Press reported in a July 26 article.

Wal-Mart hopes to have at least 40 Wal-Mart Supercenters in and around the Chicago area within the next few years, positioning some stores closer to Chicago to attract city residents into the suburbs. Wal-Mart prices are about 15 to 30 percent lower than those of the Chicago area’s current major retailers, Jewel and Dominick’s, the Chicago Tribune reported in a July 26 article.

Wal-Mart Supercenters sell groceries as well as other items and usually are as large as 150,000 to 200,000 square feet. Wal-Mart hopes to open at least 280 Supercenters within the next year throughout the nation.

The new ordinance may be some cities’ way to force major retailers and employers to pay their employees decent wages, but in Chicago, the ordinance may drive employment opportunities away from the city and to the suburbs, opponents such as Chicago mayor Richard Daley argue.