ILAPA News BURST! Chicago Big Box Living Wage Ordinance

Chicago Big Box Living Wage Ordinance by Sarah K. Wiebenson

	Recent legislative wrangling within the Chicago City Council over how to regulate large-scale retail or “big-box” worker wages reflects a broader shift across the U.S. toward expanded regulation of this type of commercial development. Legal challenges to these regulations and a growing frustration with existing big-box regulation “best practices” shed some light on why this has become such a controversial issue. Whether the state or local legislative arena is the proper forum to regulate these stores also remains unresolved. If it withstands a likely mayoral veto, the Chicago Big Box Living Wage Ordinance will require retail stores over 90,000 square feet operated by corporations with more than $1 billion in sales to pay employees more than $9.25 per hour and $1.50 in benefits; increasing to $10 per hour and $3 in benefits by July 2010. An estimated 8,000 employees working in 38 stores throughout the city would be affected. In response to the Chicago legislation, retailers Wal-Mart, Target, Lowe’s and Home Depot have threatened to “rethink” or “put on hold” additional Chicago developments; while proponents of the ordinance argue that the suburban markets are saturated and any threats to abandon inner-city expansion plans are just that. The Chicago ordinance joins a number of legislative initiatives across the country seeking to expand big-box regulation beyond these stores’ aesthetic impacts. It may have been sufficient ten years ago to require new stores to be visually compatible with the community – a one-dimensional approach that prompted Wal-Mart to create a pattern book of “Alpine,” “Coastal,” “Mediterranean,” and “Mission-style” store designs to cater to local tastes – but increased concern for the socioeconomic impacts of large-scale retail supports a second generation of more nuanced regulations. A key issue is whether more complex big-box retail impacts can legally be mitigated at the state or local level. For example, the Maryland State Legislature recently voted to require corporations employing more than 10,000 workers in that state to dedicate at least eight percent of their labor expenditures to health care coverage. This move is supported by research from the UC Berkeley Labor Center and elsewhere, which found that state taxpayers are shouldering the health care costs of low-wage employers. Nonetheless, legal challenge to the Maryland legislation declared it invalid under the 1974 Employment Retirement Income Security Act, or ERISA, which is intended to protect firms from having to comply with a patchwork of health care and employee benefits under various state laws. In August, the Illinois lieutenant governor announced that he will propose a similar state-level approach to big-box wage regulation after the elections in November. A statewide initiative may be necessary if attorneys for the City of Chicago were correct in advising the City Council before passage of the Chicago ordinance that it is at “significant risk” of being overturned in court. Supporters of the ordinance point to similar wage regulations that withstood legal challenge in Santa Fe, New Mexico, where Wal-Mart has since announced plans to build a supercenter. Keeping an eye toward potential grounds for legal challenge and establishing a logical link between the trigger for regulation and the impact needing mitigation will be critical elements of more effective second generation large-scale retail regulations. As Mayor Daley pointed out before the vote on the Chicago ordinance, “Why should we raise the wage of some people and not others, making it dependent on the size of the store they work in?” Retail wholesaler CostCo, for example, is the same size as many of the stores targeted by the Chicago ordinance, yet they have been lauded by BusinessWeek magazine for their decent wages and health care and retirement benefits. On the other hand, if CostCo has already taken the labor high road, they have nothing to worry about if the courts declare the Chicago wage ordinance here to stay. Sarah K. Wiebenson recently graduated from the UIC Planning and Policy master’s degree program with recognition from the AICP as an Outstanding Student. She is the Policy Chair of the Chicago-based organization Women in Planning and Development. Sarah’s master’s degree thesis, “Big Boxes, Rational Responses: Increasing the Legal Defensibility of Large-Scale Retail Development Controls,” has been submitted to the APA Planning and Law Competition for publication in the Urban Lawyer.
	Sarah K. Wiebenson City of Highland Park Planning Division 1150 Half Day Road Highland Park, Illinois 60035 Phone: (847) 432-0867 Fax: (847) 432-0964 sarah_klipfel@yahoo.com