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Chicago Takes Aim at "Big-Box" Stores

Chicago’s city council "voted yesterday ":http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7B39D18402-FB7F-4057-8EA9-50B6E3AD7E13%7D&keyword= to require so-called ‘big-box’ retailers to pay workers at least $10 an hour in wages and $3 an hour in benefits, well above the minimums required by Illinois state law. The decision, which was opposed by Mayor Richard Daley but passed by a 35-13 margin, affects stores with ‘90,000 square feet or more operated by companies with annual sales exceeding $1 billion.’ Many stores fall in this category but the two main retailers affected are Wal-Mart and Target, which has threatened to cancel plans for new stores and close existing ones.
With a federal judge recently "overturning ":http://money.cnn.com/2006/07/19/news/companies/walmart_ruling/index.htm a similar law passed by the Maryland state legislature that only affected Wal-Mart, will this vote stand? Will the big-boxes simply leave Chicago, or pass the cost on to consumers? Who is responsible for making sure employees receive health-care coverage and a ‘living wage’- employers, the government, or the employees themselves?

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way to go by Anonymous

Chicago just guaranteed that no one will be able to buy low cost items from Wal-Mart and can bid a fond farewell to all the jobs people had working at those places. When are people going to realize that you can’t just go around guaranteeing wages especially if these mega-stores don’t need your business. Wal-Mart and Target will just let Chicago drop. No big deal for them, but a huge deal for the people of Chicago.

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Money from where? by Jackson

One thing I don’t think people realize is that raising the minimum you have to pay someone doesn’t really benefit anyone and hurts a lot of people.

IF you raise the minimum wage then that money has to come from somewhere. Now I know we all believe corporations to be big loving "for the people" type institutions, but do people honestly think that the corporations will just make less money? That is definitely not in the charter of any corporation I am aware of.

So I have to ask, where is this money going to come from? Me, you and the people getting the minimum wage increase. It is rather circular.

Here discusses why raising the minimum wage does not affect the full time employee very much at all and how in the end it will end up costing more to everyone, business and consumer alike.

Here wikipedia discusses the arguments for both sides in the minimum wage debate. Of note is the line :
>"a minimum wage increases unemployment among young and unskilled workers"
This being the group that is likely the target of the sought after higher wage, I find it ridiculous that people argue for it. Another interesting point is the seeming inequity of positive effects and negative effects for the two sides of the argument.
Whereas supporters of raising the minimum wage claim it reduces low-paid work (duh! nobody is arguing that you ARE paying more) it does not account for where the money would come from.

The second claim, that is stimulates growth by increasing purchasing power, is a short term gain only… once prices catch up with costs the new purchasing power is eliminated, while costs remain high to account for the higher wage (that is a purely psychological raise in the end).

The 3rd claim is that it discourages labor-intensive industries thereby encouraging more investment in capital and training. I would really like to see the studies that back up this statement. Discouraging labor-intensive industries either means they won’t get done at all or more likely, the work will be outsourced to another country that is easier to deal with. Don’t see this as a positive effect either.

I will refrain from discussing the claims of the opponents more than posting them here :
>Destroys jobs, creating unemployment or underemployment wherever and to the degree that the value of the job to the employer is less than the legal minimum wage.
>Reduces the quality of jobs near the margin as well as the quantity – with less room to negotiate on salary, employers will necessarily cut other key areas such as job training.
>Curbs economic growth by decreasing the supply of affordable labor.
>Decreases the opportunity for low-skilled workers to gain skills.
>The cost of government is increased due to assistance programs aiding the laid-off workers.
>Creates outsourcing to locations where labor is more affordable; thus cutting the domestic job market.

Money isn’t magic, and if your parents haven’t already told you, it doesn’t grow on trees. In general, people who think that you can suddenly pull more money out of a system without putting an equal amount into it and have no adverse affects are the ones that have no money and can’t figure out where theirs keeps going.

Finally, I wanted to post this and highlight the quote:

Of course, no one is arguing that the minimum wage could be raised indefinitely without adverse consequences. But there is clearly a range in which modest minimum wage increases lift wages for the least well off workers without jeopardizing their employment prospects.

So as long it is not raised indefinitely, the wage can be raised all the time. Right. "No single raindrop blames itself for the flood."

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