New law reaches beyond Wal-Mart, wage issues

by Sandra JonesTribune staff reporterPublished July 28, 2006 http://www.chicagotribune.com/business/chi-0607280139jul28,1,4453858.story?coll=chi-business-hed&ctrack=1&cset=true
The new local ordinance mandating big-box retailers pay higher wages and benefits to workers sent a chill through the Chicago retail industry, from high-end department stores to hardware outlets.Aside from Wal-Mart Stores Inc., the primary target of the hotly contested ordinance, the law would cover at least 18 retailers operating more than 40 stores in the city.Nordstrom, Marshall Field's, Saks Fifth Avenue, Carson Pirie Scott & Co., Toys "R" Us, Home Depot, Lowe's, Menards and Kohl's are just a few of the stores affected, according to a list compiled by the City of Chicago's Department of Planning & Development."It's certainly stunning," said Susan Wachter, a professor at University of Pennsylvania's Wharton School in Philadelphia and an urban development official during the Clinton administration. "This clearly isn't only going to affect Wal-Mart. It's going to affect Wal-Mart's competition."Retailers complain they don't want city government dictating what their workers are paid.Many of the big Chicago retailers fall below the ordinance's requirement to pay a minimum of $9.25 an hour starting next July and $10 by 2010. Calls to selected stores affected revealed hourly pay rates ranging from $6.50, the minimum wage in Illinois, for entry-level sales positions, to $9for overnight stock work.The ordinance would not have any impact on wages at Nordstrom Inc., which already offers wages from $10 to $18 an hour.But the crux of the ordinance deals with an even thornier issue: health insurance.Traditionally, part-time retail workers don't earn benefits, a practice that has helped retailers manage already-slim profit margins but also has contributed to the country's swelling population of uninsured workers. The big-box ordinance mandates retailers pay benefits on par with some of the industry's most generous retailers.Under the ordinance, retail workers are required to receive benefits if they work 10 hours or more a week and are employed at least 180 days, or if they work 30 hours a week and are employed for at least 90 days. The benefits must be worth $1.50 an hour initially and then rise to $3 by 2010.