Chicago, IL, September 11, 2006--Chicago Mayor Richard Daley on Monday vetoed a "living wage" ordinance that would require large retailers such as Wal-Mart and Target to pay escalating hourly pay and benefits.
Chicago's city council approved the ordinance in July by a 35-14 vote. That would be enough votes to override Daley's veto, but local media have reported that some city council members were considering changing sides.
"I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage," Daley wrote in a letter to the city council, filed with the city clerk's office on Monday.
"But I do not believe that this ordinance, well-intentioned as it may be, would achieve that end," he added. "Rather, I believe it would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most."
The ordinance required retailers with more than $1 billion in sales to pay a starting salary of at least $9.25 an hour and benefits of $1.50, escalating to $10 in wages and $3 in benefits by 2010, with cost-of-living increases beyond that.
The federal minimum wage has stood at $5.15 an hour since 1997. Wal-Mart's entry-level salary is $7.25, and it pays an average of $10.41 in Illinois, according to its Web site.
The veto comes as Wal-Mart prepares to open its first store in Chicago, the third-largest U.S. city. Wal-Mart has faced increasing opposition as it tries to expand into major urban areas. Critics accuse the world's biggest retailer of providing meager wages and benefits, and driving competitors out of business.
In a statement, Wal-Mart said Daley's veto "encourages desperately needed business investment and development in the city, with job opportunities and savings for those who need it most."
Target has a half-dozen stores in Chicago and is building more, but has warned that its development plans were on hold pending the outcome of this ordinance.
The company was not immediately available to comment.
The Illinois Retail Merchants Association has said that 42 Chicago stores with 7,500 workers would fall under the ordinance.
Other cities, including San Francisco, have passed living wage ordinances, but Chicago's was unusual in that it singled out large retailers.
