By David Weese
Staff writer
Mayor Daley is finding himself between a rock and a hard place over the hot-button issue of bringing new Walmarts to the city of Chicago.
On one hand, the big-box stores are needed. Many of the areas where it has been proposed that they be built are considered food-deserts, in that there are no grocery stores in the area, leaving residents having to drive long distances to buy food.
On the other hand, they are strongly opposed by the labor unions. Chicago Federation of Labor (CFL) President Dennis Gannon has been trying to tie the approval of the new Walmarts to a living wage ordinance that would require the retail giant to pay its workers $11.03 per hour, which is not acceptable to Walmart.
Walmart says it will agree to the measure if it’s also required of all other retail stores in Chicago. They claim they already pay their employees an average of $11 per hour, but the CFL disputes this, stating Walmart has an abysmal track record of treating its employees.
Walmart fairly recently settled a huge class-action suit in Massachusetts in which employees claimed that they denied workers rest and meal breaks, refused to pay overtime, and manipulated time cards to lower employees’ pay. They are facing another class-action suit in California alleging sexual discrimination. Walmart has also often been accused of keeping the preponderance of their employees at just under full-time hours so they can avoid having to pay benefits for those employees.
In 2006, the City Council passed an ordinance that would have required Walmart and other big-box retailers to offer their employees at least $13 per hour in both wages and benefits, but Daley vetoed the measure. City Council tried to override that veto, but fell three votes short. That move upset local labor leaders, who then spent millions in the next election to elect a more labor-friendly City Council. The threat of labor working against him in the next election also hangs over Daley’s head.
Then there is the veiled threat of a lawsuit from the developers of the proposed Chatham neighborhood Walmart site, who say they are about to default on payments on the site if an agreement can’t be reached. The Archon Group has hinted it will file a $30 million lawsuit against the city if it loses the property.
That, in turn, means that City Council Finance Committee Chairman Edward M. Burke (14th) is also feeling the heat. Burke admits that he has held the measure up in his committee at the request of labor, so the “living wage” ordinance was devised as a way to put an end to the matter without raising the ire of organized labor. That ordinance would have applied to any larger retailer that had 50 or more employees, which would have satisfied the labor organizations.
Burke was prepared to bring the measure to the floor of the city council on Jan. 11, but back-room negotiations shortly beforehand resulted in Burke tabling the measure. An agreement between the parties simply couldn’t be reached, so Burke postponed the vote.
“We’ll let them digest this and chew on it a little bit and see if we can come to some kind of agreement,” Burke said after the meeting.
Walmart spokesman B. John Bisio said, “We share the same concerns of many businesses across Chicago— that this policy is the wrong direction for a city that desperately needs jobs and economic growth. This ordinance does not address the needs of the people of Chicago who want jobs and access to fresh and affordable food. It is being considered at the expense of Chicago’s working families, not on their behalf.”
“This is a job-killer. I’m stunned that anyone would even consider something like this when we have over a 10 percent unemployment rate,” said David Vite, president of Illinois Retail Merchants Association. “Nobody is going to leave, but they certainly would not invest in Chicago. We shouldn’t be putting roadblocks to employment up in Chicago.”
A spokesman for the Chicagoland Chamber of Commerce said the “living wage” ordinance was “ten times worse” than the “big-box” ordinance that Mayor Daley vetoed in 2006, saying this ordinance had a much broader scope that the 2006 ordinance.

New jobs
Many alderman claim that those involved are ignoring the fact that bringing the proposed Walmarts into the 9th, 12th, 20th and 34th wards would bring desperately needed jobs, but a study recently released by Loyola University and the University of Chicago disputes this. That study found that when the Walmart opened in the Austin neighborhood in 2006, some 82 businesses within a four-mile radius of the store closed as a result.
The study said that while 300 jobs were added at Walmart, the same number of jobs were lost out in the community. The result of the new Walmart was that many smaller Mom-and-Pop type businesses in the neighborhood closed because they couldn’t compete with Walmart’s high-volume discount pricing, which adversely affected the makeup and flavor of the surrounding community.
David Merriman, Department of Economics, University of Illinois at Chicago, told WLS TV, “The message is Walmart is not a panacea. What Walmart will do is going to change the kind of businesses you have in your area. It will create some jobs but force others out of business or prevent them from opening.”
But some, such as Ald. Emma Mitts, disagree. “WalMart draws business, they don’t run ‘em away. Not one business, not one has come to me and said ‘we’re closing because of Walmart.’”
“Walmart at 83rd and Stewart would jump-start, and be the Olympics for the south side,” said Ald. Harold Brookins. “It would create hundreds of jobs in the community. It will put people to work and make people feel good about themselves and their community. It will bring fresh produce; it will bring goods and services to our community that are desperately needed.”
Daley has said that he doesn’t plan to simply grant administrative approval for the Walmarts against the wishes of City Council, but may try to get the process moving again by asking the Council to vote on another Walmart planned for 103rd and Doty. That project may have more support in City Council, as it is a large project that is in an area where there is almost no other similar retailers.