Posted by
Rich from NW Indiana on Wednesday, July 26, 2006 5:26:55 PM
Today the city council of Chicago is debating the "Living Wage" proposal. It is largely directed at the huge retail giant Wal-Mart (and to a lesser extent Target). Since Big Box stores are on liberal hit list lately, Wal-Mart is the victim of the bad press that comes with it. It's largely due to the low wages of the retail industry as a whole, but Wal-Mart is seen as the one keeping the pay low. By the way, Wal-Mart pay is a little higher then the retail industry as a whole, but that doesn't seem to matter much to folks. Yes, the pay stinks in retail but most know that when they go to work for a retailer.
Wal-Mart doesn't have any stores in the city of Chicago, one is under contruction but I don't think it has opened yet. The second location was shot down even though the host neighborhood seemed to want it. Target stores has several locations in the city. Target has warned the city council that if this passes, most expansion will stop and the company will even consider closing some or all of it's city locations.
Surprising some council members are against this proposal. Oh, I didn't say what the proposal is yet did I. It proposes a higher minimum wage (and some benefits) for employees of large sized stores. Only employees of big stores. Since unions have had no success in unionizing Wal-Mart anywhere, they of course a big supporter of this. As I said before some members of the city council are against this proposal, largely the ones that want a Wal-Mart in their ward. And the few that understand how a business works.
I am amazed by how many people don't understand how a business works. A business exists to make a profit for its owners, thats it in a nutshell. It does a public service (most of the time anyway) by filling a need or want. In exchange you pay the business to fill that need (or want). If a business is not profitable it will not be in business for long (ok, if it breaking even it may be around for a while, but it will not grow). It does not exist to employ people, pure and simple. Generally the fewer people, the better for most businesses. No one makes you work for a company that pays crummy wages. You may be stuck with it for a while (I sure have) but a better job will come someday.
Wal-Mart is known for hiring and employing people, that most fortune 500 companies would never look at, let alone hire. Wal-Mart will hire inner city residents and employ them. They hire older folks on a regular basis. Like McDonalds, Wal-Mart is often someones first job (and sometimes the last). Most companies don't want to bother with training and moving people up the ladder but Wal-Mart is one of them. Yes Wal-Mart does stuff it shouldn't do, but for the most part it does more good than bad.
But I didn't want to write about how wonderful this huge company is, it can defend itself. It's suppost to be about the little people.
A higher minimum wage sounds great at first glance. But it doesn't account for what it starts. An owner of a couple of McDonalds in Illinois that I read about told about the rise of minimum wage and what it does to his business. Illinois raised the mimimum wage a few years ago. It increased his costs about $250,000 for the higher wages. So he wasn't going to get $250,000 in new business, something had to give. So he had to shorten hours and stop hiring. So folks didn't earn more, and some are still looking for a job (making nothing by the way). No one seems to know about this part of higher minimum wage laws. Higher unemployment.
So Chicago may get what it "wants", no Wal-Mart stores and fewer Targets.
I live in Northwest Indiana and I see a lot of Illinois plates and Chicago city stickers in the parking lots of the retail stores here. So city residents want these stores (and even want the jobs that come with). To the city council members of Chicago, I thank you for the tax dollars and the business from your residents. Maybe when their out here I can sell them a house here. Business and their customers will alway go to the area with lower costs, no matter how much they want to "improve" the lifes of others. I guess it is, since most of us in the real world live on a budget and stick with it because they have to.