The City Council on Wednesday turned its attention once again to one of the most contentious issues it has faced in recent years -- Walmart's entry into Chicago's retail market.
Four years ago, a closely divided City Council voted to oppose a zoning change to allow a Walmart store in Chicago's south side 21st Ward, while voting for a zoning change to allow Walmart to open a store on Chicago's west side. I led the charge then against Walmart entry into Chicago because of the retailer's horrible track record on labor relations and the harmful effect Walmart's presence could have on existing small businesses.
The battle against Walmart inspired labor and community activists to propose the "Big Box Living Wage Ordinance," which required stores of 75,000 square feet or larger to pay their workers a "living wage" of $10 an hour and provide at least $3 an hour in benefits. I was the lead sponsor of the ordinance, which passed the City Council by an overwhelming vote, and forced Mayor Daley for the first time to exercise his veto pen. We fell two votes short of overriding the Mayor's veto, after the Mayor was able to convince two members of the Council to switch their votes.
A proposed zoning change for another new Walmart -- in Chicago's Pullman neighborhood -- was up for a vote on Wednesday, and this time the vote was unanimous to allow the zoning change, and hence Walmart into Chicago.
Why the unanimous vote? After years of us demanding more from the world's most profitable retailer, Walmart representatives finally sat down with representatives of organized labor and agreed to increased wages for its new workers and other concessions that will result in good paying construction jobs and other community benefits.
As a result, Walmart agreed to pay a higher starting wage for its workers -- $8.75, which is fifty cents above the current minimum wage in Illinois. Walmart also agreed to pay its workers at least $9.15 and as much as $9.35 an hour after the first year on the job. This will make Chicago's starting Walmart workers the highest paid starting Walmart workers in the nation.
Walmart also agreed to allocate $20 million in for job training and economic development programs in Chicago, and entered into a Project Labor Agreement, in which it agreed to use union labor for all its store construction projects in northern Illinois and increase employment opportunities for minority construction workers and provide minority apprenticeship opportunities.
In the face of some of those who argued that we should simply give Walmart a blank check and be grateful they were willing to enter the Chicago market, Chicago's community organizations and labor groups demanded more from the world's largest retailer, and I was proud to be one of the many City Council members who backed them up and refused to vote for the zoning change until they agreed to meaningful concessions.
I voted for the zoning change to allow for the Walmart because I wanted to honor the hard work of the labor and community organizations that fashioned the agreements and because I recognize Walmart is the only retailer that has promised to bring fresh produce and other products to the Pullman community's "food desert." I cast my vote with great trepidation, however.
Walmart recently announced plans to open dozens of new stores in Chicago's neighborhoods, including stores that could be as small as 25,000 square feet in size. This means that neighborhoods, such as Rogers Park and Edgewater in my 49th Ward, could potentially be home to a new Walmart store. Given Walmart's track record of engaging in "predatory pricing," and other measures to drive out the competition, I am gravely concerned about the long-term impact on our small and locally owned businesses of dozens of new Walmarts in Chicago.
A Loyola University and University of Illinois study of the impact of Chicago's west side Walmart concluded that stores near Walmart were more likely to go out of business, eliminating the equivalent of 300 full-time jobs -- about as many as the new Walmart created. The study supported the contention that urban Walmart stores absorb sales from other city stores without significantly expanding the market.
In short, Walmart is not a panacea to our unemployment problem, and in fact may make the economic development climate worse in Chicago neighborhoods, especially those neighborhoods that already have locally owned stores that pay employees more than Walmart wages.
Rest assured I will look at any future Walmart proposals with more than a healthy share of skepticism.
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