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CHICAGO -- Mayor Richard Daley formally vetoed the controversial big-box minimum wage ordinance passed by Chicago's City Council, setting the stage for a veto override vote at the next council meeting set for this Wednesday.
The City Council approved the ordinance in July by a 35-14 vote, a margin that would be enough to override Daley's veto, which was a first in his 17 years as mayor. But local media have reported that Daley's veto signaled he has the necessary support on the council to sustain the veto, as some city council members are reportedly considering changing their position.
"I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage," Daley said in a letter addressed to the council that was filed with the City Clerk's office. "But I do not believe that this ordinance, well intentioned as it may be, would achieve that end."
To the contrary, Daley said he believes the ordinance would drive jobs and businesses from Chicago, in turn penalizing neighborhoods that need additional economic activity the most. "In light of this, I believe it is my duty to veto this ordinance."
The controversial ordinance provides that beginning next July, retail stores that are 90,000-square-feet or more in size and generate $1 billion in annual sales pay workers a minimum of $9.25 an hour in wages and $1.50 in fringe benefits—compensation that would rise to $10 and $3, respectively, by 2010. Automatic annual cost-of-living increases would apply thereafter.
The ordinance is the first of its kind in a major city, and would affect a total of 19 retailers, including Wal-Mart, Target, Sears, Home Depot and Bloomingdale's.
Wal-Mart is preparing to open its first Chicago store, while Target Corp., which already has a half-dozen stores in Chicago with more on the drawing board, has warned that its development plans were on hold pending the outcome of the ordinance.
In a statement, Michael Lewis, s.v.p. and store operations president, Midwest Division, for Wal-Mart, said the chain commended Daley "for vetoing the ordinance and ensuring more jobs, more convenience, and more choice for Chicago's working families. His action encourages desperately needed business investment and development in the city, with job opportunities and savings for those who need it most."
The Illinois Retail Merchants Association (IRMA) has vigorously condemned Chicago City Council's passage of the ordinance.
However, other groups were less enthusiastic about the veto, among them WakeUpWalMart.com, the anti-Wal-Mart advocacy group, which said in a statement: "It is an incredibly sad day when an elected official would veto Chicago's working families and taxpayers in favor of rich, powerful corporations like Wal-Mart. Rather than require wealthy companies to be responsible, Mayor Daley evidently thinks it's okay that big corporations make obscene profits while their workers get paid poverty-level wages and cannot afford health insurance….We applaud the city council and hope they will stand together in their fight for a better Chicago and a better America by overriding Mayor Daley's veto."