Chicagoist: Whoa, Wait – You Meant That?

Jared K.

Fri, 04 Aug 2006 15:21:34 -0600

What would happen to Target and WalMart's bully tactics if the Chicago City Council dropped this ordinance but it were picked up by Cook County government? If this were a county thing, these stores couldn't even think about opening across the street from their desired market or busing customers from their neighborhood to a more distant store because the geographical range involved would broaden to the point that these strategies would be useless. If Target really wants to attract customers from the south side of Chicago for example, they can't really expect many people to be enticed into travelling to Will county to save less than the gas they will spend getting there. If folks were willing to do that after all, they would visit the stores already located in the collar counties. Really, I think this targetted minimum wage is a poorly thought out idea overall (Poorly thought out ideas from Chicago alderman?), but I would like to see more traction on a more comprehensive living wage package, at the national level if possible, but the county or state would be a start.

NSH

Fri, 04 Aug 2006 09:38:52 -0600

National Commander of the Salvation Army W. Todd Bassett put it this way: At a time when it was needed most, Wal-Mart has extended its hand to support the 104-year-old tradition that benefits many thousands of people in communities throughout the United States. Every dollar put into our Red Kettles is used locally, and Wal-Mart's generosity by matching those dollars will extend our local services to many more needy individuals requiring our assistance far beyond the holiday season. The Salvation Army has kettles at better than 3,600 local Wal-Mart associated retailers. Have you ever seen a union picket wal-mart? Does wal-mart ask them to leave?

Mikey

Thu, 03 Aug 2006 23:10:10 -0600

...but unless you're a shareholder, you're opinion is worth absolutely nothing. I would disagree with that statement as well. You can vote just as effectively with your dollars. As someone else pointed out, Wal-Mart is not going "green" merely out of the goodness of their hearts--double and triple digit growth in the organic and eco-friendly products markets over the last several years has probably played a small role in the decision-making as well...

Larry Griffin

Thu, 03 Aug 2006 22:22:57 -0600

Re: moving the poor workers to Niles. Oddly enough, that's sort of the city's policy on how to handle the homeless issue (Mark Brown column). Re: Frank the Tank. First off, the use of "limousine liberal" is a little over the top as is the $5 gallon of milk example, but others addressed those points and I understand what you're getting at. It is important and desirable to have economic development and, frankly, good supermarkets and stores in Chicago's poorer neighborhoods. However, under your argument, the near suburban stores will do just as well because they are so accessible, which means the residents of said neighborhoods can hop on PACE and go shopping at Wal-Mart (or walk across the street in the Calumet Park example). The ordinance is about setting appropriate standards for doing business in Chicago, across the board. As far as the so-called "equal protection" argument goes, I admittedly believe that the ordinance was crafted so as not to include Jewel or other supermarkets. (However, those are largely union shops that already pay above the big box minimums proposed.) That said, the Illinois state and federal minimum wage laws include many exemptions and variances for certain businesses. There is a rational relationship here; very large retailers with very large operations who are likely to have very many Chicago employees and turn a very large Chicago store profit can better afford these wage and benefit levels. Small to mid-size businesses may not be as able to bear that brunt. If you're against this minimum wage because it only applies to these stores, are you also against variances that establish higher wages for contractors doing work with the city or lower wages for farm and food service workers?

Patrick McDonough

Thu, 03 Aug 2006 17:57:34 -0600

Please enjoy this little thought.Since many minority alderman are upset about not having a Walmart located in their wards, I came up with a tax break idea to help the needy. Lets help the poor workers move to suburbs like Niles so they can work at these great stores. You know deep down Mayor Daley likes this idea. And Niles is kinda "White" if you know what I mean. Lets help with six month of rent.

Comrade

Thu, 03 Aug 2006 17:50:57 -0600

"but unless you're a shareholder, you're opinion is worth absolutely nothing." The opinion of everyone who is a potential customer is worth something. Or does everyone think that Wal-Mart is adopting the nicer, greener image solely because it's shareholders want that? Get real. "can't afford to pay $5.00 for a carton of milk at Whole Foods" Isn't it common knowledge that milk (regular old milk, not organic) is usually cheapest at gas station convenience stores? And where is there a Whole Foods w/o other grocery options nearby? Did they open a store on the Westside w/o me hearing about it?

Comrade

Thu, 03 Aug 2006 17:43:45 -0600

"Target does not allow the Salvation Army to collect in front of its stores" Neither does Wal-Mart--it's a result of court ruling(s) that effectively say if you let one group distribute literature/collect money/whatever on your property, you have to let everyone--including unions, policital parties, pro-/anti-abortion/war. Ban one, ban them all. Kinda screws the salvation army and girl scouts, but that's the law.

Frank the Tank

Thu, 03 Aug 2006 17:35:47 -0600

"I don't have a Whole Foods or a Wal-Mart anywhere near my neighborhood but there are plenty of little markets where you can get affordable milk but I wouldn't expect somebody who uses bumper sticker slogans like "Limousine Liberal" to be hip to that." My main point, and my use of a bumper sticker slogan probably detracted from the thrust of my argument (so I sincerely apologize), is that it's extremely easy for people who don't care about lower prices at Wal-Mart or Target to say they ought to impose barriers on those stores. It's also extremely easy for people that live in areas that naturally attract economic development to say that they don't want Wal-Mart or Target in their neighborhoods (or impose restrictions that are so high that they would never want to locate there). When it comes to the economically depressed areas of the South and West Sides of the city, which happen to contain the neighborhoods that need jobs, economic development, and lower cost goods the most, this ordinance pretty much eliminates any incentives to locate in those areas since those areas also happen to be easily accessible to the border suburbs. The upshot: it's not a bluff.

curmudgeon

Thu, 03 Aug 2006 17:19:11 -0600

benjy: I'm with you 100%. Look for aldermen who already have a Target in their ward to go along with the mare. What have they got to lose?

navin

Thu, 03 Aug 2006 17:08:12 -0600

but unless you're a shareholder, you're opinion is worth absolutely nothing. Dude, as a taxpayer who's money they'll be throwing at target I'd say my opinion is worth something, even if it doesn't seem like it is. I won't even get into the taxes and health care issue. Wal-Mart, but the vast majority of people don't want to have to pay or can't afford to pay $5.00 for a carton of milk at Whole Foods I don't have a Whole Foods or a Wal-Mart anywhere near my neighborhood but there are plenty of little markets where you can get affordable milk but I wouldn't expect somebody who uses bumper sticker slogans like "Limousine Liberal" to be hip to that.

Frank the Tank

Thu, 03 Aug 2006 16:43:12 -0600

Will the big box stores pull out of Lincoln Park or Lakeview if the ordinance is ultimately put into effect? Probably not because those areas have "desirable" demographics that make increased costs of doing business worth it. However, Wal-Mart and Target have absolutely no reason to put stores on deep South and West Sides of the city when (1) those populations are less affluent and (2) they are relatively accessible to bordering suburban communities that provide a lower cost structure. It's very easy for those living in affluent areas to say they don't want certain stores because the needs of those people are going to be filled no matter what. It's great to be able to afford to not have to shop at Wal-Mart, but the vast majority of people don't want to have to pay or can't afford to pay $5.00 for a carton of milk at Whole Foods (or for that matter, at a convenience store). This is limousine liberalism at its finest.

jd

Thu, 03 Aug 2006 16:27:36 -0600

NSH: i'm no expert on target, but i can use a search engine. according to the american red cross' own web site, target donated 1 million dollars, along with a whole bunch more in supplies. wal-mart got the same write-up, and yeah, their pr machine made sure that they got all the attention. didn't you think it was crass how much they publicized their charity in katrina's wake? they even made commercials out of it. LARRY: if less than $10 an hour and $3 an hour in benefits is doing such serious harm to our community, than why is that this harm is being addressed by looking only at the 0.001% of employment in the city? it's the city council that is duplicitious and manipulative, not target. just like the council's trans fat ordinance which is aimed at big revenue chains, it should be obvious to everyone that this council cares about curing "harms" exactly as far as the sign on the road that says "warning: votes at risk"

Larry Griffin

Thu, 03 Aug 2006 15:48:45 -0600

JD-- Ever heard of a robber baron? While I respect any business's right to turn a profit and make choices that maximize profits, it is the government's role and our society's responsibility to regulate businesses in such a that they do not harm our community. Part of that would include harming their own employees. I think my issue, and others might be with me on this, is that Target et al are going to do business in Chicago; they are just trying to extort the maximum possible profit margin by undermining the Living Wage Ordinance. The duplicity and manipulation is what gets to me, not their choice of where to do business. And indeed, there are not many better new markets for Target and Wal-Mart than Chicago.

NSH

Thu, 03 Aug 2006 15:40:40 -0600

jd, where was Target when Katrina hit, Wal-Mart was there, in the thick of it, doing more for the people of the gulf than our own government coudl/would. They alone donated 18m and 3m in merchandise. Also Target does not allow the Salvation Army to collect in front of its stores.

jd

Thu, 03 Aug 2006 15:23:25 -0600

target donates 5% of its profits to charity every year. no other fortune 500 company gets close to even touching that kind of generosity. unlike PR done by other companies, target actually put their money where their mouth is. they don't do it because the chicago city council forces them to. if the council did force them to, using some pull-a-number-out-of-the-hat methodology, they'd raise all hell. and deservedly so. let's not get carried away. this is all about business. we shouldn't pass judgment on target if they cancel plans or even close stores. when business conditions change, they have to change too. i hate to be the one to break it to the crowd, but unless you're a shareholder, you're opinion is worth absolutely nothing. don't like it? then go buy shares and vote your voice in the annual meetings. marshall fields wasn't sold without a vote by shareholders. the outrage on that is as silly as the nonvoter who complains about who got elected. people made up pins and t-shirts and got all upset. too bad they didn't buy a few shares and let their voice actually count for something. for a minute, put yourself in target's shoes. if you were target, you have lots of options looking at all the cities in america. wouldn't you be relatively put off by the chicago city council? you spend years planning and organizing. hundreds of thousands of dollars to investigate and plan in one (big) market. then out of the blue, some law comes along with completely arbitrary thresholds. who knows what else they have up the council has up their sleeve. there's plenty of other markets out there that are less trouble. plenty other areas to give back 5% of profits and jobs and sales tax revenue, etc, etc. chicago messed up.

J/City

Thu, 03 Aug 2006 15:21:53 -0600

Is anyone really suprised by this?

Larry Griffin

Thu, 03 Aug 2006 15:18:25 -0600

Great discussion--even the opponents of the ordinance raise some interesting points. In the end, it is really nice to see the aldermen doing something that actually matters to the community instead of regulating how our french fries are cooked. Here is my full take on this issue: Clicky Feel free to read it, flame me, tell me what you think.

Thad

Thu, 03 Aug 2006 15:06:07 -0600

I understand the cost/benefit analysis, and the thin nature of retail margins, both of which don't get enough respect from supporters of the big-box wage law. And I would think Target PR has gamed all the ways to react to this story. Still, I am curious why Target isn't making a different PR play on this: Accept the wage law, build in the city, and become even more of the anti WalMart. Really, how many people shop at Target because they think it is a different kind of company than WalMart? (Not really true, but perception is reality, right?) Hell, even oil companies are, through PR and ad campaigns, playing up the "global warming is real" angle to polish their images. Is it just a matter of warning off other cities from doing wage controls? The way I understand today's message from Target is a message to the mayor and a few aldermen on the fence to veto this wage control.

What's my name!

Thu, 03 Aug 2006 15:00:44 -0600

Can't they just reach a compromise where either the stores getting the special tax breaks have to pay their workers the $10/$3 deal, or they can pay their workers the fed minimum and receive nothing in subsidies from the government. Target is crying foul over equal protection, but don't mind receiving special tax breaks from Chicago that your average business would not have a chance of getting.

Big Box poo poo

Thu, 03 Aug 2006 14:38:22 -0600

That's great that Wal-Mart is "going green," but let's not be naive; it's just a distraction from all the heinous shiznit that Wal-Mart does.

Mikey

Thu, 03 Aug 2006 14:32:35 -0600

I've always been one of Wal-Mart's biggest detractors, and shop at Target whenever the opportunity arises. But as of late, Wal-Mart has been making some seemingly sincere efforts to polish up their image. Their CEO, Lee Scott, is determined to "green up" Wal-Mart (the new Southside location has/will have a green roof), and push organic and green products into the mainstream at affordable prices, as well as reduce their carbon footprint. This gives me great hope. Target, on the other hand, is losing points with me almost daily. If Wal-Mart stepped into these markets where Target is backing out, despite the BBO, that would really say a lot about the direction in which they're heading...

spence

Thu, 03 Aug 2006 14:19:40 -0600

Amy, I hate to burst your bubble, but Target's business practices are almost identical to Wal-Mart's. The reason you hate Wal-Mart is due in large part to it being the largest corporation in the world and thus being held under a very large microscope. Target pulls the same crap, but has cooler clothes.

Amy

Thu, 03 Aug 2006 14:04:06 -0600

This is the pushback. Target has not made a public comment yet - and frankly I'm sick of their bullying tactics. They might just be turning into their biggest rival (cough-walmart-cough). This is what a living wage w/ benefits can give a business - healthy employees. Less turnover. Brand loyalty. I'm bummed. I loved Target. I loved that they brought good design to the masses. I am heartbroken over this move. Then again, I live in a city that gives me other options to spend my money. Can we talk of the tactics that these retailers employ in areas that don't have that luxury? TIF's are a joke. Residents pay through the ass for those. As our property taxes go up the United Airlines, Boeing, Target, Wal Mart, Circuit City et al won't have to pay at all.

Spence

Thu, 03 Aug 2006 13:52:58 -0600

Muni, I think municipal gov't is in the perfect position to regulate business in this manner. It's much more in touch with the needs of its citizens, constituents, etc than Federal and even State gov't ever could be.

NSH

Thu, 03 Aug 2006 13:42:20 -0600

"Think the 119/Marshfield store might actually open in the south suburbs?" Yep, right across the street in Calumet Park, they are dancing in the streets I am sure right about now. Their little town just got a little closer to pulling in ~$3m per year in sales tax revenue. "Yes, things in the city are more expensive, but then, it's well worth it. Would you rather live in Oak Lawn?" The areas of the city like West Pullman that have no commercial and limited industrial revenue really need development, but now have a stranglehold on them because of an idealistic ordinance. They have to pay the same taxes and live by the same ordinances that Tom D Arch does, but they don't even have the $1.75 to get on the bus to take it to the library and login on a public computer to complain about it. So their voices aren't heard by us. What I would like to see is this ordinance work. I am hoping against hope that the mayor does not veto the ordiance, Target backs out, and Home Depot as well. Another Big Box store that has been getting a bum rap that will remain nameless steps up and anchors the property as an extension to the community to show they are not as bad as they are portrayed, the neighborhoods of west pullman and morgan Park embrace the nameless store, Lowes or Menards opens on the Home Depot site, and everyone is happy.

Jason Guthartz

Thu, 03 Aug 2006 13:40:52 -0600

If Daley were smart, he'd see where the momentum is headed on this issue and show some leadership by supporting the ordinance, then work with mayors and legislators from cities across the region - and the country - to pass similar laws. This would prevent big box employers from using their blackmail tactics in playing one town against another (a strategy for lining the pockets of their executives and stockholders at the expense of their workers).

Jeff

Thu, 03 Aug 2006 13:22:40 -0600

Target and Walmart will pull out of any future sites in Chicago period. They will do this to set up an example so that other large cities in the country don't try to the same thing that Chicago has. Sure it may be only a few million here or there for a Fortune 500 company but those millions start adding up when other cities start doing what chicago has done...

Benjy

Thu, 03 Aug 2006 13:20:18 -0600

Has Daley even vetoed this bill yet? Sounds a bit like a political ploy to flip a couple aldermen so the veto can't be overturned...

Matt

Thu, 03 Aug 2006 13:20:18 -0600

Of course the $23 million isnt just given in cash to Target but it does not mean that it shouldnt be factored into their deal. The truth is that the $23 million comes from TIF money and not the general budget whereas the sales tax will be placed into the general budget. It is just an accounting trick which makes the Target look like it is adding to the general budget when in reality it is a money loser for the city.

Rumblin

Thu, 03 Aug 2006 13:18:16 -0600

The problem with the ordinance is the fact that if people don't have Target or Wal-Mart, they're just going to buy the same things at "small big box stores" - Old Navy (clothes), Walgreens (toiletries), Bed Bath and Beyond (consumer goods), etc. To the best of my knowledge, these stores still pay well under $10 an hour to their employees. That's why it is just idiotic that the ordinance is based upon square footage.

Comrade

Thu, 03 Aug 2006 13:16:43 -0600

"In the end, maybe the consumer savings squeezed from the sweat of non-unionized low-level retail employees aren't so great after all" Of course, the people who benefit most from those consumer savings are the non-uniionized low-level retail and other workers. Kind of a vicious circle, eh?

Mike

Thu, 03 Aug 2006 13:13:03 -0600

"In the end, maybe the consumer savings squeezed from the sweat of non-unionized low-level retail employees aren't so great after all." AMEN. Target and Wal-Mart would charge employees to work there if they could. Someday, if this continues, maybe we can return to the company rent era of Pullman, et al. I made $9/hour 13 years ago working in a Baltimore City liquor store during college. It amazes me that $10 is considered excessive. I'm sick of people saying the city council doesn't care about these underserved communities. The truth is that these retailers are using them as leverage. It's disgusting and blatantly arrogant, especially given that their high-level executives make more than they will ever be able to spend. I've shopped in Target a handful of times but I will hereby boycott them from now on. Permanently. I've never set foot in a Wal-Mart and never will. To me their behavior is unAmerican. And their shareholders are unAmerican.

wildtanuki

Thu, 03 Aug 2006 13:11:21 -0600

So we have come far enough where we have begun to question our dependence on oil, and yet we still cave to big business when it comes to the welfare of our fellow man? Labor is one of our most precious resources that we mere mortals have and yet we seem to be giving it away for nearly free so that the few fortunate of us who make more than $10 an hour can more easily afford to buy all this useless shite from Target etc., an the employee who stocked it (not to mention the one that actually manufactured it) can't afford to buy what he stocked or produced. That's lame.

Comrade

Thu, 03 Aug 2006 13:08:56 -0600

The city isn't proposing giving Target $23 million in cash. It's mostly in the form of reduced property taxes (i.e. not increased over the vacant land taxes) for a period of time. Possibly some commitment to improve roads/install traffic signals near the store location. So, while the tax break is a subsidy to Target, it isn't money the city would have collected but for Target. Yes, the municipal government of Chicago is larger than many states--that's the source of many of the problems with the city--why do we need 50 Aldermen--no other city comes close to being so overburdened with do-nothings collecting $100k/year for themsleves and paying large staffs all on my nickel. Makes me sick. And anyone who thinks that businesses WILL open in Chicago just because it's a big market just doesn't understand basic cost/benefit analysis for large businesses. It isn't just about revenues--it's about margins. If, as a result of total costs (incl. labor costs), the margins in Chicago are too far below company average, then they won't open new stores. Someone will point to the volume done by the Elston store--sure, that store will remain. Why? In part, b/c the volume is so huge it overwhelms the higher labor cost. But, as more stores open, the average sales of each store goes down, as people shop closer to home. So, that's part of the equation. Ever been to a Target in Minneapolis, where there's one about every 3 miles? They are NEVER as crazy busy as the average Target in Chicago. So far, the ridiculous per store sales have driven development here; open more stores, average sales go down and so do profits. Really simple. And, given a choice b/t a higher cost location and a similar lower cost location, the lower cost location always wins. Think the 119/Marshfield store might actually open in the south suburbs? I wouldn't doubt it for a second. The Wilson Yards store doesn't really have an alternate location, so that's a more open question.

Larry Griffin

Thu, 03 Aug 2006 12:28:03 -0600

The implication of the main entry, to me, is startingly sympathetic to Target. In fact, the entry is outright misleading--Target has sent a letter to the mayor expressing its intent to withdraw from the project. They have not officially dumped the project yet. The "news" of Target's letter came down from the Mayor's office, anonymously I may add, in the Sun-Times. It's more threats, it's more spin from City Hall, and they've got the ear of the Sun-Times and Trib editors' so they get splashy misleading front-page headlines like "Boxed Out: Target says forget it" to go with it. If the ordinance is not vetoed, Target will eventually go forward with its urban projects, sooner or later. Incidentally, while I'm deeply concerned that some potential Target customers might have to pay a couple cents more for their toilet paper and shampoo, the real cost-shifting when companies pay their employees sub-living wages is on to taxpayers. When the working class lacks the income and benefits to scrape by, they inevitably end up in the tattered remains of our social safety net--at great cost to taxpayers. In the end, maybe the consumer savings squeezed from the sweat of non-unionized low-level retail employees aren't so great after all.

Matt

Thu, 03 Aug 2006 12:06:10 -0600

So the city is giving Target $23 million? The Target store is projected to be 160,000 sq ft and the average Target sells only $307 psf for annual sales of $49.1 million. The City of Chicago gets 2% of that for $982,000 per year. At that rate it will have paid for its subsidy in 23 years or about 3-8 years after its been torn down for being too old. How does paying $23 million for a project that provides less than $1 million per year help keep our taxes down?

NSH

Thu, 03 Aug 2006 11:52:57 -0600

people get paid to troll this site? Damnit!

TomD.Arch

Thu, 03 Aug 2006 11:48:42 -0600

As the piece said, this is the calling of a bluff, no harm no foul. Given the relatively small cost to the store (an extra US$1 mil. per year) and the pressures on companies like Target to continue to expand rapidly, they will come back to the Chicago market in a year or two. Don't sweat it. If they really believed that the ordinace was so bad that they would loose money on stores in Chicago, then they would be closing their existing stores. I do wonder who is paying 'Muni' to troll this site? Just in case 'Muni' isn't a paid shill for corporate interests, let's point out 1) the role of government is NOT merely to facilitate the growth of business, 2) the municipal government of Chicago (not to mention the population and GDP) is larger than many (most?) states in the US and many countries around the world, so yes, they should be making economic policy and 3) yes, things in the city are more expensive, but then, it's well worth it. Would you rather live in Oak Lawn?

Vinny

Thu, 03 Aug 2006 11:45:20 -0600

Navin, Costco can pay their employees well because there aren't many of them. They have less than 1/2 the staff of most big box retailers per dollar of sales. That's why you see them behind the scenes and behind the register but not out on the floor. They operate on a totally different model from Target or Wal-Mart.

Navin

Thu, 03 Aug 2006 11:20:27 -0600

And yet Costco manages to pay its employees at least $10 an hour plus benefits and poor target can't seem to pull this off even with a $23 million city subsidy *cough*bullshit*cough*

Muni

Thu, 03 Aug 2006 11:16:07 -0600

Municipal government should not be involved in economic decision making. This is a major economic issue that was not thought out. The council acted on a whim and caved in to a small amount of constituants in an election year. The city is supposed to make it attractive for businesses to enter the city. If nothing else, all this does is shift costs back to the consumer. Target doesn't end up paying the extra few dollars in wages, CONSUMERS pay in the form of higher prices!

m

Thu, 03 Aug 2006 11:07:04 -0600

So why not boycott Target? They are a bunch of union busting shitbags anyway. Let's hit them where it hurts right back.

Mikey

Thu, 03 Aug 2006 10:59:47 -0600

F#*% Target, I say! I still hold their parent company responsible for Marshall Field's being bastardized into a Macy's...

jd

Thu, 03 Aug 2006 10:10:21 -0600

let's hope chicago annexes evergreen park just to spice things up some more.

NSH

Thu, 03 Aug 2006 10:00:56 -0600

Oh one more thing, Wal-Mart built in EP after Target balked.

NSH

Thu, 03 Aug 2006 09:56:16 -0600

yes target could build an 89,000 sq ft store and pehaps even a second 89,000 sq ft store carrying groceries and such. But they hold the cards in this deal not the city. Target also eyed land at 99th and western in Evergreen, but when EP said they will not offer them subsidies, they moved the development 2 miles west to Oak Lawn who were more than happy to kiss target ass. So in short, this is nothing new from the Target company.

jd

Thu, 03 Aug 2006 09:30:57 -0600

target should just build a 89,999 square foot store.

NSH

Thu, 03 Aug 2006 09:17:24 -0600

Alicia small typo the proposed development is at 119th and Marshfield (right at the i-57 exit ramps)