December 20, 2004

WM and Taxes in Chicago

The incredibly underrated and under-read Stephen Karlson links to this piece in the Chicago Tribune (rr) about Chicago's tax problems:

Falling wages? No sweat. Ald. Edward Burke (14th), longtime chairman of the Chicago City Council Finance Committee, is sponsoring an ordinance that would require big-box discount stores such as Wal-Mart to pay their employees a "living wage" of $9.43 an hour . Sure beats the cheesy $5.15 an hour federal minimum wage.
That wouldn't really have such a dramatic effect--since, if I remember correctly the average hourly wage at WM in Chicago is over $9. However, there are other problems.

Need health insurance? If the big discounters don't add medical coverage to their benefits packages, Burke's Law will tack on another $3 an hour so workers can buy their own coverage.

Say you don't work for a big retailer? No problem. All should benefit from another Burke-backed requirement: 40 percent of all merchandise sold in the big stores must be made right here in the USA.

This does not bode well for the windy city. Note that if they insist that all those goods must be made in the USA, then China will have to become the 51st member of the Union.

Anyway, Chicago is a high tax region--and the taxes will be getting even more punative. However, people respond to high taxes by living and shopping (at WM) elsewhere:

The real bleeding, though, involves sofas and bedroom sets, refrigerators and DVD players, PCs and iPods. A research outfit called MetroEdge estimates Chicago residents spent $6.5 billion last year on stuff purchased outside the city. Wal-Mart alone figures Chicago residents dropped about $500 million at its 35 suburban stores.
Stephen notes, humorously:
Solution, according to Mr McCarron: make Chicago its own country, and build an Iron Curtain around it. Particularly strong sanctions for those who shop at Wal-Mart.

Posted by Kevin on December, 20 2004 at 12:56 PM