Applies to big-box retail giants like Wal-Mart, Home Depot and Target
Chicago (30 July 2006) - The City of Chicago has passed the first "living wage law" in the United States, forcing mega-retailers such as Wal-Mart, Home Depot and Target to pay workers a minimum wage of $9.25 an hour (up from the current rate of $6.25).
The new law applies only to stores with at least 90,000 square feet of space and $1 billion (US) in annual sales across the company.
If such a law existed in Canada, it would raise the minimum wage for such wealthy chains to $10.50 an hour in Canadian dollars.
Minimum wage laws are set in Canada by the provinces. Rates currently range from $6.70 ($5.90 US) in New Brunswick to $8.50 ($7.50 US) in Nunavut. However, B.C. has a two-tiered minimum wage with a starting rate for new workers of $6.00 an hour ($5.25 US an hour).
The Chicago law was approved 35-14 by city council members after weeks of heated debate and immediately drew retaliatory threats from the multi-billion-dollar retail chains to move operations outside the city limits.
However, supporters say the $1.2 billion in potential sales that Wal-Mart and other retailers could make by expanding to meet untapped inner city retail markets will easily outweigh the cost of paying workers the hourly increase.
In one high-unemployment west side neighbourhood, where workers are putting the finishing touches on the city's first Wal-Mart, the new law is welcome news. More than 9,000 people applied for the 450 jobs that Wal-Mart will offer when the Chicago store opens next month.
The law will affect 42 stores and 7,500 workers, and has the potential to affect many more.
The National Union of Public and General Employees is supporting a campaign by the United Food and Commercial Workers (UFCW Canada) to organize Wal-Mart employees in Canada.
Footnote: The United States Congress, which hasn't raised the American minimum wage in 10 years, voted Friday to boost the rate from $5.15 ($5.80 Cdn) an hour to $7.25 ($8.25 Cdn) in three stages - $5.85 ($6.60) on Jan. 1, 2007, $6.55 ($7.40) on Jan. 1, 2008 and $7.25 ($8.25) on Jan 1, 2009. The bill must still be approved by the U.S. Senate and signed by the president to become law. NUPGE