Poor Chicago

by Russ Roberts on September 27, 2006

in Wal-Mart

Poor Chicago. A Wal-Mart finally opened there, right in the city. The Associate Press story is worth reading.  Here are the two highlights of the article.  The first is this summary from the article:

Self-professed "shopaholic" Julie
Edwards arrived at Chicago’s first Wal-Mart store two hours before its
grand opening Wednesday — and she wasn’t alone.

snaked around the mega-retailer’s West Side building long before it
opened, filled with residents excited to welcome the store, its
bargains and its jobs to the area.

"I love this store," Edwards said. "It’s about time we get nice stores in this neighborhood."

Wal-Mart to Chicago was a four-year journey that pitted unions and
small business owners against politicians and activists eager to bring
jobs to the city’s economically depressed West Side.

Yes, it did pit unions against politicians. But it really pitted unions against consumers and potential employees. That’s the unseen struggle that’s going in the Wal-Mart debate.

The second highlight is the article’s take on Wal-Mart’s impact on jobs and wages.

More than 15,000 people applied for the
400 jobs at the new store, where an estimated 98 percent of workers
live in the neighborhood, said store manager Ed Smith.

store’s opening comes two weeks to the day after aldermen failed to
override Chicago Mayor Richard Daley’s veto of the city’s so-called
"big-box ordinance."

The measure would have required large
stores like Wal-Mart to pay workers at least $10 an hour — plus $3 in
fringe benefits — by mid-2010. The rules would have applied only to
companies with more than $1 billion in annual sales and stores of at
least 90,000 square feet.

At the time, Wal-Mart officials
cheered the measure’s defeat, saying the aldermen who voted against it
were supporting "valuable job opportunities and increased savings for
the working families of Chicago."

On Wednesday, Smith said the lowest paid person at the store makes $7.25 an hour, and only two workers make that.

Daley and other opponents of the ordinance said it would have jeopardized the city’s ability to draw and keep large retailers.

like Edwards echoed the sentiments of many Wal-Mart supporters who said
a job that pays minimum wage is better than no job at all.

want to see them make $10 an hour, but if they can’t, at least they can
make something," Edwards said. "They’re creating jobs for our

FIFTEEN THOUSAND people applied for the 400 jobs. Only an econometrician unconstrained by economics could conclude that somehow the increase in demand for workers by Wal-Mart can somehow lower wages in the Chicago area. I’ll stick with Julie Edwards’s assessment.


54 comments    Share Share    Print    Email

Previous post:

Next post: