Thursday, July 27, 2006

Minimum Thinking in Chicago

You know your business inside and out.
You’re the expert, which is why you’re doing what you do. You know your profit margin, you know where your Achilles Heel is, you know how close you are to going out of business…as well as how far ahead of the game you are.

So what if I came to you and said you have to run your business a certain way, differently from in the past? What if I came to you and said that instead of compensating your employees as you do, you must now increase your operating expenses…with no proportional return in output?

And what if I told you that because your company has been more successful than other companies, you will be forced to operate differently, and other companies less-successful or smaller than you will be allowed a free pass on this new rule?


And what adjustments would you be forced to make in your business to make up the difference in those increased operating expenses? Can you afford to suck it up and cover the increased expense? Will you cut your workforce so that the amount you’ve budgeted for labor will be able to cover the increased expense? How do you as a business operator continue to survive with an overnight increase in the cost of doing business?

The City of Chicago is now the biggest city in the nation to require big-box retailers like Wal-Mart and Target to pay a "living wage."

The new city ordinance requires mega-retailers to pay wages of at least $10 an hour and another $3 in fringe benefits by mid-2010. Mom & Pop stores all over the country are rejoicing.
All three of them.

The law only applies to companies with more than $1 billion in annual sales and stores of at least 90,000 square feet. There, take that, you mean, nasty big-box retailers. That’ll level the playing field.

All we need now is for some smart bunch of advocates to legislate the meaning of "living."
Don't even get me started...

The State of Illinois already pays a minimum wage that’s $1.35/hour more than the Federal Minimum Wage. Walmart already pays an average hourly wage of $11 in Illinois.

I’m predicting a run on moving vans, as large companies escape from Illionois to locales where it’s less costly to hire people. In fact, Wal-mart is already making plans to refocus its efforts on suburban stores, which will result in less service to Chicagoans living inside the city limits. Target is also reportedly re-thinking it’s presence in Chicago.

The morons who advocate mandates for increasing minimum wages and imposing living wage floors are doing a disservice to the groups for which they advocate. “Minimum wages” are not meant to be living wages. The motivation should be to achieve a better wage or get a better job as a result of self-improvement through higher education and better skills.

The Chicago City Council just stuck another blow for the socially-destructive philosophy of entitlement—that people are “owed” a living, regardless of their personal accomplishments, or lack thereof.

If you operated a billion-dollar business and were considering a move between a city that offered a healthy economic environment, and one that dictates you must pay workers an inordinately higher wage because you’re big and they’re feeling left out, where would you go?

No comments: