How best to influence a retailer?
As a Monty Python character once noted, “This redistribution of wealth is trickier than I thought.”
Wal-Mart Stores Inc. seems to deserve a lot of the avalanche of criticism it has received in recent years. It exhibits many of the traits of a bully, acted out on a massive economic stage rather than in a schoolyard.
However, it just didn’t sound right when the Chicago City Council voted to require big-box stores to pay employees at least $10 per hour in wages plus $3 in fringe benefits by mid-2010. It didn’t sound much like the free market at work. It sounded more like an edict from a central planning committee in the old Soviet Union.
Will it work?
Wal-Mart last week announced that it is raising starting wages at about a third of its nearly 4,000 U.S. stores by an average of 6 percent. The one-third approach isn’t impressive, but it sounds like at least a bit of good news for American workers.
Of course, Wal-Mart denies any connection between the Chicago vote and its pay raises. We’ll have to wait for more inside memos to be leaked before we know if the two actions were actually linked.
However, Lowe’s Cos. Inc. said last week that has put on hold its plans for two home-improvement centers in Chicago, and said its action definitely is a result of the council vote.
A Lowe’s spokeswoman said the company was “very disappointed” with the vote, and a shopping center manager said Lowe’s is waiting to see if Chicago Mayor Richard Daley vetoes the ordinance.
We could be seeing some gamesmanship in play there, but we’re also seeing a connect-the-dots picture of how a city can lose jobs even as it tries to protect workers.
Perhaps the lesson is that local governments should pressure employers in more subtle ways. When big companies come seeking incentives, that’s the time to write some good citizenship into the basic financial agreement.
West Des Moines reached a modest compromise with Wal-Mart in regard to its Galleria at Jordan Creek store. Next time, let’s raise the bar a little higher.