Editorial: Tackling ‘big box’ stores

Friday, July 28, 2006 | 7:47 a.m.

In a bold move this week, the Chicago City Council passed an ordinance requiring that by 2010 Wal-Mart and other large stores must provide a minimum wage of $10 an hour and benefits equivalent to another $3 an hour.

The ordinance applies to stores that cover more than 90,000 square feet and are part of companies that gross more than $1 billion annually, the New York Times reported.

The vote came after months of debate, with those concerned about keeping big businesses on the tax roll opposing the ordinance and champions of lower-income workers supporting it.

Wal-Mart's Chicago-area stores pay a $7.25 hourly minimum wage, the Times reported. That amounts to gross annual income of $15,080 for a 40-hour week. The federal poverty guideline, under which a family is eligible for public assistance, is $20,000 for a family of four.

Local and state governments are beginning to propose wage and benefit laws for so-called big-box stores because their lower-paid workers often require public assistance, particularly for health care. The governments believe large, highly profitable companies such as Wal-Mart are able to provide compensation sufficient enough to prevent their workers from needing tax subsidies.

In January, the state of Maryland passed legislation requiring that companies with more than 10,000 workers must spend at least 8 percent of their payroll on employee health care or pay into the state's Medicaid fund. Last week a federal judge overturned the law, which specifically targeted Wal-Mart, on the grounds that company benefits are regulated federally, and not by a patchwork of state laws.

But if General Motors expected the government to subsidize its struggling pension program, the public would be in an uproar. Expecting the social service system to subsidize the inadequate pay and benefits offered by multibillion-dollar retailers should inspire similar outrage. These huge operations should pay their own way.