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Target Corp. has officially pulled out of a shopping center project on the south side of Chicago, saying that the passage of legislation requiring that employees of big box stores be paid a higher minimum wage than other workers made the location untenable. In addition, Target is expected to make a similar decision about another development on the city’s north side.

Target said the only way it would change its corporate mind would be if Mayor Richard Daley vetoes the measure.

For his part, Daley seems like he is ready to veto the bill if he can persuade at least two of the aldermen who voted for it to change their minds. Daley has characterized the debate about the bill as being about “the future of the city of Chicago,” and said that it hurts the city’s economic development plans. "This deals with economic development and the future of the city of Chicago,” he tells the Chicago Sun Times. “Businesses don't have to be in Chicago…If they don't feel welcome, they'll go someplace else…They can build on the other side [of the city limits]…They're going to get our customers anyway.”

The legislation, passed last month, requires retailers with stores larger than 90,000 square feet and with total sales of more than $1 billion to pay employees a minimum wage of $10 per hour, plus another $3 in health benefits per hour, by 2010.

While the legislation was largely seen as being aimed at Wal-Mart and engineered by the politically powerful labor unions that operate in the Windy City, the Target decision illustrates the broader implications of the so called “living wage” municipal ordinance.
KC's View:
Some of the email we have gotten has suggested that we are favoring Wal-Mart in this debate, which is not the case. We are completely in favor of a living wage, but we simply don’t understand the tiered approach to a living wage, and question whether it is good public policy.

If people need to make a certain amount to live in a city, then that should be the minimum wage for everyone. If health benefits are deemed to be a responsibility of the employer, then make them the responsibility of every employer…and then try to figure out a way to make the system work.