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September 12, 2006
Seeing the Light
Russell Roberts
The Chicago City Council recently passed legislation requiring large retailer to pay its employees at least $10 an hour along with at least $3 an hour in benefits. A veto by Mayor Daley was always a possibility although the vote in favor of the legislation was large enough to overturn a veto: (from the New York Times story on the original vote):
Mayor Daley said earlier that the ordinance could impede growth and tax revenues. He did not say yesterday whether he would veto it, but he would have to persuade two aldermen to switch their votes to avoid an override.
Well, yesterday, he vetoed it (HT: Cafe Hayek reader Kevin O'Reilly). And surprise! Suddenly the votes to overturn the veto aren't there anymore. A number of members of the council have suddenly gained a new appreciation for the effects of incentives:
"I am going to be changing my vote, joining the mayor in a veto," said Ald. Shirley Coleman (16th). "The community wants me to make sure that an opportunity exists for people willing to work for something other than $10 an hour, and Wal-Mart has expressed strong interest in building in my ward."
Ald. Danny Solis (25th), a Daley ally, said, "This was a difficult choice, but I'm going to go with the mayor. This ordinance is unfair. The Wal-Marts and Targets of the world can just set up shop on the borders of the city. I'm about a living wage, but not if it handicaps the city."
Ald. George Cardenas (12th), who voted in favor of the measure but signaled a possible switch shortly afterward, said he also would join with Daley.
He said he changed sides on the issue after the mayor spoke to him about the ordinance.
"My decision is based on Mayor Daley's track record," Cardenas said in a statement. "Chicago has never looked better."
Cardenas, a freshman alderman elected with the backing of the pro-Daley Hispanic Democratic Organization, said the ordinance would harm "the very people unions are trying to help."
Greg Mankiw has a very nice analysis of the costs of mandating higher wages in the face of market forces here.
My conversation with Richard Epstein on the economics, politics and constitutionality of singling out particular kinds of retailers for regulation is here.
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Comments
This was an absurd piece of legislation and, thankfully, Daley had the foresight to veto it. Daley knows that that you're not going to entice companies like Boeing to the area with a business-hostile agenda. The aldermen got what the wanted: an opportunity to grandstand and appear to be the protector of their local constituencies. I imagine a lot more of them are relieved that this ordinance has died than are willing to admit publicly.
Posted by: Piso Mojado | Sep 12, 2006 10:59:57 AM
Good to see
Posted by: Aaron Krowne | Sep 12, 2006 2:16:12 PM
All of these facts and arguments were on the table when these councilcritters cast their original votes. It's now obvious (as if it weren't before) that their initial votes were nothing but political pandering and that they knew this was a horrible idea to begin with.
Posted by: Noah Yetter | Sep 12, 2006 2:26:34 PM
Noah, I think that defines most political decisions. Since you and I tend to make decisions based on the merits of the various choices, we are blissfully unaware of the actual motivations of most legislators.
Even when politicians agree with us and give the same arguments, it's not because they've actually seen the logic of them. It's because they were convinced it was in their best interests to vote that way, and they're just spouting the first arguments their campaign advisors dug up.
Posted by: Brian Moore | Sep 12, 2006 3:18:06 PM
Even this veto is pandering to Wal-Mart and its supporters. Though I agree with the decision, it is political and therefore by nature nothing but pandering.
Posted by: Swimmy | Sep 12, 2006 4:27:26 PM
You guys aren't from around here. Here in Illinois these are known as "fetcher" bills. Usually introduced in an election year to pull in additional campaign contributions.
Posted by: johng | Sep 12, 2006 11:57:01 PM
I particularly enjoyed the comment by Ald. Solis, who apparently wants lots of dead Chicagoans. "I'm about a living wage, but not if it handicaps the city." I guess he means it is okay if they do not earn a living wage, which presumably means they will be earning a non-living wage, which I guess means they will be dead.
Posted by: William Sjostrom | Sep 13, 2006 5:09:52 AM
Posted by: laptop battery | Oct 13, 2008 12:15:37 AM
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