Thursday, August 03, 2006

Playing "Chicken" in "The Hog Butcher for the World"

It seems the Chicago City Council ordinance that would force big-box retailers to pay a living wage is playing out as expected, right? In the article linked HERE and above, ABC's Windy City affiliate reports that Target is threatening to back out of a proposed store on the South Side.

Small retailers have long complained that big-box stores run them out of business, and they are right. The council's tactic, it seems, is to force the giants to make a choice: pay a premium wage because they exert an unfair advantage over smaller stores, or don't come to town at all.

Protectionism is a sticky subject. The US practices it in agriculture, steel and other commodities markets. France subsidizes its film industry to compete with Hollywood. Independent musicians in Canada can get government grants toward the production and marketing of their music or the filming of a music video, which allows them to compete with the corporate music industry.

Often, as in the case of US farm subsidies, large corporations are the beneficiaries of these tactics to the detriment of small businesses in developing nations and the US. Chicago's plan could potentially be helpful to the small guys - like the programs that help French filmmakers and Canadian musicians.

Don't be surprised if Target, Wal-Mart, Home Depot, etc., relent to these demands, determining that the higher wage will not necessarily affect the tremendous profits they will reap in a developing market like South Side Chicago. But let's remember, Daley still has until Sept. 13 to veto. He has been a very vocal opponent of the ordinance.

It's an economic game of chicken between the city council and the mega corporations. It is a game I wish more so-called "public servants" had the guts to play. We'll see who blinks first.


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