Friday, August 11, 2006

Economic reality doesn't apply to Chicago

Don't you just love liberal Democrats? So stupid, yet so earnest. RCP's blog pointed to this editorial about the City Council's law to force big stores to pay government mandated wages.
Add Lowe's Home Improvement Center to the growing list of retailers that are putting their Chicago development plans on ice.

Lowe's joins Wal-Mart and Target in a limbo of the City Council's making. The council last month ordered "big-box" retailers to pay their workers $10 in wages and $3 in benefits by 2010. Mayor Richard Daley could veto the ordinance. Until that is settled, new stores on the drawing boards for depressed Chicago neighborhoods, offering hundreds of new jobs and millions in tax revenues, are on hold.

Not to worry, assures Chicago's self-appointed retail consultant, Ald. Joe Moore (49th), who sponsored the ordinance. Those big-box retailers have no choice but to come to Chicago because "we have huge density," said Moore.

Once this little flap about government-ordered wage levels blows over, Moore believes, the Wal-Marts and Targets and Lowe's of the retailing universe will flock to Chicago even if they have to pay higher wages than they do in the suburbs.

This appears to be a new Chicago School of Economics. It's a school that says Chicago can ignore the rules of markets and competition because, well, because the City Council has decreed they just don't apply here.

"We have people who want to spend money," said Moore. "We have a large city, so people in the center core are not going to drive miles to save 10 cents on toilet paper."

He's right on the first point, dead wrong on the second. Chicagoans will drive miles to save money and to seek jobs if that's what they have to do. Last year, Chicagoans spent more than $530 million at Wal-Mart stores outside the city. By various estimates, Chicagoans generated $5 billion to $6 billion in sales in the suburbs in 2004.

Suburbanites shop in Chicago too. But they can't shop where there isn't a store.

This is also true: A job that doesn't get created in the city doesn't pay a "living wage"--or any wage.


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