"Target doesn't want to take with one hand and give with the other—they want to take with both hands," said Flora Johnson, a personal care assistant and former grocery store employee speaking at a Living Wage Coalition press conference at a South-side Target store last week.
"They took our $9.9 million and now they're threatening to redline Chicago to scare us into settling for low-wage jobs. We won't stand for that."
Johnson was referring to the recently released Target Subsidy Report which revealed that the Target store she was standing in front of at 1940 W. 33rd St. received $5.3 million from the city.
Another store at 2050 W. Peterson—Chicago's newest Target—was found to have received $4.6 million. Both grants of tax dollars were provided through the Tax Increment Finance (TIF) district in each area.
TIF is a controversial program that the city implements to encourage businesses into certain districts using the community's property tax base.
On July 26, 2006, the Chicago City Council voted 35-14 in favor of the Big-Box Living Wage Ordinance, which would require stores with more than 90,000 square feet and with annual revenues over $1 billion to pay a wage of $10 an hour with $3 an hour toward benefits by July 1, 2010.
The law applies to over three dozen companies operating in the city. Some, like Cosco—the business model from which the city ordinance was fashioned—have already been providing their employees with a wage comparable to the one soon to be enforced by city law. Other big-box retailers, however, have threatened to keep out of the city unless the new law is repealed. With several stores around Chicago, the Target Corporation had remained relatively quiet on the city's wage proposal issue which had been on the table since 2004. Yet just before the ordinance's passing, Target announced that they would halt plans to build other stores if the big-box measure became law.
Having stayed true to their word, city sites that were to become new Target stores have now become a devastating disappointment to communities that are in desperate need of the employment promise and shopping options that such new stores would afford.
Many are upset that Target's supposed commitment to community supporting endeavors, both in terms of a P.R. image—the company's website boasts donating $2 million a week in volunteer initiatives, grants and scholarship— as well as agreements made with the city of Chicago in exchange for subsidy, are instead abandoning neighborhoods in which they had planned to build.
"We shouldn't pay a company millions of dollars if they aren't going to give their workers a living wage," said Marina Martinez, of UFCW Local 881 who also spoke at the Living Wage Coalition press conference. "Target has made it clear that it's willing to take taxpayer dollars many times over: through building subsidies, through consumer dollars, and through the public assistance that their employees need because they are not paid a living wage or given decent benefits."
Subsidy in Exchange for Community Support
The Target Subsidy report was compiled by the Neighborhood Capitol Budget Group NCBG (a coalition of community-based organizations dedicated to improving Chicago neighborhoods through public investment) in response to Target's reaction towards the city's big-box law. The report details how the company has garnered millions from Chicago's tax payers with an understanding that Target will then give back to the community it serves.
"When a store like Target gets TIF money, they sign on to a public benefit clause which indicates what public benefit they will contribute to the community or to the larger city of Chicago, and then outline that in their agreement with the city," explains John Paul Jones, Director of Community Outreach for NCBG.
However, Jones explained that not until recently has Target articulated how they will give back to the neighborhoods they inhabit. He mentions a session he attended in Englewood earlier this month where Target announced the millions of dollars in support the company plans on giving back to Chicago. Yet many feel that the company is only now making an effort to demonstrate their community support due to their publicly unpopular opposition to the big-box ordinance.
Jones refers to a big debate over a Target store on the city's south-side. When built, the new store took over land that once belonged to an open community space known as Brown Park. "The community made an agreement with the city on relocating that park. Yet it is not clear that Target contributed to the relocation or rebuilding of that park."
Aside from TIF money, the city has also contributed considerably in other ways to welcoming a new big-box store. For other Chicago Targets—there are now 11 in total—the company did not receive TIF money themselves but instead saw tens of millions of dollars in development infrastructure that directly benefited the location.
"Target would not put their name on [such a] community benefit plan. Oftentimes developers will request money to provide infrastructure support for big-boxes and Target has been a recipient of that kind of infrastructure support... Because of their interest in [a certain] intersection, the city contributes huge amounts of money to satisfy their traffic and access needs."
At the Living Wage Coalition press conference, Flora Johnson explains that when stores like Target and Wal-Mart underpay workers, all retail and low-wage workers in the city are affected by the lower standards. She mentions that taxpayers also carry the additional burden of providing food, shelter and health care for low-paid employees.
Overturning Big-Box
Supporters of the ordinance maintain that big-box stores need Chicago and are hungry to break into the urban market. They say that this initial pull-out from city building plans is only a temporary threat used to overturn the big-box law. Others, however, are concerned that such an understanding is proving to be a costly gamble.
Mayor Daley, who opposes the law, points out that retailers like Target are merely interested in the city's consumers and could still cash in on this market (and avoid the city's wage law) if they built just outside Chicago limits. "In the suburban areas all the mayor's love this—they call me," said Mayor Daley last week. "They think this is the greatest thing happening to their economic development because they know they're going to live right across the city line."
While the deadline for a veto decision is less than a month away—September 13, Mayor Daley has still not said whether he will indeed veto the ordinance—which would be his first veto in the 17 years he's been in office. His initial obstacle has been convincing at least two aldermen to switch sides on the issue in order to fend off a veto override by the city council.
The first half of this support came Monday as Alderman Shirley Coleman of the 16th ward said that she had changed her mind about the big-box law. Citing the rampant unemployment in their respective districts—and continued pressure from the business community—other aldermen seem to be wavering in their initial support of the wage ordinance.
However, another factor for Mayor Daley to consider is the popularity of the ordinance among Chicago voters. Even with more aldermen on his side, given the support that the ordinance enjoys among city residents (a poll by Lake Partners Research firm found that 84 percent of city voters supported the living wage including 90 percent of the city's African American voters) such a scenario could prove hard to sell.
"I am appalled at Daley and those elected officials for not wanting the working poor to have a living wage, especially after they voted themselves an increase," said Zakiyyah Muhammad an Association of Community Organization for Reform Now (ACORN) activist speaking at the Living Wage Coalition press conference. "If Daley and the city can give a Target $5.3 million then they should care enough about the people here in Chicago who wants to see those businesses pay a living wage."
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