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CHICAGO-Mayor Richard Daley has vetoed the so-called “big-box ordinance,” passed by the City Council in July. It requires retailers with more than $1 billion in sales and stores of more than 90,000 sf to pay wages that are significantly higher than the current Illinois minimum of $6.50 an hour.

The council passed the measure in a 35-14 vote. It would take 34 votes to override the veto. The council meets on Wednesday, Sept. 13. According to published reports, at least two council members who voted for the measure have suggested they will now follow the mayor’s lead and vote against it. The veto was Daley’s first ever in his 17 years in office.

In a letter to the council, Daley wrote, “I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage. But I do not believe that this ordinance, well intentioned as it may be, would achieve that end.” Instead, he said the ordinance would drive business from Chicago.

According to published reports, the ordinance would affect 35 stores already in Chicago. Among them are Kmart, Toys R Us and Sears. The mayor’s veto drew quick praise from Wal-Mart, Target, Lowe’s and others.

In a statement, Michael Lewis, SVP and store operations president of Wal-Mart’s Midwest division, said, “We commend Mayor Daley for vetoing the ordinance and ensuring more jobs, more convenience and more choice for Chicago’s working families. His action encourages desperately needed business investment and development in the city, with job opportunities and savings for those who need it most.”

Plans for a 445,000-sf Target on the South Side are currently on hold. A statement from Target called the ordinance part of an “extreme agenda being promoted by special interest groups. The ordinance would have discouraged new retail development in Chicago communities needing it most by driving up the cost of doing business.”

Lowe’s, which opened a unit in Chicago a year ago, said through a spokeswoman that the company believed “the ordinance was unfair and created an unfair playing field.” Lowe’s has held back on plans for additional units in Chicago. Specifically, the ordinance requires retailers of the size and scope defined in the measure to pay at least $10 an hour, plus $3 an hour in fringe benefits by mid-2010. This would be nearly double the Illinois minimum and well in excess of the federal minimum wage of $5.15 an hour. Among the other cities that have, or are considering instituting so-called “living wage laws” include San Francisco, Washington DC, and Santa Fe and Albuquerque, NM.

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