CHICAGO — The City Council, over the objection of Mayor Richard Daley, voted Wednesday to enact a so-called living wage ordinance requiring big-box retailers to pay workers at least $10 an hour with $3 in benefits by July 2010.

Both Wal-Mart and Target opposed the ordinance and suggested it would curtail future store development here.

The measure, which affects stores of at least 90,000 square feet that are owned by companies generating $1 billion in annual sales, passed 35 to 14 after more than three hours of debate. At least 34 votes were needed to override a possible veto by Daley, who said the measure would damage business development and job creation.

Proponents of the ordinance said Chicago should be in the forefront of setting worker pay and benefits standards.

“If big-box retailers want to come to urban areas, we want them to come on our terms, not their terms,” said Alderman Joe Moore, chief sponsor of the legislation.

The vote was another setback for Wal-Mart in its effort to expand into major cities because of store saturation in rural areas. Political leaders and union officials in New York, Chicago and other cities have opposed the world’s largest retailer, alleging that Wal-Mart doesn’t pay adequate wages or provide sufficient health-care benefits for employees. The Bentonville, Ark.-based company has mounted a vigorous counterattack, boosting benefits and touting plans to help small businesses in areas where it builds stores.

The council decision “sends a message that Chicago is closed for business, closed for development and closed for job creation,” Wal-Mart said in a statement. “This imposes special-interest mandates that will unfairly deny savings and job opportunities to those who need them most. It’s wrong for the City Council to tell the people of Chicago where to shop and to make it harder for inner-city residents to find jobs.”

Anti-Wal-Mart sentiment surfaced in Chicago two years ago when the retailer proposed two stores in low- to middle-income areas. At that time, the council voted down a Wal-Mart for the city’s South Side and narrowly approved one on the West Side, where many residents said the retailer would provide needed jobs.

The Illinois minimum wage is $6.50 an hour and the federal minimum wage is $5.15.

This story first appeared in the July 27, 2006 issue of WWD. Subscribe Today.

Wal-Mart and Target were joined in opposing the ordinance by companies such as Nordstrom, which employs 750 people at its Chicago store.

The measure, which goes into effect July 1, 2007, initially raises the local minimum wage for big-box stores to $9.25 an hour and gives workers $1.50 an hour in benefits. That amount increases to $10 an hour and $3 an hour by 2010.

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