Anarcho-capitalism

CHICAGO, IL

by A.B. Dada
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The news is out all over Chicagoland — Target is pulling out of a new development in one of Chicago’s lower-income South Side neighborhoods.¹ The City of Chicago has just passed an ordinance nicknamed the “Big Box Ordinance” which was approved 14-1 by City Council. This ordinance requires that employers pay even the least skilled worker at least US$13 in wages and benefits (about double minimum wage). This ordinance would apply to Target, Wal*Mart and any of the other “Big Box” stores that have started to open throughout the Chicago area. For years the Big Box stores could not get zoning or approval to open based on the fears of smaller business owners that the Big Box stores would run them out of business.

I was in a retail market for 4 years that competed with Wal*Mart and other Big Box stores. I was on very friendly terms with the store managers as well as the department heads of the departments that competed with me. Almost 20% of my business came from referrals from these Big Box “devils” who realized that my small retail stores were an asset in helping their customers fix problems — I had the Big Box “monsters” to thank.

The South Side of Chicago has been plagued as a low-income area for decades. Target has been planning on opening 2-4 stores throughout Chicago’s lower-income areas and has already proceeded to budget for 2 to open in the coming years. Yet Target has to run each of its stores profitably — the additional wage and benefits requirement would add up to US$1 million in overhead for each store. Remember, these are lower-income areas — Target already has to offer the best prices and service for customers who are not usually able to drive to a discount retailer. How the City of Chicago could think that a wage requirement would help the poor is beyond me — the poor will be helped by having a store with cheaper products that the locals are used to. This would offer a significant savings to the residents which would allow them to continue to support other small stores in the area. Over the past few years, many local businesses have failed in the city’s South Side due to excessively high property taxes (passed on in rent costs) as well as high licensing and sales taxes as well. Some areas of Cook County are pushing 9-10% sales taxes where neighboring suburbs fall as low as 6.5%. That 3.5% difference can mean hundreds to even thousands of dollars a year extra in sales tax payments for a family of 4.

The development that Target was planning on moving into has already received almost US$30 million in City funds to get it going. To me that is proof that the development was never meant to be — if the City destroys the ability for businesses to open and stay profitable, how can they expect to tax other businesses to support an area they’ve already crushed?

Good job, Target. You may not get much of my money, but I will give you more of it now that I know that you won’t play games with the State, at least in this case. The Target in my town has already given nearly US$1 million to local schools (many in the top 10 are private schools) and I’ve never had a problem returning a substandard product. I’ll continue to vote with my dollars and not at the ballot box, and we’ll continue to watch cities destroy opportunities for the residents while they tax them more and more for preferential treatment that helps only the very few and very connected.

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A.B. Dada is the founder and editor of the Global Unanimocracy Network. He lives in the Chicago, IL region where he works as an business relations consultant and incubator entrepreneur. E-mail A.B. Dada with news links or comments on this report.