Chicago Decides to Keep Jobs: Minimum Wage Increase Defeated

Democrats split over battle on minimum wage increase. I may disagree with Daley on many things and dislike him for other reasons, but Chicago can be thankful that he fought on this issue.

A divided City Council today sustained Mayor Daley’s first-ever veto by a 31 to 18 vote: Wal-Mart and 42 other big box retailers in Chicago will not have to pay their employees at least $13 an hour in wages and benefits by 2010.

One day after framing the debate in racial terms, Daley got his way with three votes to spare.

Thirty-four votes were needed to override the mayor’s veto. The attempt fell three votes short. As expected, three aldermen who supported the minimum wage ordinance on July 26 crossed over to support the mayor: Aldermen George Cardenas (12th), Shirley Coleman (16th) and Danny Solis (25th). As expected, they were joined by Ald. Helen Shiller (46th), the only alderman who did not cast a vote on July 26.

The vote came after two hours and 15 minutes of debate following a recess to accommodate chief big-box supporter Ald. Joe Moore (49th), who attended the funeral of six children who died in a Rogers Park fire.

Coleman agreed to change sides after Wal-Mart promised to build an Englewood store at 63rd and Halsted, down the street from the soon-to-be built Kennedy-King College.

Solis has been angling for Daley to appoint him to the job of city clerk vacant since the resignation of convicted City Clerk Jim Laski. But, he said today, “Even if he [Daley] offered it now, I wouldn’t take it. It’s too late. The opportunity was three or four months back when an incumbent could have made something out of it.” . . .

Here is a discussion on the possible implications for Daley:

The Chicago mayor flexed his muscle with his veto of the controversial measure, but his fight with the city council showed that he may actually be vulnerable in next year's election . . .

Thomas Sowell Explains Some Basic Economics

Thomas Sowell asks whether discrimination can explain the high unemployment rate among French Muslims. Hint: labor market price regulations.

Let us go back a few generations in the United States. We need not speculate about racial discrimination because it was openly spelled out in laws in the Southern states, where most blacks lived, and was not unknown in the North.

Yet in the late 1940s, the unemployment rate among young black men was not only far lower than it is today but was not very different from unemployment rates among young whites the same ages. Every census from 1890 through 1930 showed labor force participation rates for blacks to be as high as, or higher than, labor force participation rates among whites. . . .

People who are less in demand -- whether because of inexperience, lower skills, or race -- are just as employable at lower pay rates as people who are in high demand are at higher pay rates. That is why blacks were just as able to find jobs as whites were, prior to the decade of the 1930s and why a serious gap in unemployment between black teenagers and white teenagers opened up only after 1950. . . .

The first federal minimum wage law, the Davis-Bacon Act of 1931, was passed in part explicitly to prevent black construction workers from "taking jobs" from white construction workers by working for lower wages. It was not meant to protect black workers from "exploitation" but to protect white workers from competition. . . .

The net economic effect of minimum wage laws is to make less skilled, less experienced, or otherwise less desired workers more expensive -- thereby pricing many of them out of jobs. Large disparities in unemployment rates between the young and the mature, the skilled and the unskilled, and between different racial groups have been common consequences of minimum wage laws. . . .