Monday, July 24, 2006

Ald. Munoz and the Living Wage: on TV tonight and Streaming

"Public Affairs," is featuring Ald. Ricardo Munoz [Chicago Alderman, 22nd Ward] tonight throughout the City of Chicago on Cable Ch. 21 [CANTV] at 8:30 pm ; and anytime on the "Public Affairs," podcast page on your computer [See here]. Among other topics and issues, Ald. Munoz discusses and debates the proposed Living Wage for employees working for companies in the City of Chicago, education quality and school choice, immigration reform and a potential run by Ald. Munoz in the 4th Cong. Dist. in 2008 with show host and legal recruiter Jeff Berkowitz.
A partial transcript of our show with Ald. Munoz is included, below. The issue covered in the partial transcript is Chicago's proposed living wage ordinance, which is scheduled for a vote in the City Council this Wednesday. Critics of the ordinance, e.g., Ald. Mitts, Professor of Economics Austan Goolsbee [former adviser to Senator Obama] and Mayor Daley argue that the living wage requirement will retard economic development in the City by scaring off Big Box stores, e.g., Wal-Mart, Target, Home Depot, etc. and thereby diminish job opportunities for individuals in the City, e.g., minorities with low skills, especially teenagers looking for entry level part time work-- whose productivity may not yet warrant, in an employer's eye, an hourly wage, with benefits, of $13/hour.

Supporters of the Living Wage ordinance, e.g., Ald. Munoz, Ald. Moore, et al argue that Big Box stores will build stores in the City, irrespective of the living wage requirement. In the words of an economist, they would seem to be arguing that the Demand for Labor is virtually inelastic, i.e., the number of employees hired is insensitive to hourly wage increases.

We discuss, you decide.
The "Public Affairs," podcast page gives you a choice of more than twenty-five different and recent episodes of “Public Affairs," in addition to Tonight's City of Chicago edition of Public Affairs with Ald. Munoz and last week's show with Cook County Commissioner Tony Peraica, Republican Nominee for Cook County Board President. The choice also includes our recent show with Deputy Gov. Bradley Tusk and additional recent shows with McSweeney, Giuliani and Gov. Thompson--and State Rep. John Fritchey [D-Chicago] on our video and audio podcast page[See here]. The podcast page also includes a one on one interview with 8th Cong. Dist. Republican Nominee David McSweeney [Barrington Hills], press conferences held recently with Governor Rod Blagojevich and his Republican Challenger, State Treasurer Judy Baar Topinka, a press conference with U.S. Senator Barack Obama and Cong. Bean and much, much more. [See here].
This week's suburban edition of "Public Affairs," features two of the three candidates in the 8th CD race: Republican Nominee David McSweeney [Barrington Hills] and Moderate Party Nominee Bill Scheurer [Lindenhurst].
From tonight's show with Ald. Munoz [D-22nd Ward, Chicago]:
Jeff Berkowitz: Let’s go over to the living wage. That’s something you’ve been championing, right, for a long time?

Ald. Ricardo Munoz [D-Chicago, 22nd ward]: Yes. Back in 1997, we introduced a Chicago living wage ordinance, which basically said, if you’re doing business with the city, you should pay your employees a living wage. Back then, it was 7.60 [an hour] and it’s not that much of an increase, because the living wage is defined as the hourly rate that you would get paid just to bring you to the federal poverty rate.

Jeff Berkowitz: Back then it was defined as seven dollars and sixty cents an hour.

Ricardo Munoz: Right, 7.60. Right now we’re at about 9.60.

Jeff Berkowitz: That’s for contractors with the city of Chicago.

Ricardo Munoz: Correct.

Jeff Berkowitz: If you want to do business with the city of Chicago, your employees have to get now, currently, 9.60, as their minimum wage.

Ricardo Munoz: Correct.

Jeff Berkowitz: Federally, the minimum wage is 5.15. In Illinois, the minimum wage is 6.50, right?

Ricardo Munoz: So you want to be able to give men and women who are working forty hours a pay check that will make ends meet. I mean, you don’t want somebody to be working two and a half or three jobs because their earning minimum wage at every one of those jobs. And, we are currently considering before the City Council what’s called a “big box living wage ordinance” that would require all large retailers, more than ninety thousand square feet in size, which basically are “super stores,” to pay a living wage, because there’s no reason somebody should work forty hours a week and still be below the poverty line, below the poverty rate, and then have to depend on food stamps, depend on public aid, depend on government subsidies to be able to make ends meet at home, whether it’s paying the bills or putting food on the table.

Jeff Berkowitz: But are people better off being employed at a lower wage and supplementing it with government assistance than being unemployed at the living wage that’s being proposed now of thirteen dollars an hour. So, many economists say it will raise unemployment. And why would somebody be better off—those that get a job, they’ll be better off. But those who become unemployed because the employer is less willing to [employ that person at] thirteen dollars an hour—now they’ve got to get even more government assistance. How are they better off?

Ricardo Munoz: Every time there is a government effort to increase wages, there is a set of economists and corporate leaders that basically scream that the sky is falling. The sky never falls. These individuals—when we passed the living wage [out of the City Council] in 1998, everybody said [that] we are going to lose jobs. We didn’t lose jobs.

Jeff Berkowitz: How do you know?

Ricardo Munoz: When we increased the state minimum wage-

Jeff Berkowitz: Excuse me. How do you know you didn’t lose jobs? You didn’t lose jobs in terms of-

Ricardo Munoz: Because we were still providing the same services, and those contractors-

Jeff Berkowitz: But you could have possibly had even more jobs, more opportunities through the government [Ed. note: that is, the City of Chicago may have had more government programs or expanded programs if its costs of labor were lower, and those programs would have created more jobs; further, the contractors, if able to pay wages closer to the market wage, would have hired more workers in the private sector portion of their business]…

Ricardo Munoz: It should be our job to get people off government subsidies. When you provide a living wage, then that family has more disposable income to buy refrigerators, to buy cars-

Jeff Berkowitz: If they—if they can get a job.

Ricardo Munoz: And they will get it because these companies, like a Wal-Mart, like a Target, like a “super store,” they’re going to come into the city anyway, because they know the market. They see the density.

Jeff Berkowitz: They’re not saying that. They’re saying they’re not.

Ricardo Munoz: Oh, because they just want to scare people. When we passed the living wage ordinance-

Jeff Berkowitz: What about other cities? Are there other cities that have living wages where you’ve seen Wal-Mart come in just as well and just as frequently then where there isn’t a living wage?

Ricardo Munoz: Well, Chicago is, so far, the first large city to consider the big box living wage.

Jeff Berkowitz: So we don’t have any empirical evidence to say it will be as you say or it will not.

Ricardo Munoz: The state of Massachusetts did it and Wal-Mart is still there.

Jeff Berkowitz: But how many stores came in after they put in a living wage? Do we know?

Ricardo Munoz: I do not know.

Jeff Berkowitz: Because you’ve got a guy [an economist]—you say economists say this—at the University of Chicago named Austin Goolsbee. You know the name?

Ricardo Munoz: No, I don’t.

Jeff Berkowitz: He advised Senator Obama when he was running for the U. S. Senate in the 2004 campaign. So, I’d say he [Goolsbee] is a card-carrying liberal. Okay? [Berkowitz smiles]

Ricardo Munoz: Okay.

Jeff Berkowitz: He [Professor Goolsbee] said this [the Living Wage Chicago ordinance] is the worst thing you can do. He’s saying these big box stores are preferred by consumers in Chicago, [giving them] lower prices. This is what they want- they want parking, they want good selection. He says economic development would occur across (and is occurring now, Roosevelt Road [South of the Chicago Loop], out to your neck of the woods on the western border of Chicago), with Targets, Home Depots [being started]. This is going to put a kibosh on that, fewer stores, fewer jobs. This comes from a professor at the University of Chicago economics department, who supported Barack Obama and advised him. [To hear Goolsbee debate a contra view on this subject [Professor Joseph Persky], go to the audio library for WBEZ’s excellent Eight Forty Eight program and click on June 28, Big Box Wages segment, nicely done by CPR's Catrin Einhorn].

Ricardo Munoz: And we respectfully disagree. These companies want to come into the neighborhoods because—if you look at the Little Village neighborhood, sixty thousand people in the 22nd ward live there. Sixty thousand people that still need to buy milk, that still need to buy disposable diapers. They still need to buy all these commodities. And, the stores are going to come anyway, so [you] might as well improve people’s lives by increasing the minimum wage.

Jeff Berkowitz: Even if some do come in, you don’t think possibly Wal-Mart would choose, Target would choose, Home Depot would choose to divert some of their resources elsewhere where they feel they could compete better, because now they’re going to be competing [in the City of Chicago] with [smaller] stores that are not required to pay the living wage.

Ricardo Munoz: Home Depot and Target are already paying a living wage. It’s the Wal-Marts that aren’t-- that pay minimum wage. So the Home Depots and Targets are already here; they’re already paying that wage.

Jeff Berkowitz: They’re not required to pay a living wage, are they?

Ricardo Munoz: But, they’re already paying a living wage.

Jeff Berkowitz: They’re all paying thirteen dollars an hour?

Ricardo Munoz: Over at Home Depot, their entry-level wage is eleven dollars an hour.

Jeff Berkowitz: So if a guy comes-

Ricardo Munoz: The living wage is set at $10/hour. [Ed. Note: the living wage, with required benefits, is scheduled to increase over time to $13/hour].

Jeff Berkowitz: What if a person works ten hours a week-- he [or she] is a high school student, you’re telling me he’s making eleven dollars an hour, not nine, maybe not eight?

Ricardo Munoz: The entry level wage at Home Depot is eleven dollars an hour.

Jeff Berkowitz: For full time, or for part-time?

Ricardo Munoz: I think for both.

Jeff Berkowitz: But you know the argument is that you want people-
To learn how to work, to learn how to handle a job, so you might want them to work ten hours, fifteen hours [at a] lower wage
that is not necessarily the wage they will be earning all of their life. [Ed. note: Ald. Mitts has made this argument]. But you’re convinced the living wage is the way to go?

Ricardo Munoz: Correct.

Jeff Berkowitz: You’re convinced that it doesn’t cause any increase in unemployment?

Ald. Ricardo Munoz [D-Chicago, 22nd ward]: It doesn’t increase unemployment.

Jeff Berkowitz: It doesn’t? You’re convinced of that.
Public Affairs, featuring as its guest Chicago Ald. Ricardo Munoz [D-22nd Ward]. The show was recorded on July 2, 2006 and is airing tonight on the City of Chicago edition of Public Affairs, July 24 at 8:30 pm on Cable Ch. 21. . The show with Ald. Munoz, who may run in the 4th Cong. Dist. Democratic Primary in 2008, is also available as a video podcast at the Public Affairs Cinema Complex, along with more than twenty five other shows, which are also airing there. [See here].
Transcript draft prepared by Amy Allen, who also does research for “Public Affairs,” and has her own political blog [See here].
Jeff Berkowitz, Show Host/Producer of "Public Affairs," and Executive Legal Recruiter doing legal search can be reached at