If Chicago chooses to have no jobs within the borders of the city, if it chooses to force citizens to leave the city to shop, it will face the consequences, as has Cleveland. In the aftermath of the Kucinich era, Cleveland has fewer jobs and the tax increases needed to pay for the city's services have driven more population out so that only the poorest of the poor remain behind, as the city spirals down.

You would think that Chicago would have learned their lesson from the neighborhood that didn't want WalMart. The store located outside of the boundaries of Chicago, but thousands people from within the city applied for the hundreds of jobs available. WalMart is paying what the market will bear, and that is all they should be required to pay.

What folly if enacted. Judge Motz's ERISA-preemption rationale in the Maryland WalMart case applies with equal force. If a line must be drawn between the compensation policies of big and less-big companies, Congress must do so.

And economically, the proposed Chicago ordnance probably has no rational basis for drawing the line as it does. If I understand, companies with big assets must pay their workers more. Wouldn't it make more sense for companies with proportionately greater profits to pay their workers more? A 15-worker company with high profit margins gets to pay lower wages than a mega-corporation with profit margins that are already depressed by overregulation?

The whole scheme is Leninist and confiscatory.

Lisa, Alexandra Lahav at UConn has organized a session for the AALS Annual Meeting in January entitled, "Wal-Mart: A Case Study in Interdisciplinary and Inter-Doctrinal Approaches to Legal Problems." I am on the panel, which promises to be provocative.

[The Chicago ordinance] may be viewed as less about penalizing corporate behavior and more about deciding the appropriateness of states imposing these added costs on large corporations.

What is the difference between the two?

Alas, the City Council in a divided vote approved the law, so we will get to see its impact. I am sure the immediate impact of the vote will be a lawsuit, though supporters of the law claim they can distinguish it from the Maryland law.

Kate, the difference between the two for me is that laws that only impact Wal-Mart seemed designed to paint Wal-Mart as the bad guy for practices in which other companies may also engage. Whether or not you agree with them, I think that states and advocates of these laws are trying to tackle a system-wide problem and focusing only on Wal-Mart clouds the debate.

Gordon, I think that panel sounds great and it will be interesting to hear the different perspectives on this issue in one space.

Corporations are bad vs. negative externalities born by the broader society are bad. Seems clear enough a distinction, though it is an open question whether there is a good remedy to the later view.

For other such situations where a person or entity passes off costs to the public as a short cut to its own profitability, we're willing to shift the cost back. The questions of whether such corrective actions should be taken are normative and practical. There currently is at best an emerging norm that companies as Wal-Mart should bear their societal costs. And the practical problem is how to effect this norm. The ordinance is probably a failure on the practical front. Its normative aspect is interesting, though.

Someone could probably get a decent paper comparing this "corporations replace their divots" norm to the attempted windfall profits norm.

Chicago isn't Cleveland. Slightly larger, you know. Not quite as easy to just hop in the car and decide to drive to a suburb to shop. Attracts a bit more tourist traffic, too. My guess is that on the fringes of the city, where shoppers will have the option to go the suburbs, this will have an effect. But I rather doubt downtown Chicago is going to see much drop in retail activity and I also rather doubt these retailer's threats regarding putting on hold their expansion plans. The stores that they supposedly are putting on hold are generally near the center of the city and rather affluent areas. These retailers are not so stupid as to just give up these customers.

By the way, I'm not really for or against the law. I just find the rhetoric associated with it (Leninist? confiscatory? choosing to have no jobs within the city? come on.) a little over the top. The impact of the law in a place like Chicago will be pretty marginal, in my opinion. It will be interesting to see how it turns out, of course.

I can't claim to be 100% up on this literature, but last I saw, there were some intriguing studies by Card & Krueger showing no unemployment effects of a higher minimum wage. So at the very least, the extent of any dis-employment effect is uncertain (and far from the first comment, "If Chicago chooses to have no jobs....").

Also, even if a higher minimum does decrease employment levels to come extent (which I think is likely, because the economic logic is too compelling), I think that raising the minimum wage may be a rational choice for a city.

If the city's goal is "maximize number of jobs," then raising the min wage probably is a bad move. But it's not at all irrational for a city to view its goal as "maximize number of above-subsistence-level jobs." It may decide that 1000 $20K jobs are more valuable than 2000 $10K jobs, perhaps because folks with $10K jobs have a far lower likelihood of investing in their children, far less ability to invest in their neighborhoods, far less a chance of ever becoming homeowners, etc.

In short, I can't see it as irrational for a city to say, "we'd prefer fewer better-paying jobs over more lower-paying jobs" -- especially when we know so little about the magnitude of each tradeoff.

If the city's goal is "maximize number of jobs"... not at all irrational for a city to view its goal as... [city] may decide that 1000 $20K jobs are more valuable... I can't see it as irrational for a city to say..."

What an intriguing homo sapiens is this city of Chicago -- it has its own feelings, thoughts, and preferences! Perhaps when it grows up, it can marry the Colorado river!

I can see someone didn't take AP Latin in high school and learn to recognize metonymy in their sleep.
http://en.wikipedia.org/wiki/Metonymy
(I presume a law professor would understand the rational basis standard of review for equal protection challenges.)

Insecure Creditor: someone apparently never heard of public choice theories, regulatory capture, the seen and the unseen, the impossibility theorem, and the like.

I normally don’t reply to anonymous cowards, but here is one piece of free advice: if you don’t understand something in other people’s conversation, go research it first.

I feel no sympathy for corporations. I firmly believe they would sell our internal organs for dog food if they could make a buck and not get caught. I also see no problem with forcing these juggernauts to be somewhat accountable for the quality of life in the neighborhoods they reside in. 6.50 an hour is not enough to live on in a small town, let alone a major city like Chicago. I can't see much negative impact in the long run from having happy, well paid employees, who don't need a second or even third job to make ends meet. Also an employee making 10.00 an hour is most likely going to spend a healthy chunk of that money at the place they work, it's just a matter of convenience. It seems to me that if Wal-Mart or any other big-ticket retailer would implement a higher wage willingly, the effect would be to increase it's consumer base, improve the happiness and satisfaction of it's workers, decrease employee turnover, and greatly improve their public image. I know the concept of sharing is seen by money grubbing social darwinists as a communist ideal, but consider how many people retailers like wal-mart employ, and imagine what happens when that percentage of the workforce can no longer afford their rent, or cars, or gas for those cars. The unions are dead, they've fallen victim to their own greed and corruption, something must be done to give the american worker a fighting chance against corporate bullies like Wal-mart, I wish this were federal or at least statewide legislation so these greedy cowards couldn't just turn tail and run like they're threatening.