Learning from LA

In July 2006, by a vote of 35-14 the Chicago City Council passed an ordinance that required big-box retailers to pay a “living wage.” The big-box living-wage ordinance mandated that companies with more than $1 billion in annual sales and stores of at least 90,000 square feet pay wages of at least $10 an hour, plus $3 in benefits by 2010. Wages would be adjusted for inflation in subsequent years. Smaller stores not affected by the ordinance would still pay Illinois’ minimum wage of $6.50 an hour. With the ordinance passing by the 35-14 margin, unions and community groups felt they had a veto-proof majority, but in September of 2006 Mayor Richard M. Daley vetoed the ordinance, as he had promised to do the first veto during his 17 years in office. After much politicizing in the press and the usual behind-doors deals, 31 city council members voted to override the mayor’s veto, short of the 35 votes that were needed. Wal-Mart, the main target of the ordinance had threatened not to build stores in the city if the law was enacted.

Many in Chicago were split on the ordinance: Bishop Arthur Brazier of the Apostolic Church of God, an influential political player, said prior to the first city council vote, “I cannot understand why the City Council is going into the collective bargaining business and actually fighting a union battle.” Alderman Ricardo Munoz of the 22nd Ward, who supported the big-box ordinance, said, “We won’t lose them. Wal-Mart wants to come into Chicago because they see the market. They see how much is being spent in Chicago proper. They want to be here. They just have to pay a living wage.”

Dennis Gannon, president of the Chicago Federation of Labor, was quoted in the Chicago Tribune after Mayor Daley’s veto as saying, “Unfortunately, supporters of the big-box law won’t stand down.”… We may have lost this battle with the mayor. It doesn’t mean the war is over.” Curiously the battle for the big-box living wage ordinance does seem dead in Chicago, for now. Despite elections in the spring of 2007, in which a number of alderman who opposed the ordinance, or flipped their vote after Daley’s veto were defeated, the ordinance has not come up for another vote in the city council, or even been reintroduced in committee meetings. And even more perplexingly, Wal-Mart has not moved into the city of Chicago as they said they would; originally Wal-Mart said they would open a minimum of seven stores in the city, currently only one Wal-Mart has opened, debuting in the Austin neighborhood in September of 2006, just after mayor Daley’s veto.

To make sense of the battle over Wal-Mart moving into Chicago I sat down with Virginia Parks, Assistant Professor in the School of Social Service Administration, University of Chicago. She is co-authoring a book with Dorian Warren, Assistant Professor of Political Science and International & Public Affairs at Columbia University. The book is tentatively titled, The New City Trenches: Race, Wal-Mart, and the Urban Politics of Inequality due to be published in early 2010

 

Can you talk about how we got to a place where, “any job is a good job”.

‘Any job is a good job’ is a very compelling argument in the context of high-unemployment and very little economic development. This is what Dorian and I talk about [in the book] – racialized uneven development… a decades-old process of underdevelopment that begins with de-industrialization but continues to play out in low income communities of color. These neighborhoods have been caught in a cycle of high unemployment and little to no development within their immediate borders. The issue is that if Wal-Mart is interested in coming in there’s some reason it wants to come in. These neighborhoods have something that Wal-Mart needs. This is what activists were trying to push residents in these neighborhoods to understand: you don’t have to give everything away. You’re not in a desperate situation; you’re actually in a powerful situation. You have consumer power—you buy toilet paper and soap just like anybody else. And you have a physical site that Wal-Mart can develop. So why not leverage that as a bargaining chip?

This is a critical moment. You get it once every couple decades to decide what kind of development you want in your neighborhood. We know that unions have been critically important for building the middle-class, particularly in the black community. Why not fight for union jobs? We also know that Wal-Mart can leave very quickly. There are hundreds of mothballed Wal-Marts across the nation. How do we know Wal-Mart isn’t going to just use this as their stepping stone into other markets within Chicago? So you get your Wal-Mart for three years, maybe five years, and then it’s gone. So use this moment to make decisions about long-term sustainable development, about good jobs that aren’t going to go away.

 

This is a strategy that activists in L.A. have adopted using Community Benefit Agreements (CBA). Can you talk about how activists in L.A. have used CBAs?

Community benefit agreements are legally binding contracts between an entity such as a developer and a community. They’re very different from a big-box living wage ordinance in that they’re not a public regulatory mechanism; you don’t go through the government, they’re privately held agreements. This is a strength and a weakness. It’s a strength in that communities can engage politically on their own accord, directly with the developer. Their weakness is that you don’t get the benefit of that regulatory framework, so the teeth aspect of a CBA may be quite weak. CBAs are still quite new so the research is still evolving.

This was something activists talked about briefly in Chicago after the 2004 zoning defeat of the South side Wal-Mart. It was very brief because CBAs require a tremendous amount of organizing and communication among community members, community organizations, and other groups such as unions. They have to come to the table as a unified group. Chicago organizations just weren’t at that point then. Groups were able to develop that kind of unity and strength over the next couple of years. That’s what you saw in the summer of 2006 when they were able to push the big-box living wage ordinance as far as they were.

We don’t have an example of a CBA in Chicago. In L.A., CBAs have been around for several years, and organizations have become very smart about tracking new development there. One thing about CBAs is that they only work when you have new development. The idea is no justice, no growth. If you want to come into our cities then you need to do it somewhat on our terms. We know that we have that bargaining power; we have a valuable site. You need to come into Chicago or L.A., otherwise, why would you be here? That was also the argument behind the big box living wage ordinance.

The first CBA was formed around a proposed development in Hollywood and was sponsored by a key councilwoman, Jackie Goldberg. She didn’t run it through the city council, but that was a key aspect politically of getting that CBA. Goldberg was able to say to that developer, ‘I’m the one who signs off on these zoning changes and your permits; you need to go talk to these community groups first.’ The second CBA in L.A. was negotiated around the Staples Center, where the Lakers and the Clippers play downtown. What’s so exciting about that agreement is that it actually has living wage language that applies to all workers who work in the Staples Center, not just those who were directly employed by the developer, but those who work for all the vendors in the stadium—the concessions, the t-shirt and hat sellers, they all have to pay a living wage.

This CBA also has very strong language around first-source hiring. The Staples Center is located very near the Pico-Union area, a low-income Central American neighborhood. The CBA guarantees that these residents have a chance to get some of the jobs at the Staples Center by mandating that vendors go through a community-sponsored hiring hall to fill a certain percentage of their jobs. These residents also got parks and, of all things, parking (very important in L.A.) as a result of this CBA. They were able to win a whole host of community benefits that came along with this development.

What does the developer get out of it? Well, they get a green light on the political side. Because what essentially communities give up is, they agree not to fight the development. We’ll back you on this, we’ll tell our councilman we want this development, it’s good for us as well. We know we’re going to get jobs, and they’re going to be good jobs because we made sure of that. We’re going to get green space, we’re going to get transportation improvements. It’s a win-win situation.

It’s what Dorian and I call the politics of a new accountable development movement. It definitely builds off the living wage movement, but these CBA’s go in a new direction. What’s happened in L.A. that’s different from a number of places that have taken up CBAs is that they’re usually coordinated through one organization. It’s called the Los Angeles Alliance for a New Economy (LAANE). Other cities like Denver follow this model very closely, Milwaukee as well. The model is that these organizations are non-profit, community-based organizations that work closely with labor. They’re not an arm of labor, they’re a separate entity altogether, but they usually work in coordination with a central labor council [in Chicago this is the Chicago Federation of Labor.]

You have to be strategic about targeting developments for a CBA, and that’s what LAANE has done. They know as soon as something gets proposed that it’s coming down the pike. What usually happens is that you find out too late, you find out that Wal-Mart is coming in and there is nothing you can do, you’re scrambling. In L.A. they know way out, years in advance, they may not know exactly who it is, but they know somebody is looking at this parcel of land and that the proposed use is retail. They know it’s coming through the planning commission. They can begin educating the community about the proposed development and possibly begin building a campaign around a CBA. I think it’s very exciting as far as giving community residents and workers a new voice around economic development. But activists in L.A. are very explicit about CBAs as a tactic, not a longterm strategy, for more equitable economic development.

 

It seems like L.A. has a really great patchwork of things, CBAs and a living-wage ordinance passed in 1997 that’s indexed for inflation. Why has L.A. been able to accomplish so much and not Chicago or New York or other big cities?

The verdict is still out on Chicago; I think New York is following closely behind L.A. We’re seeing some exciting movement here, so it could be that in five years time Chicago will look like L.A. on this front. But there are some real key factors that are obstacles along the way. These are some of the issues that Dorian and I are taking up in the book. One is the context of political institutions; the rules of the game.

In Chicago, we have the ward system, we have 50 alderman. Up to this point they have been a ‘rubber stamp council’—what the mayor says goes. For someone who studies urban politics, the big box living wage ordinance is exciting as it’s the first veto of this Daley administration’s tenure.

 

First in 17 years.

First in seventeen years. Maybe this is the end of the rubber stamp council; this is why I say maybe the verdict is still out.

In Chicago, there’s also the unwritten rule of aldermanic privilege. [As an alderman] if I want a development in my ward, the agreement among my colleagues is that they’ll all sign off on it. There’s very little interest in coordinating citywide development. Under Mayor Harold Washington there was a change in that type of thinking but it didn’t last long. In Los Angeles, you have fewer council members, 15, who represent many more constituents. L.A. is a bigger city than Chicago, but it has a more transparent development process.

Many commentators in L.A. felt that the same aldermanic privilege rule is at work there too, but our argument is that this rule operates very differently than in Chicago. Community members in L.A. have access to the planning process, and the planning commission, in a way that we don’t have here. Decisions and the rules around those decisions are much more transparent.

One of the first mechanisms that community organizations like LAANE leveraged was the environmental impact review. Through this process, whole plans of a development are made public. Even if you’re not concerned about the environmental impact at all, the impact review is a very important process that brings transparency. It gives the community a window onto what the proposal is, and it slows the political side of that development process down long enough for community residents to respond and act. We don’t have anything like that here in Chicago, so it makes it much more difficult even if you have the same strategy.

There is, I would argue, a very different labor movement here as well. Labor is changing across the country; I think it’s changing in Chicago as well. But the important labor player here is, as I mentioned before, the central labor council. The Chicago Federation of Labor is changing here too; the fact that they took a lead on the big-box living wage ordinance is quite exciting. But it’s still dominated by the building trades to large extent, and though the trades agreed to kind of step back on this one [the big box living wage], they still are the primary political player at the Federation. Their interests are very different than the interests of workers in other sectors, particularly in the service sector. The trades are interested in development for the jobs at the front end, building the development, while other unions are interested in what kind of jobs the development will bring after it’s built. Even the types of workers tend to be different. The trades tend to be primarily white—but not completely—and primarily male. Workers in the service sector are much more likely to be people of color and women. You haven’t seen that changing face of labor expressed at leadership levels in Chicago in the way that you have in L.A. In L.A. it’s really those service sector unions that are at the helm, especially at the L.A. Federation of Labor, and it’s these unions that are the most progressive unions, it’s the SEIUs, the UNITE HEREs. Even the UFCW, a major player in the big box campaign, looks different there than it does here.

The UFCW has been fighting Wal-Mart across the country because it directly threatens union jobs in the grocery sector. In 2003-04, there was a huge grocery workers strike in Southern California that was prompted by the threat of Wal-Mart coming into the market. But when Wal-Mart proposed to come into Inglewood, CA, this small municipality that is surrounded by L.A., the UFCW said to LAANE, ‘You run the campaign. We trust you. You know how to do this, you get it.’ The union just totally gave over the reigns of the campaign to the community group, LAANE, in a way that they didn’t do here [in Chicago]. The UFCW was willing to work with community here, but by no means were they willing to give over the reigns.

Another difference between L.A. and Chicago is that, here in Chicago, there’s not a single organization like LAANE that coordinates campaigns like these. The Grassroots Collaborative—the coalition that spearheaded the big box living wage—is very interesting in that it’s a true coalition that comes together around just a few key issues, a few key campaigns. Then the individual organizations go back to doing their own work. LAANE has institutionalized a program around this kind of work that is ongoing and longterm. Organizations have joined on and have said, ‘We really think it’s important to track economic development. We can’t do it, but you can, so we’ll be a dues-paying member, and we’ll come to your board meetings, but we trust you to do the work and the strategizing.’ Day in and day out, LAANE is fully staffed, it has researchers, it has organizers. That kind of institutionalized presence is critically important, particularly for the implementation of living wage ordinances and CBAs.

When you look at living wage laws, sure it’s great to pass them, but lots of municipalities pass them because they know that the law just goes on the books without having any real effect. That’s when the implementation of the law and its enforcement becomes really important. But you have to have resources and community groups that are willing to engage in that oversight. LAANE does that work, it institutionalizes that implementation process.

 

Again, what stands out when comparing L.A. to Chicago is it seems that activists in L.A. have been more interested in pursuing a variety of strategies to gain a voice on economic development.

I think it’s still too early to say, afterall Chicago did innovate the big box living wage ordinance, but at this point in Chicago we don’t have that variety. It’s very important to work within your neighborhood, and I think that’s an incredible tradition that we see here in Chicago, although it’s very hard then to work at a city level and that’s what activists have been able to do in L.A. to a degree that they haven’t here. I think that’s somewhat structural. The mayor is extremely powerful (again, the 2007 aldermanic elections may signal a change), and the ward system keeps you focused on your alderman. If you go for citywide change, then you have 50 people you have to reach, even though strategically that’s not so true with committees and such, but in L.A. it’s much easier—you only have 15 that you have to move. And you don’t face a mayor with the same political power as Daley. And it’s already so big, that you have to think bigger (just think about the size of one council district), so a number of organizations, one that I used to work with, they think regionally. They just say flat out we’re a regional community organization anchored in three neighborhoods in L.A. They are very adamant in their mission statement that they’re committed to changing Los Angeles for poor people of color who live everywhere in the city, that they’re working for economic justice across L.A. And they have a labor movement that’s very much committed to that same vision, and that helps bridge traditional ‘city trenches’ that divide communities from one another and from labor. ♦