Chicago seems to be making a play for the "peoples republic of" title long enjoyed by Berkeley, Santa Monica, and their ilk. Smo king bans. Foie gras bans. Potential bans on trans fats. The professional do gooders now running what used to be the City of Big Shoulders recently adop ted living wage legislation applicable to big box stores. Long time readers will recall that I'm no fan of big box stores, but this is getting ridiculous.
University of Chicago economist Gary Becker does a great job of shredding the big box legislation:
In a city like Chicago the burden from these responses to the ordinance will fall disproportionately on African Americans and Latinos since fewer jobs will be available to workers in the city with less education and lower skills. In addition, prices in Chicago of items sold relatively cheaply by stores like Wal-Mart and Target will rise because fewer of these stores will open in the city. The mega stores that remain will raise their prices because their costs will go up. Since city customers of these stores are mainly families with modest incomes who seek low prices rather than elaborate service, they more than the affluent classes will be hurt by the rise in prices and reduced availability of big box outlets.
I'm less persuaded by his comment that the law raises serious Constitutional law issues. Unlike the Maryland law recently struck down, living wage ordinaces like this generally are not preempted by ERISA. Absent such a conflict with federal law, this sort of economic regulation tends to get very deferential judicial review under both the (substantive) due process and equal protection clasuses. Or am I missing something?
