Red Mercury Labs

Yesterday, the Chicago City Council passed the so-called “Big Box” wage law by a vote of 35 to 14, enough votes to prevent a veto by Mayor Richard Daley. The law requires that employees at large retailers be paid a minimum of $9.25 an hour, with an additional $1.50 per hour in fringe benefits such as health care coverage. Those rates will rise to $10 and $3 by 2010, with automatic increases thereafter.

Proponents of the law argue that any job should pay enough to cover the bare necessities of life, such as rent and food, and that large retailers can afford to pay more. Opponents argue that an artificial floor on the hourly wage will decrease the number of jobs, and that large retailers will choose to locate outside of the city.

Who is right? I think a more interesting question is, how do you determine that $9.25 is the perfect hourly wage to put into the law? Among the supporters of the law, this precise amount must have been the topic of much debate.

There were no doubt the scentists who calculated a rent payment, plus cost of food and other necessities for survival, and divided it by an average number of expected work hours to come up with an acceptable pay rate. Perhaps there were others who argued for just a dollar more, pointing to the huge revenues of these retailers as evidence of their ability to pay it. No doubt comparisons were made to jobs where the rates are heavily influenced by unions.

It is undeniably difficult to decide the correct hourly rate to set into law. But I would like to help, in case this debate comes up again in another city.

I have come up with a diabolical plan to enforce the perfect hourly rate, almost down to the penny. It is an approach that the supporters of the big-box wage law would like, because it is designed to extract the most possible jobs at the highest possible hourly rate from those huge, wealthy corporations.

It works like this. I start by pretending to be hands-off, letting the retailer come into town, and letting them set their own hourly rate for all of the jobs they would like to offer. I make sure that they tell the potential employees in the area how much they intend to pay, and that they are crystal clear about their benefits package, or lack thereof. Luckily, they will do this part of the job for me, since they have big human resource departments who are trained to do this kind of thing.

Now, I have them right where I want them. If they have set the compensation way too low, nobody will even apply for the jobs, and they will be FORCED to raise their hourly rates. Of course, they are cunning, and would never make this mistake.

They might set the hourly rate ALMOST high enough but not quite, such that they get enough people hired to do the work. But my plan works here, too – if the hourly rate is just not quite high enough, these new employees will stop showing up to work, or they’ll quit, or they might even go get a job at a higher paying big-box competitor down the street. This causes turnover, which is expensive, and we all know that the big-box retailers hate spending money, so they will be forced to raise their hourly rate in this case as well.

Now, this is where my plan shines. Once they have raised their hourly rate high enough to not only attract employees but keep them coming day after day to do their jobs, I have succeeded in milking these greedy corporations for as much as I possibly can. The highest number of people will be employed, and they will each be getting paid the perfect hourly rate, with the perfect amount of benefits required to keep them each coming in to work at the big-box retailer every day.

With this plan, I’ve got the retailers locked in forever – if they ever slip up and lower their pay too much, the employees will stop showing up to work, or start working somewhere else, forcing the big-box to up the pay rate again.

And the best part? My plan can’t be overturned for being unconstitutional.