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Will higher wages hurt the economy?

Higher wages for fast food and retail workers could hurt the economy, according to an analysis by the Chicago Tribune.

The analysis includes comments from the Workers Organizing Committee, which led hundreds of workers from national chains, from Wendy’s to Potbelly and from Sears to Victoria’s Secret, in strike actions here last week.  They’re not looking to double wages to $15 an hour overnight; they’re trying to organize a union and address a range of issues.

It also includes a Whole Foods employee who works two additional jobs and still qualifies for food stamps, and a labor economist who is quoted to the effect that high unemployment helps lower wages.

But its major thrust is whether consumers can stand to pay the higher prices that they say higher wages would require.  The economists they ask about this specialize in consumer psychology and marketing behavior.

One crucial piece of information is omitted, curiously:  how big of a price increase are we talking here?

In a column reviewing “the boilerplate argument against higher wages” — which is precisely that it would hurt consumers with “enormous” prices increases — David Sirota fills us in.

Raising the minimum wage to $10.50 would add 5 cents to the price of a Big Mac, according to one analysis.  Another study found that raising McDonalds workers’ hourly rate to $15 would drive the price of a Big Mac up by 22 cents.

Run that by your consumer psychologist.

A recent study by Action Now and Stand Up Chicago found that  raising Chicago retail and restaurant workers’ wages to $15 an hour would cost about $100 million for a sector with $14.2 billion in yearly revenues in the city.  That’s about 2.6 percent of revenue.

“Downtown employers can afford a very significant increase in wages,” they argue.

It’s an important reality check to vague scare talk about higher prices.  That line of arguent works because it involves a “populist insinuation that higher wages would hurt the Average Joe,” according to Sirota.

Here’s another hard economic fact that deserves more attention, courtesy of the Center for Tax and Budget Accountability:  the largest, most profitable retailers in Illinois pay the lowest wages.

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After the school closing vote

With the school board voting to close 50 neighborhood schools — to nobody’s surprise — the movement that sprang up in opposition moves to a new phase.

One indication: while the board was meeting, eight activists were arrested in Springfield blocking the entrance of legislative chambers, demanding the General Assembly pass a moratorium blocking the closings.

Participating were members of Action Now, Albany Park Neighborhood Council, Kenwood Oakland Community Organization, and the Chicago Teachers Union.

“We’re going to keep up the momentum to stop school closings,” said Aileen Kelleher of Action Now.  “There will definitely be more large-scale actions.”

“There’s a legislative strategy and a street strategy,” said Jitu Brown of KOCO.  “We are organizing in our communities to stand up for our children, to stand against disinvestment — which is what this is.”

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Charge city demolitions ‘destroying our neighborhoods’

The city’s program of demolishing vacant homes is just “creating more destruction in our neighborhoods” and not making areas any safer, according to leaders in impacted communities.

“There is no community imput or transparency,” said Charles Brown, a leader with Action Now.  “They are just coming in and creating more destruction in our neighborhoods.”

“Vacant lots are just as dangerous as vacant buildings,” said Brown, a retired police officer and Englewood resident.  “We need to build communities back up instead of knocking them down.”

He spoke as Mayor Emanuel announced the city has demolished the 200th home in what’s being billed as an anti-gang initiative.  There are over 15,000 vacant properties in Chicago.

“This top-down approach to the vacant building problems is just wiping out our neighborhoods,” said Action Now president Michelle Young.  “We want to bring families back into these homes and have the city invest in long-term solutions instead of quick fixes that don’t work.”

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Rebuild neighborhoods by rehabbing vacant homes

West Side residents will meet Thursday night to discuss a proposal from Action Now to establish a Chicago Housing Trust that would rehab vacant buildings as affordable rentals (Thursday, October 25, 6 p.m., Penn Elementary, 1616 S. Avers).

At a South Side meeting last week, residents spoke up about the problems associated with vacant properties.  Action Now leader Charles Brown told about seeing a man taking a young girl into a vacant building; Brown gathered a few neighbors and went to her rescue.

The group has opposed an “anti-violence initiative” by Mayor Emanuel under which over a hundred vacant homes have been demolished, instead proposing a public-private effort they’ve dubbed “Rebuild Chicago.”

“Why tear them down,” said Action Now leader Adeline Bracey.  “We don’t need any more vacant lots.”  She called for a moratorium on demolitions.  “Let’s look at the property and if it’s sound, why not rehab it?”

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Residents oppose demolitions

Mayor Emanuel has begun demolishing vacant buildings in his newest anti-crime effort, but an organization of residents in the affected communities says it won’t work — and there are better ways to deal with vacant buildings.

Action Now will hold a press conference in front of a vacant lot at 53rd and Laflin, Friday, July 13 at 10 a.m., to call on the city to stop demolition and instead use the new Chicago Infrastructure Trust to rehab and rent vacant buildings.

“Vacant lots are not any less dangerous than vacant buildings, and demolishing [buildings] won’t solve the crime problem,” said spokesperson Aileen Kelleher.

She points to the shooting Tuesday of a 14-year-old boy standing in a vacant lot in Roseland.  Last year Action Now held a protest in Humboldt Park at a vacant lot – left unsecured by mortgage holder Chase Bank — where a woman was raped.

One solution is stepped-up enforcement of the vacant properties ordinance, she said.

“If the city had held banks accountable with the vacant properties ordinance – if the banks had kept these properties up and secured them – we wouldn’t be at this point,” said Charles Brown, chair of Action Now’s neighborhood revitalization committee, which developed the Rebuild Chicago plan to finance rehab and rental.  (See yesterday’s post.)

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Action Now: Don’t demolish – rebuild

A community group is taking issue with Mayor Emanuel’s new plan to demolish vacant buildings that serve as gang havens.

Action Now is proposing an alternative strategy:  use the Chicago Infrastructure Trust to finance rehab of the buildings into affordable rentals.

Emanuel says his “message to gang members” is that “you will no longer find shelter in the city of Chicago.”

But according to Michelle Young, president of Action Now, “He’s really saying that working families will no longer find shelter in the city of Chicago.”

On Monday, Emanuel said the city has identified 200 buildings for possible demolition due to their “location in high-crime areas.”  His initiative covers Englewood, Lawndale, Grand Crossing, Garfield Park, and Little Village.

“All over the city there are blocks full of vacant homes,” Young said in a release. “Our neighborhoods have become ghost towns. The mayor is going in the wrong direction.

“The solution to the vacant property problem is not creating more destruction by demolishing buildings,” she said. “We must rebuild our communities by transforming vacant buildings into homes for families once again.”

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What about the neighborhoods?

The Grassroots Collaborative is offering visiting journalists bus tours of working-class neighborhoods struggling with violence, foreclosures, and clinic closings — and they’re questioning the millions of dollars being spent on entertainment at the NATO summit.

Buses leave from the Hyatt Regency at 8:15 a.m. on Thursday and Friday, May 17 and 18, and return by 11 a.m.  Information is at thegrassrootscollaborative.org.

Thursday’s tour will cover Little Village, one of the city’s largest Latino neighborhoods, where community groups are working to address youth violence; and Back of the Yards, where one of six mental health centers recently closed by the city is located.

(The two clinics primarily serving Latino communities were closed, as were four of six South Side clinics, and half the bilingual staff was laid off, all to save $3 million.  Having been repeatedly rebuffed in attempts to hold meetings with city officials – including a City Council hearing blocked by the mayor– the Mental Health Movement is planning to march on Mayor Emanuel’s home on Saturday morning.)

Friday morning’s tour will cover Englewood, a poor African-American community hard hit by foreclosures and violence, and Brighton Park, where low-income Latino residents are developing community schools.

Grassroots Collaborative, a citywide coalition of labor and community organizations, is questioning the priorities of spending millions of dollars to host the NATO summit while the city shuts down clinics and schools, said Eric Tellez.

On another level, he said, NATO spends billions of U.S. taxpayer dollars while poverty and unemployment “devastates communities across the country” and “the global poor fall deeper into poverty.”

Party fund

Last month the coalition called on World Business Chicago, which is raising money to host NATO, to donate comparable sums to establish a Neighborhood Jobs Trust.  In recent statements, the group is focusing on the $14 million being spent on parties for the summit.

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King Day: Occupy the Fed, foreclosures, schools

The civil rights movement, the Occupy movement, and community organizations will come together for a series of events marking Martin Luther King’s birthday this week, including a demonstration Monday at the Federal Reserve led by African American clergy including Rev. Jesse Jackson.

At the time of his assassination, King was organizing an “occupation” of Washington D.C., and after his death thousands of people occupied Resurrection City there from May 12 to June 24, 1968, demanding jobs, housing and an economic bill of rights.

In other King Day activities, housing rights groups are stepping up the drive to occupy foreclosures, and teachers and community groups are demonstrating against school “turnarounds.”

Over a thousand community activists are expected for an Occupy the Dream event (Sunday, January 15 at 3 p.m. at People’s Church, 941 W. Lawrence), where elected officials will be called on to support jobs and tax reform, including closing corporate tax loopholes and instituting a financial transaction tax.

It’s sponsored by IIRON, a regional organizing network that includes Southsiders Organized for Unity and Liberation, Northside POWER, and the Northwest Indiana Federation. Occupy Chicago has endorsed the event.

“We are organizing in the tradition of the civil rights movement,” said Rev. Dwight Gardner of Gary, president of the Northwest Indiana Federation.

“In Dr. King’s very last sermon, he warned us not to sleep through a time of great change like Rip Van Winkle,” he said. “This is a moment of great change and we must put our souls in motion to occupy his dream.”

At the Fed: National Day of Action

Monday’s action at the Federal Reserve (Jackson and LaSalle, January 16, 3 p.m.) is part of a national day of action to “Occupy the Fed” by the Occupy the Dream campaign, with African American church leaders moblizing multicultural, interfaith rallies in 13 cities.  They’ll be emphasizing racially discriminatory practices by banks which have resulted in high foreclosure rates, as well as the issue of student debt.

“There needs to be economic equality, there needs to be jobs for all, there needs to be opportunities for the next generation,” said Rev. Jamal Bryant of Occupy the Dream.

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