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Closing Living Wage Loophole Would Mean Millions For Chicago: Study
NBC Chicago
Edward McClelland

November 1, 2011
View the Original Article

A new study by professors at the University of Chicago and Roosevelt University finds that closing the "living wage loophole" at O’Hare and Midway airports would result in at least $6 million more a year in economic activity in Chicago.

The loophole allows airport concessionaires to pay their employees less than the $11.18 an hour required of other contractors doing business with the city.

Last month, 31 aldermen introduced the Stable Jobs, Stable Airports Ordinance to require a living wage at Starbucks and Cinnabon, too.

According to the study:
The most direct benefit would accrue to those airport concessions workers who would be covered by the Living Wage Ordinance. We estimate that 1,600 of the 2,400 concessions workers at the two Chicago airports would increase their wages an average of approximately $2 an hour.

Whereas the vast majority of these workers live in the city of Chicago, most concessions revenues (roughly 75%) come from customers who live outside the metropolitan area and most concessions profits (also roughly 75%) leave the region. Therefore, the living wage component of the ordinance would have a stronger impact on the local economy than if most customers and companies were local. We estimate there would be a net annual increase in local purchasing power of between $3 million and $8 million a year…Our expectation is that this infusion of economic activity would most likely be at least $6 million a year.

Most of this additional purchasing power would be spent locally, resulting in substantial increases in sales tax revenues for the city of Chicago and Cook County as well as substantial increases in income and sales tax revenue for the state of Illinois.