Large retailers have killed a proposed ordinance that could have imposed minimum wage and benefits mandates on their stores in Chicago.

Members of the Chicago City Council passed a “big box” ordinance in July, but Chicago Mayor Richard Daley vetoed the bill Monday.

Members of the City Council voted 31-18 Wednesday for overturning the veto, but ordinance supporters needed 34 votes to overcome the veto, officials say.

The ordinance would have required stores with more than 90,000 square feet of space owned by companies with annual gross revenues greater than $1 billion to pay their employees at least $9.25 an hour beginning in July 2007.

The large retailers also would have had to pay fringe benefits of $1.50 an hour. The minimum amount for fringe benefits would have risen to $3 per hour in July 2010.

Daley argues in an explanation of his veto that passing the amendment would have pushed big retailers to the suburbs without doing much to improve working conditions in Chicago.

“There is understandable anger when large companies reward their executives and shareholders handsomely but skimp on wages and benefits for their workers,” Daley says.

But Daley says the best way to ensure higher wages for retail employees and others in Chicago is to increase the minimum wage at the state and national levels.

WakeUpWalmart.com, Washington, a group that supports legislation aimed at improving wages and benefits at large employers, has issued a statement condemning the veto and the Chicago City Council’s failure to overturn the veto.

“The American people overwhelmingly want living wages, economic security and health care for all,” says WakeUpWalmart.com spokesman Paul Blank. “Any corporation or politician who does not wake up and respond to the American public’s desire for change will face a serious public backlash.”

The National Retail Federation, Washington, has praised the Chicago council’s decision to sustain the Daley veto.

“Mandating wage and benefit levels on the state or municipal level does nothing to address the underlying problems that are driving up the cost of health insurance,” says NRF President Tracy Mullin.