EDITOR’S UPDATE: Walgreens responded to our report 2/11/15 – “Walgreens is today informing the Oakland city council that it is not requesting an exemption from the city’s living wage ordinance. To clarify recent comments by others, it is not our company’s policy to seek such exemptions from living wage ordinances. We have not yet determined whether we will sign a lease for a new store in Oakland, but that decision will not be based on the exemption application submitted by the real estate developer.”

OAKLAND (KPIX 5) — East Oakland is one step closer to opening a Walgreens at Foothill Blvd. and Seminary Avenue. Tuesday, Oakland’s Community and Economic Development committee voted 4-0 to exempt the mega-retailer from having to pay workers Oakland’s living wage, which goes into effect March 2.

‘Fashion Headquarters’ opened its doors at that same intersection in East Oakland last summer. Boutique owners Tanisha Jefferson and Lita Cook say business is good.

“If I could hire a worker right now it would be a lot easier for me,” says Jefferson.

Under Oakland’s living wage hike means they will have to pay that new worker $14.10 an hour.

“I can’t afford to hire anybody right now.”

Jefferson and Cook were shocked when to learn Oakland lawmakers voted to open a Walgreens on the empty lot across the street and the retailer would only have to pay workers $12.25 an hour, along with medical benefits.

“They’re a big franchise so they make a lot of money,” says Cook. “If you make a lot of money, you should be able to pay like everybody else.”

Last November, Oakland voters approved the living wage of $14.10 per hour for employees who do not have medical benefits, and $12.27 an hour for employees who do have medical benefits.

Walgreens agreed to pay workers $12.25. So, technically, “that’s a difference of two cents,” said Councilman Noel Gallo.

But Jennifer Lin, deputy director of the East Bay Alliance for a Sustainable Economy said that figure is misleading, because Walgreens only offers medical benefits to employees who work more than 30 hours per week. Lin said any employees who work less than 30 hours and do not receive medical benefits should be getting paid $14.10 per hour under Oakland’s living wage. The city council’s exemption would mean they would only earn $12.25 per hour, a difference of $1.85 per hour.

“We know that Walgreens made $809 million in profit just in the last three months. The CEO makes $8,000 an hour,” said Lin. “And yet the company says it can’t pay Oakland workers a $14.10 an hour living wage?”

Gallo said the Walgreens development has been in the works for years, on a lot that has remained undeveloped for more than a decade and has attracted blight and illegal activity. Gallo said the Oakland has little leverage, and if the city denied Walgreens the exemption, the retailer would scrap plans for a store.

“Walgreens made it very clear, if you don’t create this flexibility or waiver, then they’re not negotiating,” said Gallo. “They’re gone.”

Councilmember Gallo said the patch of land is in a blighted, high-crime area that no one else wants to develop. So for him. it’s worth it.

Jefferson and Cook at Fashion Headquarters disagree.

A final vote could go before the entire Oakland city council as early as next week.