Living Wage Gets Its Hearing
May 12th, 2011

Labor and city leadership collided this afternoon at a packed and feisty hearing on legislation to require city subsidized developers pay a living wage.

Under a bill introduced nearly a year ago, recipients of more than $100,000 in financial assistance would have to pay all of their employees either $11.50 or $10 an hour plus benefits. The controversial bill has garnered 30 sponsors at the council, but it does not have the Bloomberg administration’s support. Council Speaker Christine Quinn, who controls the council’s agenda, has yet to take a position on the measure.

At today’s hearing, the chief of staff to the deputy mayor for economic development, Tokumbo Shobowale, endured two and half hours of back and forth with council members — the vast majority of those in attendance support the proposal. Shobowale attempted to convince the council that the adminsitration agrees with the premise of raising the standard of living for the working poor. It questions, Shobowale argued, whether a wage mandate is the way to do it.

“It’s not a philosophical difference,” Shobowale said. “It’s looking at the data.”

The hearing followed the release of a study on Monday by the Economic Development Corp., which argued the living wage proposal would result in between 33,000 and 100,000 job losses for the city. The study’s methodology and findings drew ire from supporters of the bill today.

“The administration is so full of it, you might want to consider a high-fiber diet,” said Councilmember Jumaane Williams. “It might help with that situation.”

The hearing amounted to a clash of academics and methodology — with supporters citing studies that supported living wage mandates, and the adminsitration calling its recently released analysis solid, current and comprehensive.

Just this morning, supporters of the bill released a counter analysis of the city’s living wage study, which argued its modeling did not rule out other factors that could affect job growth (like an economic downturn). Supporters also claim the city-sponsored study examines the wrong population of projects — it includes an as-of-right subsidy for industrial and commercial properties the bill is not meant to capture.

Our current assessment, based on the executive summary, is that the study is an inaccurate and unreliable guide for policymakers. It contains a series of fundamental errors in methodology and analysis that simply render the study invalid, said Paul Sonn of the National Employment Law Project.

On the other hand, the Bloomberg adminsitration questions whether the City Council would even have the authority to legislate wage standards at economic development projects. Shobowale said legitimate legal concerns have been raised over whether the bill amounted to a minimum wage for a small segment of the economy. That power, his testimony says, is reserved for the State Legislature.

Beyond the legal ramifications, said Shobowale, the numbers don’t lie. Data showed 39 cities with wage standards of $10 had a 2.2 percent dip in employment of low-skilled workers, according to Shobowale’s testimony.

Immediately following the administration’s testimony, Bronx Borough President Ruben Diaz Jr., who initially pushed the living wage proposal, delivered his own figures. He cited the research of Robert Pollin of the University of Massachusetts.

The living wage debate first came to the fore when the City Council rejected a proposal to redevelop the Kingsbridge Armory in the Bronx, because the developer refused to sign onto a living wage mandate. At today’s hearing, Diaz contended it was the Bloomberg administration who walked away from the deal for fear of “starting a precedent.”

Regardless, the decision whether to act on the mandate — at least for now — rests with Quinn. In what could be a sign of her feelings about the proposal, today’s hearing was relegated to a small hearing room in the council’s office building instead of the larger hearing space at the Emigrant Savings Bank. Supporters of the bill said they requested to use the larger space.

“I guess the speaker’s office was unable to arrange it,” said Councilmember Oliver Koppell, one of the bill’s primary sponsors.

By on May 12, 2011, 6:37 pm
In category: Albany,City Hall,Community Development,Economy,Electoral Politics,Eye Opener,Gotham City,Governing,Law,Measuring UP,nextNY,Public Finance,Work and Labor | 6 Comments »

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