Living Wage Set For Debut

The city wide Living Wage Legislation is set to debut with a press conference on Tuesday at City Hall. The legislation is an outgrowth of the land use battle over the Kingsbridge Armory. Crain’s has the back story: “A dispute over wages that derailed the redevelopment of the Kingsbridge Armory in the Bronx late last year is set to spread citywide: A bill to be introduced in the City Council on Tuesday would mandate wages of at least $10 an hour, plus benefits, for all jobs created by city-subsidized projects slated, according to a story to be published Monday in Crain's New York Business.”

The following is from the press advisory of Living Wage NYC, the coalition that is spearheading the presser tomorrow: “Bronx Borough President Ruben Diaz Jr., labor leaders, community groups, and elected officials will hold a press conference to launch the Living Wage NYC campaign. The goal of the campaign is to pass the Fair Wages for New Yorkers Act to ensure that New York City subsidies for economic development create living wage jobs.”

The coalition, still in formation and growing, includes the following partners: Families United for Racial and Economic Equality; Fifth Ave. Committee; Good Old Lower East Side; Make the Road NY; Micah Institute; National Employment Law Project; Northwest Bronx Community and Clergy Coalition; Retail Action Project; Retail, Wholesale and Department Store Union (RWDSU).

What the Kingsbridge battle taught many of us was that the battle for wage equality is more difficult on a case by case basis-and within the parameters of the city’s restricted land use process. As Crain’s Points out: “If the Kingsbridge battle is any indication—elected leaders in the Bronx and City Council ultimately squashed a project that would have yielded 2,200 jobs—the bill will be met with a frosty reception by the Bloomberg administration. It repeatedly argued that transforming the empty armory into a retail mall wouldn't be economically viable if the mandate for what proponents call a “living wage” was attached.”

With a city wide mandate, all development projects that are subsidized would be competing on a level playing field: “With proponents of the new living wage bill seeking to cover all jobs created across the entire city via subsidized projects, the stakes will now be higher. The Fair Wages for New Yorkers Act, which is expected to be unveiled by council members Oliver Koppel and Annabel Palma, both Democrats from the Bronx, at the behest of their borough's president, Ruben Diaz, Jr., would require developers of a project that receives more than $100,000 in city subsidies—such as bond financing, tax abatements or infrastructure improvements—to guarantee a minimum wage of $10 an hour plus benefits, or $11.50 without benefits.”

The NY Times offers this preview of some of the pitfalls that lie ahead: "In what could set off a major City Hall battle, two City Council members from the Bronx plan to propose a bill on Tuesday that would guarantee wages of at least $10 an hour, nearly $3 above the minimum wage, to all workers at development projects receiving public subsidies. The bill is likely to draw strong opposition from Mayor Michael R. Bloomberg, who vigorously fought, and ultimately lost, a struggle last year over similar wage requirements at a mall that was planned to be built inside the city-owned Kingsbridge Armory in the Bronx."

Big real estate will oppose the bill-but the national trend is going to be hard to stop: "Real estate groups typically oppose so-called living-wage requirements, arguing that they stifle development and hinder private investment. Roughly 140 municipalities across the country have passed similar legislation, including Los Angeles, San Francisco and Santa Fe, N.M., said Robert Pollin, an economics professor at the University of Massachusetts-Amherst who has studied living wage issues."

In our view, the argument for the living wage concept is buttressed by the fact that the tax subsidies, and other inducements for retail developments, create collateral damages for other nonsubsidized retail employers in the project’s catchment area. In addition, many of the developments that the city promotes are auto dependent and cause environmental harm to the host communities. To do so, and to create retail employment that can’t sustain families in NYC, makes very little public policy sense.

In fact, the living wage campaign offers an opportunity for the city council to better understand the limitations of the Bloomberg economic development policies-and the need for a better oversight policy that forces EDC and selected developers to do a better job at evaluating the negative impacts that some of their projects have on exiting small businesses and neighborhoods.

Case in point: Flushing Commons. With all of the usual hoopla about job development, EDC has not yet even tried to examine what kind of impacts will ensue from closing the municipal lot for three years while the project is under construction. And let’s not forget that the property is being conveyed at a less than market rate.

Muni Lot 1 is the lifeline for the local Korean and Chinese businesses-and even after construction, the rates that TDC will charge will, in effect, turn privatize the public facility to the detriment of 400 minority entrepreneurs. The EDC response? A $2 million dollar fund that is so minimal that it is embarrassing that the agency has advanced the small sum-a number that, when divided among the 400 merchants, and amortized over the construction period, amounts to less than $140/month. This for merchants with a monthly overhead of around $10,000!

In our view, the city’s entire economic development strategy is badly in need of an overhaul-and a stringent review, as the Citizens Budget Commission has suggested. The mayor has been busy for eight years building large retail malls that aggrandize a small number of developers at the expense of communities and the small businesses that are vital to the city’s economy.

If, as Crain’s points out, the Bloombergistas believe that projects like the Kingsbridge Armory, “… wouldn't be economically viable if the mandate for what proponents call a “living wage” was attached,” than they probably aren’t worth doing in the first place.