A Bad Bet Against a Living Wager

In this morning's NY Post, Adam Brodsky continues with the NYC elite's misguided assault on the concept of living wage legislation-and in the process, fails to grasp just how badly Mayor Bloomberg's economic development policies have damaged job growth and entreprenuerism in New York. The title of the piece, "Death by Living Wage," dramatizes how Brodsky's rhetorical dagger is thrust at the wrong target.

His main premise, that promotion of a living wage means a deadly loss of jobs, doesn't stand up to an even cursory analysis: "What, exactly, do Manhattan Borough President Scott Stringer, city Comptroller John Liu, Bronx BP Ruben Diaz and 28 City Council members have against poor, young immigrants and blacks? Not satisfied that demands for a "living wage" cost The Bronx 2,200 jobs last year, these zealots want to take their job-thwarting efforts citywide. Two bills now in the council would do the trick. Poor, young minorities would suffer most. And Stringer, Liu and Diaz, in particular, are doing everything possible to make sure that happens."

This argument is similar to what the lawyer's term, "fruit of the poisonous tree." Brodsky uncritically accepts the assumption that the Kingsbridge Armory project would mean a gain of 2,200 Bronx jobs. But, what he fails to mention is that it was the developer Related and its consultant that made this unsupported claim-and example of just how badly we need to reform the ULURP process by taking assessments-environmental and economic-out of the hands of the Horn and Hardardt crowd of self servers.

We have made this point before, the assumption of job creation is a chimera that ignores the extent to which projects like this one at the Armory directly compete and erode the existing retail shopping strips-in this case Kingsbridge and Fordham Roads. The handpicked consultants downplay the way in which this malling creates a zero sum game-the developer adding up the sums, while the neighborhood stores count the zeros.

The studies submitted by developers-or by EDC itself-for large scale retail development are fraudulent boilerplate "analyses" that gild the developer's lilly by failing to consider the possible collateral damages generated by the tax subsidized chain stores. Or, is considered, quickly dismissed as if unworthy of serious attention. And, as far as Related's armory plan is concerned, even that 2,200 job number has to be taken with a grain of self served salt.

But the collateral damages are real, and they are being felt all over the city as the mayor unleashed his edifice complex on NY's hapless small businesses. This mega developing exacerbates city policies that prey on neighborhood retailers-as we have said countless times before: "But, back to the Armory. In the case of this development, tens of millions of tax dollars are being used to subsidize the project-one that, when finished, will likely siphon millions of dollars away from the small businesses at nearby Kingsbridge and Fordham Roads; retailers that have been devastated by the current recession as well as the economic policies that the NY Post writes about so movingly. For these entrepreneurs, the proposed mall is like a bus ticket out of town."

What Brodsky fails to evaluate with the same critical eye, is the entire edifice of Bloomberg's tax subsidized development policies-giving million dollar tax breaks, for instance, to one of the country's richest beer wholesalers, while that wholesaler's customers, the city's bodegas, are being shuttered in record numbers (when their owners aren't actually being gunned down by thugs.) While Bloomberg's billionaire reals estate buddy pals are getting these handouts, the city's manufacturers-particularly NY's bakeries-are fleeing to more business friendly climes.

Nothing could better underscore the economic policy failures of this administration than the precious piece done in today's NY Daily News by the inimitable Juan Gonzales. It seems that we are not only undressing NYC tax payers by giving millions to developers, but are also giving millions away in ICIP subsidies to folks for actually undressing: "Its bevy of gorgeous lap dancers and luxurious decor have made Manhattan's Penthouse Executive Club one of the city's hottest high-end strip clubs. But until now, few people realized taxpayers have been subsidizing the fantasy sex."

But stripping us of our tax money doesn't stop there: "And the Penthouse Club is not alone. Starlets Gentleman's Club near the Brooklyn-Queens Expressway in Astoria, Queens, has enjoyed an exemption for years - one worth more than $10,000 in 2010. Up in the Bronx, the Hunts Point Triangle, a bar notorious for a lot more than its bikini-clad dancers, landed an exemption back in 2001. The break was worth more than $12,000 off its taxes this year."

We point this out not just to be snarky, but to make a larger point about how the city uses its tax subsidies without great care-and the fact that there are no adequate oversight or review mechanisms available to question these decisions. Clearly, the current ULURP process is inadequate to the task-especially since economic impact analyses in environmental reviews are shoddy and given short schrift in the truncated deliberations at the city council. We saw this rather starkly in the Flushing Commons development fight, where the consultant for the developer failed to accurately count the number of businesses in the impact area.

Which brings us back directly to the Brodsky broadside against living wage: "Witness last year's tragedy in The Bronx. A developer offered to build a $300 million mall at the Kingsbridge Armory, using $50 million in tax subsidies, but balked at Diaz's demand that all future jobs there pay $10 an hour or more, which would have made the project uneconomical. So Diaz got council members to nix the project. And goodbye 2,200 jobs."

The better fate of all those existing neighborhood retail jobs-particularly those 700 over at MortonWilliams-goes characteristically unmentioned. As does whether the millions of tax dollars would adequately give tax payers a decent bang for the buck. What the city is missing is an economic evaluation and review procedure-separate and apart from the ULURP process. Last year such a proposal was introduced by CM Al Vann, but never received a hearing or any real traction at the council.

It's time to bring it back-but perhaps in a strengthened form that puts some real teeth into the legislation when it is determined that a project's costs-and the subsidies for it-are not commensurate with the benefits being received; especially in light of the collateral damages that need to be fully measured because they certainly aren't now, given consultant collusion (and the fact that local business provides more economic benefits than do out of state chain stores). This is especially important for the ongoing debate about Wal-Mart's entry into the city.

So, here's where Adam Brodsky makes a bad bet. He makes the mistake of all of those gamblers who make their betting decisions based on shaky, often "insider" information. His wager against living wage is based on false assumptions handed out by folks who are little better than race fixers.

Bottom line for us is that these tax breaks are bogus to begin with-but if they're going to be handed out like party favors to the mayor's billionaire buddies, than it is only just that the workers employed at these subsidized malls get properly compensated. To this date, there has been no honest cost/benefit analysis of the mayor's economic development/tax subsidy policies. Until that is done, attacks on the living wage bill are misplaced anger that leaves the real culprit for job loss unscathed.