Tuesday, June 29, 2010

A Good Wager for New York City

If the best revenge is living well, than for those New Yorkers who voted in vain against the mayor’s third term, getting even is getting harder-as this City Room report on the expense of living in NYC makes clear: “For New York City families, increases in the cost of living have far outpaced wages, according to a report to be released Tuesday by a national organization working to advance economic equality for women and their families. The report, known as the Self-Sufficiency Standard for New York City, which is released every five years by the Women’s Center for Education and Career Advancement, compares the amount of money a family needs to make ends meet with the federal poverty level, commonly used to determine whether families receive subsidized housing, food stamps and other supports.”

So, how’s that five borough economic plan of Bloomberg’s working out? The mayor has now had eight and a half years in office, and the lives of many New Yorkers-perhaps a majority-are more untenable than when he first talked about his economic development plans in 2001. The reality is that the Bloomberg model-mega retail developments with poverty wages-has been the worst prescription for economic growth-as the self sufficiency report indicates: “The problem, the report’s authors say, is that only one out of the 10 most common jobs in the city (registered nursing) provide Brooklyn families with adequate income, leaving many to scrape by. “There is a very high level of frustration,” said Merble Reagon, executive director of the Women’s Center for Education and Career Advancement, of the women she counsels, many of whom have hourly jobs that do not have benefits and leave them regularly sacrificing one basic need for another.”

The Bloomberg response? More of the same kind of jobs-and a vicious resistance to the push for a city wide living wage for developments that are tax subsidized by the city. The living wage issue was point-counterpointed in Sunday’s NY Daily News-with Diana Furchtgott-Roth taking the Bloomberg position: “Many Americans are intent on saving money, making every penny count. But in New York City, which faces a predicted operating deficit of $2.8 billion this fiscal year, wasting taxpayer money remains the local sport. New York City is currently considering legislation that will mandate a "living wage" for jobs connected to any new development projects that benefit from city subsidies.”

Wow! DFR believes that, “wasting the tax payer’s money” is a local sport but has nothing to say about the huge corporate welfare giveaways that the Bloombergistas have made into, if not local sport, at least a local art form. And she is mute-struck so, it seems, by the way in which these real estate subsidies have disadvantaged local entrepreneurs in favor of the mayor’s favored cohort of developer billionaires. Gee, we can’t remember DFR saying boo about the complete giveaway of the Bronx Terminal Market-displacing 20 mostly minority distributors-to Steve Ross of Related.

In fact, Bloomberg is so close to these high rollers that he even took time from his hectic golf schedule to advocate for one of Related’s executives before a local co-op board. Yet the aggrandizement of these real estate tycoons is OK with Diana, but the provision of a living wage for a hard pressed citizenry is mocked by this toady to the wealthy.

And she has nothing to say about the Citizens Budget Commission report that found little in the way of justification for the Bloomberg real estate aggrandizement-as we have pointed out before: "But with the city, it's significant that for the largest projects-Coney Island and Willets Point-much of the money currently budgeted is for acquisitions, buying up property that the city doesn't even own. Given that the money goes into the pockets of a few landlords and businesses, it's not stimulating much immediate economic activity. Instead, the city is relying on the hope that the projects will be carried out, eventually."

And, as John Petro argues over at DMI, all that's missing from her analysis is any supporting documentation: "Take Furchtgott-Roth’s piece. The living wage bill will, according to the author: stall development, cause businesses to flee the city, waste taxpayer money, and increase unemployment. Notably absent was any evidence to support these claims."

But Furchtgott-Roth is not without a good sense of humor-or perhaps unintended irony is her métier. Listen to her description of the city’s bidding process: “It makes no sense for the government to award contracts to the high bidder, not the low one. That upside-down logic smacks of waste and corruption. And it means that we'd be taking money out of the pockets of strapped taxpayers, many of whom earn less than the "living wage," so that a select group of unionized workers can make more.”

How about awarding contracts to the no-bidder?-as was the case with Related at the BTM and at the Gateway expansion. Doesn’t that, “smack of corruption,” to our own Princess Di? Or, even better, when Related failed to live up to its bid terms in 2002 at Bradhurst Avenue in Harlem-with a minority competing bidder in the wings-the Bloombergistas (and Deputy Dan Doctoroff in the lead) simply awarded the company an extra subsidy to cover for its failure to comply with the original terms.

This has been the Bloomberg economic development record-and when the projects have been lavishly subsidized, they have been a direct threat to neighborhood businesses like Morton Williams Supermarkets who have never been connected enough to get a dime in public money. It makes you wonder what world Furchtgott-Roth lives in. For her, and the mayor’s amen chorus, subsidizing the very wealthy to provide a poverty wage for workers is sound economics.

But not so much for Robert Pollin, who rebuts DFR in the Daily News counterpoint: “It's hard to take issue with the basic objective behind living wage proposals, which is to ensure that all workers are paid enough to support themselves and their families at a minimally decent standard. The argument for the current New York proposal seems stronger still: In those cases when some businesses get an economic advantage courtesy of the taxpayers, they should especially uphold the community's basic standards of fairness.”

And Pollin goes on to demonstrate that the living wage provision, in spite of its demonization by DFR, doesn’t hurt the developers: “But the facts simply don't support the contention. Businesses subject to living-wage laws have not produced fewer job opportunities for low-wage workers. Research on the Boston measure - a law far broader than what's being considered in New York - found no significant difference in overall hiring levels among firms which were required to follow the living wage law compared to unaffected businesses. The patterns are similar for San Francisco, Los Angeles and Santa Fe.”

Not mentioned by either side of the living wage debate in the News is the manner in which these subsidized projects harm existing local business-or how local business circulates money to a much greater extent and benefit than any of these low wage national chains-a reality that Stacy Mitchell has well documented. So, in our view, if the tax payer money can aggrandize the profits of Steve Ross-a process that we have labeled as, "patrcianage"-it can damn well benefit the retail workers beyond a subsistence wage. It’s the only way that one could possibly justify the subsidy exercise in the first place.