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Bill Seeks to Set Wage Standards
Wall Street Journal
Michael Howard Saul

May 24, 2010
View the Original Article

Developers on city-subsidized projects would be required to pay workers at least $10 an hour under a City Council bill expected to be introduced this week, months after council members scuttled plans for a mall inside the Bronx's Kingsbridge Armory because the developer balked at demands for a similar wage standard.

A coalition of government officials, civic activists and labor leaders plans to renew the push for citywide job and wage standards in publicly funded economic-development projects.

But businesses assert that new wage standards would be untenable for many.

At the heart of the effort is the controversy surrounding the failure to build a $310 million project at the Kingsbridge Armory, an initiative backed by Mayor Michael Bloomberg.

Business leaders say the collapse of that project is proof that imposing the standards can lead to no new jobs, while those who support higher wages consider the Kingsbridge project a rallying cry.

City Comptroller John Liu plans to speak in favor of a higher wage standard at a breakfast forum Monday sponsored by the Drum Major Institute for Public Policy, a liberal think tank.

"We should have a strong labor and wage standard in New York when it comes to using large amounts of public economic subsidies for privately owned developments," Mr. Liu said in an interview.

"When private developments get public subsidies, there should be some public benefit as well."

According to a draft of the legislation, any project receiving financial assistance valued at $100,000 or more from city government would be required to pay employees a minimum wage of $10, not including benefits. The wage standard proposed would be adjusted annually based on the Consumer Price Index.

Kathryn Wylde, president of the Partnership for New York City, a nonprofit group of business leaders, said, "It's a very expensive intervention in the private market that the city can not afford right now."

She add that "it will mean that many projects, particularly serving low- and moderate-income neighborhoods will not go forward."

The legislation comes on the heels of another bill that would mandate a prevailing wage for building service employees in buildings that collect rent from any agency or group that receives $10,000 or more in funding from the city.

The Wall Street Journal reported May 11 that the Bloomberg administration has already voiced opposition to that legislation.

Andrew Brent, a spokesman for Mr. Bloomberg, said the prevailing wage bill "would add costs to the very projects that can least afford them-those in the lowest-income areas, those with affordable housing or community space, those benefiting nonprofits and others that wouldn't happen on their own without subsidy."

Neither Mr. Bloomberg nor City Council Speaker Christine Quinn, a Manhattan Democrat, has taken on a position on the soon-to-be introduced living wage bill.