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Living Wage Study Gets Approved -- With Skepticism
Gotham Gazette
Courtney Gross

June 8, 2010
View the Original Article

A study to examine the economic viability of a living wage requirement was approved by the city’s Industrial Development Agency board today, but city officials, including Comptroller John Liu, are already raising questions about whether it will be truly independent.

The IDA board gave the OK to use up to $1 million to study how a living wage proposal would impact the city economy. Such proposals are pending in both the City Council and the State Legislature — largely spurred from defeat of the Kingsbridge Armory project last year. The IDA has not yet selected a consultant to conduct the study. A spokesman said one will be selected in the coming weeks. The agency has received five proposals.

Liu was one of three IDA board members to vote against the living wage study, calling the proposal a “sham.”

“An independent, impartial study on wage requirements for publicly-subsidized economic development could be helpful to all parties involved,” Liu said in a prepared statement. “The consultant contract proposal before us today, however, fails to ensure the delivery of an objective product. My office had offered specific recommendations to improve the study, to no avail. It is unfortunate that the EDC is intent on squandering a million dollars on this charade of a study.”

Liu’s staff sat down with the Industrial Development Agency to make recommendations to the living wage proposal, all of which were rejected by the IDA, according to the comptroller’s office. Those recommendations included the creation of a peer review panel of labor economists to review the study’s results and allowing IDA board members to vote on whether to adopt the study’s recommendations.

According to Dave Lombino, a spokesperson at the Economic Development Corp., which oversees the IDA, the consultant would be required to regularly meet and interview with a group of stakeholders. That group includes local unions, like 32BJ, advocacy groups, like Good Jobs New York, and real estate interests, like the Real Estate Board of New York.

“We’re undertaking the most comprehensive study on the effect of living wage that has ever been undertaken anywhere in the country and we have a balanced group of external stakeholders in place that will have an opportunity to shape and contribute to it,” Lombino said. “Our methodology will be public, and if individuals disagree with the results they will, of course, have an opportunity to voice their concerns.”

This heated living wage debate was sparked when the City Council rejected a proposal to turn the long-vacant Kingsbridge Armory in the Bronx into a shopping mall last year. The opposition was because the developer would not require tenants to pay a living wage.

Now a bill at the council, introduced by council members Annabel Palma and Oliver Koppell at the request of Bronx Borough President Ruben Diaz Jr., would require any developer that receives public subsidies to pay a living wage to every employee on the premises. The council is also considering another bill to require recipients of city assistance to pay a prevailing wage to building service employees.

Also today, nine members of the council sent a letter to the president of the Economic Development Corp., Seth Pinsky, urging him to conduct the study in a “transparent, independent manner.” The letter also argues for the creation of an academic advisory panel to review the findings of the study.

Council members expressed concern that the study’s results are “predetermined,” because the Bloomberg adminsitration has voiced opposition to living wage standards. The city defines a living wage as $10 an hour plus benefits.

Click here to view their letter.