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Feasibility Study Funded on City Living-Wage Mandates
Crain's New York
Daniel Massey

June 8, 2010
View the Original Article

The Industrial Development Agency Tuesday approved up to $1 million for an Economic Development Corp. study on the feasibility of tying living wage mandates to city-subsidized economic development projects, even as the study came under fire on two fronts.

Comptroller John Liu continued his recent attacks on the EDC, calling the study a “million-dollar sham” that “fails to ensure the delivery of an objective product.” And nine council members wrote to EDC President Seth Pinsky, expressing “concerns about the manner and spirit in which this study is conducted.”

At the root of both complaints is the fact that the very administration commissioning the study has repeatedly argued that living and prevailing wage provisions would hinder development and kill jobs, creating the perception that the outcome is already determined.

“It is critical that this study is conducted in a transparent, independent manner, and equally critical that it not appear that the study's conclusions are predetermined,” council members Brad Lander, Annabel Palma, Oliver Koppell, Melissa Mark-Viverito, Jumaane Williams, Deborah Rose, Margaret Chin, Gale Brewer and Letitia James wrote to Mr. Pinsky.

Under the EDC proposal, an advisory committee made up of labor unions, business and real estate groups and think tanks would make recommendations to shape the terms of the study. Both Mr. Liu and the council members are instead calling for an academic advisory group made up of economists to review the study's scope, methodology and results.

“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,” said an EDC spokesman. “Our methodology will be public, and if individuals disagree with the results they will, of course, have an opportunity to voice their concerns.”

Labor groups have derided the study as a delay tactic at a time when wage mandates are gaining momentum in political circles. And business groups counter that living wage proponents are just worried a rigorous study will prove living wages are not feasible.

A fierce wage debate derailed the redevelopment of the Kingsbridge Armory in the Bronx late last year, prompting the city to move forward with the study. It comes as the council considers a bill that would force projects that receive any subsidies from the city to pay wages of at least $10 an hour plus benefits for all jobs they create. The city has opposed a separate bill that would give prevailing wages to building service workers at projects that receive city subsidies, but the measure has strong council support.

The IDA board approved the funding of the study by a vote of 8 to 3. The EDC has received responses to a request for proposals and is expected to select a consultant this month. The results of the study are expected to be released by early 2011.