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Boston Group Receives $1M for Living Wage Study
Daniel Massey

August 12, 2010
View the Original Article

But proponents of living wages complain that the city has chosen consultants with built-in bias against local mandates.

A Boston-based consulting firm has been chosen to conduct a $1 million study on the feasibility of tying living wage mandates to city-subsidized development projects, the city Economic Development Corp announced Thursday.

Charles River Associates landed the contract through a competitive bidding process to carry out a study that city officials say will be the most comprehensive in the nation on the economic impact of wage policies.

But proponents of a living wage mandate believe the study is a delay tactic by officials intent on killing momentum for two City Council bills linking wage mandates to city-funded projects that have each gained a majority of support from city council members.

At the root of their complaint: 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.

And the selection of Charles River added fuel to the fire because two of its leading consultants—David Neumark and David Macpherson—are outspoken critics of wage mandates, though Macpherson is not on the living wage study team.

“The company lists as senior consultants two of the country's most consistent critics of living wage and minimum wage policies,” said Annette Bernhardt, policy co-director at the National Employment Law Project. “We would have hoped the city would have chosen a more balanced research team.”

An EDC spokeswoman said Charles River submitted the best of five proposals. The team's senior economist is Daniel Hamermesh, a professor at the University of Texas at Austin who is a research associate of the National Bureau of Economic Research.

In June, nine council members wrote to EDC President Seth Pinksy expressing “concerns about the manner and spirit in which this study is conducted.” And Comptroller John Liu called it a “million dollar sham.” City officials have promised a balanced study in which the methodology will be open to the public.

A spokeswoman for Charles River Associates did not immediately return a call seeking comment. A consulting team from the firm, which will include academic economists, will catalog and assess wage polices that are already in place in the city and around the country. They will collect information on the city's labor market and wage practices. Before the study is completed in the spring, the firm will evaluate the impact wage requirements would have on the city's economy. An external stakeholder group made up of various business, labor and economic groups in the city will be consulted along the way.

Some supporters of the study in the city's business community argue that living wage proponents are just worried that a rigorous study will prove living wages are not feasible. Others proponents say the position of the administration isn't important and that the facts of the study should speak for themselves.

“We shouldn't be legislating without hard information,” said Kathryn Wylde, president of the Partnership for New York City. “Often these issues are treated as emotional or ideological causes rather than understanding how they will affect business and how they will benefit or damage the city economy.”

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.