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Give New Yorkers a living wage: $10 per hour is only fair for subsidized development projects
New York Daily News
Brad Lander and Paul Sonn

May 20, 2011
View the Original Article

New York City spends billions of taxpayer dollars annually to subsidize new shopping centers, office buildings, stadiums and other projects. These create jobs, but often not very good ones: Workers at retail stores, concession stands and cafeterias often earn as little as $8 an hour, without benefits. They scrape by, struggling to raise families.

A City Council proposal would ensure that jobs created via taxpayer-subsidized development projects pay a living wage of at least $10 an hour. If developers want taxpayer subsidies, they should offer decent wages.

We already know that living wage policies can create good jobs without hurting the economy. Cities like Los Angeles and San Francisco have made living wages on subsidized projects routine. On certain local developments like Willets Point and Coney Island, New York has begun to show that it can do the same.

Yet the Bloomberg administration just spent $1 million to hire the nation's leading anti-minimum wage economist, David Neumark, whose methodologies have been roundly discredited, to prove that asking businesses seeking tax breaks to pay more than poverty-level wages is a bad idea. Don't be fooled by the price tag - the study is a sham. For starters, the study bases much of its analysis on a single subsidy program whose developments - mostly small projects in the outer boroughs - aren't even covered by the bill. Inexplicably, the study fails to focus on the large mixed-use development projects that receive the lion's share of the city's subsidies, even though that's where the debate is focused.

The study claims to examine job growth patterns in 39 cities that supposedly have policies similar to the New York proposal. Never mind that, actually, fewer than a dozen cities have extended living wage policies to their development programs on any scale. The problem is that it's impossible to measure the impact of living wage standards on job growth in these cities from the kind of general employment data the study uses. These policies affect too small a slice of local economies to be measured in that fashion.

But the most glaring omission is the study's failure to examine the actual experiences of cities like Los Angeles, San Francisco and New York itself in extending wage standards to major projects. In Los Angeles, virtually no major subsidized development project goes forward without a living wage standard, from the Staples Center to hotel development projects. The researchers evidently didn't bother talking to developers, employers and city agencies about how these policies are playing out. If they had, they would have heard that the living wage is ensuring that development projects generate quality jobs and has not slowed growth.

Let's set aside the fact that the Bloomberg administration wasted taxpayer money on a flawed study. The question is, why can't New York do what Los Angeles and San Francisco have? The answer is we can - indeed, we must.

New York's economy has become an hourglass: high-paying jobs at the top, low-wage service jobs bulking up the bottom, and a middle class that has been increasingly eroded. According to our state's Labor Department, seven of the 10 occupations that will add the most jobs in the city in coming years pay low wages. Today's minimum wage is just $7.25 an hour - good luck raising a family in New York on that.

The shift in our labor market toward low-wage jobs is also holding our economy back: A thriving middle class that can afford to spend money at local businesses is essential for sustaining growth.

The City Council's living wage bill takes that formula to heart: good jobs at good wages for the workers who make the city run. As we use taxpayer funds to build our tax base with new projects, there's no reason why we can't build up New York City's economy as well.

Lander is a member of the City Council. Sonn is legal co-director of the National Employment Law Project.