Blog Post: NYC Living Wage Debate Boils Over, Into the Streets and before City Council
It’s budget season in New York City, when community groups and labor unions usually take to the streets to protest proposed budgets and this year proposals including teacher layoffs and social service cuts was a serious call to action. But marchers also had an added demand: a living wage at subsidized companies. May 12 was planned as a day of action; it also was the day the New York City Council Committee on Contracts held a public hearing on the proposed “Fair Wages for New Yorkers Act”. The bill would require firms that receive certain economic development subsidies to pay a “Living Wage” of $10.00 an hour or $11.50 an hour if no benefits are provided.
Mayor Michael Bloomberg opposes the bill and the Speaker of the City Council Christine Quinn is undecided but the momentum is building with 30 co-sponsors (out of 51 members). The bill excludes many small businesses and only covers some subsidy programs. Despite the bill’s modest coverage and requirements, the Bloomberg Administration and other opponents deployed heavy artillery. The city released a summary (but only a summary, Bloomberg officials report that hundreds of pages and supporting tables won’t be released until the summer) of an impact study it had commissioned. The $1 million study, written by Charles River Associates (CRA) and funded by the New York City Economic Development Corporation, concludes that the law would prevent the creation of at least 33,000 jobs over 20 years.
The Fiscal Policy Institute, the National Employment Law Project and Good Jobs New York analyzed the summary and raised numerous questions about its scope and methodology. They issued a public statement, joined by seven academic economists, that cited “a series of fundamental errors in methodology and analysis” that “render the study fundamentally flawed.”
Among the concerns:
- The study mainly focuses on NYC’s most costly and a commonly used subsidy program, the Industrial Development Abatement Program—but ICAP is state-regulated and would not be covered under the proposed bill!
- The lead author of the report, Dr. David Neumark, has a history of writing reports that surmise Living Wage policies are ineffective, and his methodology was rebutted last year by a group of economists.
- The Charles River Associates team failed to interview economic development officials or employers in dozens of cities with economic development Job Quality Standards. Instead, they interviewed industry leaders in real estate development and at financial institutions anonymously, who obviously have a self-interest in existing subsidy programs
Read the full critique of the CRA study.
GJNY takes a close look at the proposed subsidy package--worth nearly $130 million--for Fresh Direct to relocate to the South Bronx. In early 2012, Fresh Direct started a bidding war between New York City and New Jersey officials when it threatened to leave its current home in Long Island City, Queens. Learn more about the subsidies, job promises and the efforts of residents to block the on-line grocery retailer's move to their waterfront.
Good Jobs New York's analysis and recommendations regarding federal state and local resources used in the post-Hurricane Sandy rebuilding.
Our database contains information on thousands of companies that received economic development subsidies in New York City.
Learn about major corporate giveaways to the financial industry, sports facilities and retail developments in New York City.
- The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation by Greg LeRoy, executive director of Good Jobs First
- Guide to Corporate Research by The Corporate Research Project
- Glossary of Terms by Good Jobs First