At a time when new jobs are needed to help resurrect the local economy, business organizations say another proposed City Council bill could not only stunt growth but also set it back.
The bill in question, Intro 251-A, would require businesses that receive government financial assistance to pay employees a “living wage” equal to $11.50 per hour, effectively raising minimum wage for these employees by $4.25.
“It’s something else that might push people over to New Jersey or another state,” said Linda Baran, president and CEO of the Staten Island Chamber of Commerce. “In a time when we’re looking for jobs in the borough, it’s really bad timing for them to propose any mandates.”
Opponents of the proposal say it would stifle job growth, discourage employers from expanding or moving into the city and damage the city’s manufacturing sector and affordable housing industry, while imposing “significant” administrative burdens on large and small businesses throughout the city.
If passed, the bill would affect recipients of government financial assistance for job creation and economic development, including the recipients’ tenants, sub-tenants, fee holders, contractors or sub-contractors. If a property owner received government financial assistance, then, the building’s landscapers, doormen, window washers and retail stores would be required to pay the living wage to all their employees – both part- and full-time, temporary, seasonal and permanent.
“This proposal would harm existing businesses and discourage new business development all across our borough,” Baran said. “The bill’s job-killing wage mandates would discourage smaller business owners and retail shops from hiring new employees and put burdensome restrictions on our businesses of all sizes. Simply put, this bill is bad for the Staten Island economy.”
Backers of the bill say it is necessary to curb a growing problem in New York City. According to a recent National Employment Law Project report, there are about 317,000 low-wage workers in the city, and about one in five are paid less than the required minimum wage. The report, which surveyed 1,432 low-wage city workers, found that more than half of the workers are underpaid by more than $1 per hour, and approximately 25 percent are denied overtime.
“A substantial body of evidence shows that living wage policies create good jobs without hurting the economy,” said Paul Sonn of the National Employment Law Project. “The key question facing the City Council is why New York can’t do what Los Angeles and San Francisco have been doing for years: focusing tax-payer subsidies for job creation on businesses that pledge to create quality jobs for local residents.”
As defined by the proposal, financial assistance would include grants, bond financing, tax abatements and exemptions, tax increment financing, filing fee waivers, energy cost reductions and environmental remediation costs.
In addition to paying to the living wage, affected businesses would be required to keep stringent records of their employees as well as their contractors for at least 30 years, which opponents say will cause a disincentive to create jobs and lead to higher unemployment.
“This bill will prevent, or at the least delay, development projects on Staten Island and New York City as a whole,” said R. Randy Lee, chairman of the Building Industry Association of New York City. “Who would apply for a city subsidy when the subsidy will actually increase the cost of the project?”
Baran said she believes the bill’s 29 co-sponsors all had good intentions when they drafted the bill, but she believes they need to be “realistic.” Minimum wage laws are in place to protect employees, and there are other city agencies that can address the problems this bill is trying to solve, she said.
Opponents of the proposal let their voice be heard at a City Council hearing a few weeks ago, hoping to convince members that there are fairer ways to accomplish the bill’s goals.
But whether that will be enough to make them change their mind – or whether a veto from Mayor Michael Bloomberg will be necessary – remains to be seen.
For Baran, what disturbs her the most has nothing to do with the bill itself. She wishes members of City Council would have reached out to the business community before releasing the bill publicly, so they could work out potential problems that could have a “huge impact” on business.
“That’s the precedent we want to set,” she said. “We don’t want things to come out of the blue and then be fighting on them.”