Wage Wars: $10 an Hour Emerges as Make-or-Break for New Development

armory Wage Wars: $10 an Hour Emerges as Make or Break for New DevelopmentBy all measures, a press conference early Monday afternoon on the steps of City Hall appeared to be a victory celebration.

The City Council had just voted, 45-1, to block a planned new mall at the Bronx’s Kingsbridge Armory, as the developer, the Related Companies, balked at requiring its retail tenants to pay wages of at least $10 an hour—$11.50 without benefits—a so-called living wage. And while the elected officials on hand gave a disclaimer that the event was not actually a “victory”—there now will be no wages of any sort at the armory, after all—they repeatedly boasted of a job well done, with the crowd of union members and activists erupting in cheers and applause as they pumped signs reading “We want living wages.”

“We can no longer support development that only ensures profits for barons while perpetuating poverty for people of the Bronx,” Ruben Diaz Jr., the Bronx borough president who led the fight for a mandatory living wage, bellowed. “That notion of any job is better than no job no longer applies.”

The bar for development in New York City just got higher.

With a resounding triumph behind them, the union that drove much of the living-wage push, the Retail, Wholesale and Department Store Union, and elected officials are already casting their eyes further out on the horizon. From the ashes of Kingsbridge, they now expect that the living-wage matter will rise up to appear in future individual developments as they come before the Council, and they will press for a citywide law requiring a living wage for most any project that receives city subsidy.

“As far as we’re concerned, the battle for middle-class jobs for New Yorkers has only just begun,” Stuart Appelbaum, president of the RWDSU, said.

This new terrain—and the extremely rare defeat of a development project—points to the rising influence of labor in the City Council, as city and state politics are reshaped with a louder, union-backed voice coming from elected officials. On top of the push for retail workers’ wages, the powerful building service workers union, SEIU 32BJ, is pushing a bill that would grant similarly high “prevailing” wages to building employees in subsidized projects citywide. And on the state level, a recent draft of a bill from Governor Paterson’s office called for wages of $19 an hour for any development receiving subsidies through certain state authorities, a measure viewed as a demonstration of support for labor.

The justification for living wages, by the telling of union leaders and elected officials, runs like this: If a developer is receiving public-sector subsidies, it should pay forward to the workers some of the government’s goodwill. And thanks to the Kingsbridge fight, numerous council members are now on the record demanding that a developer receiving city subsidies—Related, in this case—has the obligation to require living wages at its development. Given that the Council voted Related down because it did not meet that demand, how does it now turn to other developers and allow them to build without the same mandate?

In remarks at the vote, multiple council members used rhetoric to suggest such actions would continue. Charles Barron said he hoped the vote would be “precedent-setting,” and John Liu, the city comptroller–elect, said it “set a standard for accountability.”

Taking this to a citywide level, last week a bill was introduced by Bronx Councilman Oliver Koppell that would require living wages for workers in nearly every development that receives city subsidy or tax breaks (anything over $10,000). Although the bill expires at the end of the year, Mr. Koppel said he would reintroduce it next year, and expected to press the issue.