Elected Officials, City, Clash Over Living Wage Study-to-Be

Tensions are rising over living wage. The Bloomberg administration’s plan to study the effects of living wage laws came under

Tensions are rising over living wage.

The Bloomberg administration’s plan to study the effects of living wage laws came under attack today from a set of Council members and City Comptroller John Liu, who called the effort a “sham.”

The issue came under fire as the city-controlled Industrial Development Authority authorized $1 million to fund the study. With two bills brewing in the Council on living and prevailing wage issues, the Bloomberg administration is planning to name a consultancy to create a report on the topic, determining the effects that laws that increase the minimum wage for certain jobs and projects would have in the city.

The main issue cited by the elected officials today was the process: the city is planning what it terms an independent study, although it would control the flow of information and will presumably have influence on the recommendations (as is common for government-sponsored studies). The city has set up an advisory committee that includes representatives from groups and unions on all sides of the issue, although the specific charge and structure of the committee is not well defined, or clear to all its members.

Nine Council members wrote a letter to Economic Development Corporation president Seth Pinsky asking him to take a more objective approach, given that the Bloomberg administration has repeatedly voiced opposition to many living wage requirements.

“I welcome informative data that helps us make decisions, but given that the city has already indicated that it is skeptical of this policy, how can we be confident that the study will be objective and independent?” Councilman Brad Lander said today via phone. (The full letter suggests a structure with more neutral experts)

Mr. Liu was a bit less reserved, saying in a statement that the EDC is “intent on squandering a million dollars on this charade of a study.”

More from his statement:

“It is important to study this issue, but not this way. … [M]y opposition to this million-dollar sham is based entirely on the question of its merit – or lack thereof.”

A spokesman for the EDC, David Lombino, defended the study, noting in a statement that there would be an open dialogue during the study:

“We’re undertaking the most comprehensive study on the effect of living wage that has ever been undertaken anywhere in the country and we have a balanced group of external stakeholders in place that will have an opportunity to shape and contribute to it. Our methodology will be public, and if individuals disagree with the results they will, of course, have an opportunity to voice their concerns.”

The debate does have a hint of political jockeying all around.

The Bloomberg administration clearly would rather see its study come out before the Council passes any wage bills, and should it indeed recommend against living wage requirements, it would help give the administration leverage in negotiations with the Council. (One of the bills is pushed by SEIU 32BJ and would require prevailing wage for building service workers on subsidized projects; the other would require at least $10 an hour for all workers including retail in buildings receiving subsidy).

In contrast, Mr. Liu and the Council members would probably rather see the bills passed sooner rather than later, particularly if the study will not come out in their favor, but it’s tough to stake out a position that is contrary to waiting for better data.

Indeed, the living wage issue is sorely lacking in credible data and information on the economic effects. Both sides–the unions and the pro-business and real estate crowd–routinely make sweeping generalizations that respectively suggest there is a negligible economic effect, or development would come to an absolute halt.

For instance, proponents of a living wage on retail do not show in their promotional materials a single example of a new development receiving subsidies for which there was a living wage requirement for 100 percent of retailers. Indeed, while living wage proponents often point to Los Angeles as a model, the Los Angeles Community Redevelopment Agency said that that there has not been one project that it administers that has gone ahead with a living wage requirement on all retail employees (a few have negotiated that at least 70 percent of the workers receive living wage, while others with broader requirements stalled amid the recession).

This is not to say it is impossible to build large retail developments with wage requirements; the point is that good data–not funded by interested supporters or opponents–is hard to come by. 

ebrown@observer.com Elected Officials, City, Clash Over Living Wage Study-to-Be