On March 29, New York City Council Speaker Christine Quinn chose to exempt the Hudson Yards development on Manhattan’s far West Side from the proposed living wage bill, The New York Times reported.
This isn’t the first compromise that’s been made to the legislation this year.
The living wage bill requires developers who receive city tax subsidies to pay their employees at least $10 per hour with benefits, or $11.50 without benefits. The legislation would have even extended to all employees working in city subsidized developments, but in January, Quinn reached a deal with Mayor Michael Bloomberg, who was against living wage entirely. Under the deal, the revised legislation exempts tenants leasing space in these developments from the same wage requirement, since the they are not directly receiving the subsidies.
The Hudson Yards project, which sits in Quinn’s district, is slowly transforming the last underdeveloped part of Manhattan into a range of skyscrapers. Hudson Yards has been a glimmer in the mayor’s eye since 2005, when the city rezoned the area from 28th to 42nd Street, between Eighth and Twelfth avenues. After a series of development misfires, the city finally locked down several real estate firms to construct 16 skyscrapers.
The largest developer in the project is real estate giant Related Companies, which in a press release last year said, “Over 20,000 construction jobs will be generated by the construction of the Coach Building. Over 100,000 construction jobs will be generated by development of the Eastern Railyard (including over 80,000 direct jobs) and over 10,000 permanent new jobs will be generated upon completion of both yards, which will also serve as home to 30,000 office workers.”
Because Hudson yards is an ongoing project that is still in its infancy, it’s unclear how many employees would have been entitled to the living wage under the bill.
Related is one of the largest and most politically connected developers in the city. In 2009, the company walked away from plans to transform the Kingsbridge Armory into a retail complex, after City Councilmembers overrode Bloomberg’s veto of a law requiring Kingsbridge retailers to pay their employees a living wage.
Related Companies’ employees have donated $34,200 to likely 2013 mayoral candidate Quinn’s campaign, reported The New York Times.
Is it a battle between jobs vs. wages?
The first living wage bill — guaranteeing so-called “living wages” for people employed by city contractors that receive subsidies created by taxpayer dollars — was passed in Baltimore in 1994. Since then, over 120 municipalities have passed similar legislation mandating various levels of pay, according to the National Employment Law Project.
Click Map for Information on Living Wage Laws in U.S. Cities:
In 2010, the Center for American Progress released a study on living wage laws in 15 cities. Click on the icons to see how the laws compare.
Pennsylvania State University has a handy tool that compares living wage mandates to a detailed cost of living breakdown.
Mayor Michael Bloomberg and many of his supporters in the real estate industry have long opposed the living wage bill, considering it unfriendly to the business community and detrimental to job creation. In May 2011, the New York City Economic Development Corporation paid a Boston company $1 million, using taxpayer money, to conduct a study which found that between 6,000 and 13,000 New Yorkers would lose their jobs as a result of a living wage mandate. However, a 2010 study by the Center for American Progress found that 15 cities that had implemented living wage laws, including Los Angeles, Philadelphia and San Francisco, “had the same levels of employment growth” as cities that did not.
The mayor agreed to the compromise in January, because it would not cover employees of businesses that are not directly receiving tax subsidies from the city, such as most retail workers.
Prior to the agreement on living wage, Bloomberg endorsed a proposal from Assembly Speaker Sheldon Silver (D) to raise the state’s minimum wage, which Councilmember Anabel Palma (D) said was a poor substitute for wage gains created at the local level. According the U.S. Department of Labor, 18 states and the District of Columbia mandate minimum wages higher than the federal requirements, three states and Puerto Rico have special carve-outs that actually allow certain employees to be paid less than the federal minimum wage, and 22 states require the same minimum wage as the federal government.
The living wage legislation also impacts big developments like Willets Point, Coney Island and Atlantic Yards for the first ten years after they receive subsidies, and provides an exemption for manufacturing companies with a profit less than $5 million per year, or which receive less than $1 million from the city.
Who is actually covered by the living wage bill?
Once construction workers complete a new development, the developer’s employees take on the operations and stand to benefit from the living wage bill. “For example, warehouse and distribution center workers, on-site cafeteria and mailroom workers, along with workers at arenas, stadiums and other projects that receive subsidies,” Stuart Applebaum, president of the Retail, Wholesale and Department Store Union (RWDSU), told the Village Voice.
The RWDSU press office did not return a comment to MetroFocus at press time.
New York Times columnist Michael Powell tweeted “Great Victory? Meh. Living Wage compromise applies to, perhaps 500 people? So war ends w the sound of pop gun…Living wage compromise in nyc, w just 500 jobs, begs ? That effort better put into minimum wage battles?”
“Ms. Quinn said the measure would include about 80 percent of the 700 or so workers per year the original bill would have covered,” reported Crain’s.
Yet, Applebaum defended the altered bill, telling the Voice, “We secured a landmark three-part agreement — a bill, a policy framework and a pilot program — that goes further than what any other city in the country has done on living wage for subsidized economic development.” That entails a $10 million program to incentivize living wage jobs, and “a city policy that employees on future subsidized development projects, including retail employees, should be paid a living wage,” according to Applebaum.
A trifecta of employee legislation
Living wage is just one of three bills related to income inequality currently in City Council. Last Wednesday, the Council approved a bill that would require building owners to pay a “prevailing wage” to building cleaners and security guards in buildings that receive subsidies. Bloomberg called it “terrible legislation.” Also under discussion is a bill that would require business owners to grant paid sick days. Currently, about 1 million New York City employees do not have guaranteed paid sick days. Quinn has said the bill could hurt small businesses.