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Andrew Wilkes

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If You Take Our Money, Pay Us Fairly

Posted: 11/18/11 12:53 PM ET

The Fair Wages for New Yorkers Act should be a local law in New York City. The policy objective is straightforward: ensure that large-scale commercial developments receiving city subsidies -- I have in mind projects like the Gateway Shopping Center, which will receive approximately $140 million over the life of its lease -- pay their employees $10 an hour with benefits or $11.50 without benefits. This mandate applies to firms accepting municipal assistance equal to or above $1 million; exemptions exist for manufacturers and businesses making less than $5 million dollars in revenue. If passed, the bill will lift the income floor on affected developments from the federal minimum wage of $7.25 to $10 and reduce the risk of financial ruin induced by sickness.

For many, supporting fair wages for New Yorkers is a matter of faith as well as public policy. Pope Leo XIII's Rerum Novarum (On the Condition of Labor), for instance, contends that "among the most important duties of employers, the principal one is to give employees what is due them." The prophet Isaiah also comes to mind: "my chosen shall long enjoy the work of their hands. They shall not labor in vain..." (65.22-23). Papal encyclicals and prophetic passages are precepts; they do not explicitly suggest what a person is due in terms of wages. They do, however, provide a vision of justice -- a sense that workers should reap where they have sown -- that undergirds religious calls for economic equity.

Developers that accept substantial municipal investment have a civic obligation, which should be embedded in law, to pay workers a living wage. A hypothetical may help flesh out this claim. Imagine that Mass Retail Inc., without receiving large amounts of public subsidy, builds a shopping center based on the assumption that a profitable return on its investment is probable. As a private firm attracting private tenants, Mass Retail Inc. and its tenants should pay a living wage but ought not to be required to do so by local law. A federal law mandating a living wage would be the more appropriate channel under that scenario. If, however, the City of New York, which exercises a fiduciary responsibility on behalf of its taxpayers, contributes subsidy equal to or above $1 million dollars to Mass Retail Inc., then the civic obligation of Mass Retail Inc. and its tenants to pay a living wage should be enforced by the city.

New York City possesses some of most valuable real estate in the world, a highly educated and skilled workforce, an enviable transportation infrastructure of airports, bridges, roads,and more than 520 miles of waterfront. Mandating that businesses receiving at least $1 million in subsidy pay workers $10 with benefits or $11.50 without benefits will not make the city unattractive commercially, nor will it cancel the city's aforementioned competitive advantages relative to other cities. Well-capitalized developers accept that New York City real estate is both high-cost and high-value. They understand that perennial increases in land-related expenses are the cost of doing business in the Big Apple. It's time for them to adjust to paying workers a living wage as a condition of accepting taxpayer money for large-scale commercial development in the city. If you take our money, pay us fairly.

 

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