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City Study Says 'Living Wage' Bill Would Kill Jobs

By DNAinfo Staff on May 10, 2011 11:38am

Clergy members rallied in favor of a living wage bill last year.
Clergy members rallied in favor of a living wage bill last year.
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DNAinfo/Jill Colvin

By Jill Colvin

DNAinfo Reporter/Producer

MANHATTAN — Proposed legislation that would require developers who receive large city grants to pay workers a so-called "living wage" would kill jobs and stymie economic development, according to a city-sponsored study released Monday.

Under the bill, set to be debated at a City Council hearing Thursday, projects that receive more than $100,000 in benefits would be forced to pay their workers at least $10 an hour, plus benefits.

Proponents argue the city should not be subsidizing projects that pay poverty-level wages.

But according to the summary of a $1 million study paid for by the city's Economic Development Corporation, the plan, which is strongly opposed by the mayor, would drive up costs, derailing 24 percent of office projects in Manhattan and costing tens of thousands of jobs and billions in investment over the next 20 years.

It argues that, in cities that have passed similar wage laws, while some low-skilled workers' earnings have risen, on average, that increase is "negligible" because other workers suffer in return.

While those who receive the "living" wage would make an extra $1.67 an hour, it predicts unemployment among the lowest paid in the city would jump by 5.5 percent. Minimum wage in New York is $7.25.

"The study is clear: the legislation would result in major job losses at all income levels and particularly among low-income New Yorkers," Andrew Brent, a spokesman for the mayor, said in a statement, adding that the legislation would hurt small businesses as well as affordable housing, reducing overall investment in the city by approximately $7 billion.

"The goal of increasing wages among New Yorkers of course is a good one, but this type of approach in other cities hasn't just failed, it's done so with severe consequences for job-seekers and businesses," he said.

But those who support the bill quickly came out against the study and questioning its reliability.

"The EDC's claim that a living wage kills jobs shows just how distorted the agency’s operations have become," City Comptroller John Liu said in a statement, arguing that some jobs are worth losing for those that pay a decent wage.

"The claim of job losses is rhetoric at its worst," he said.

Living Wage NYC, a coalition that has been lobbying for the bill, also blasted the study in a statement released Monday.

"We knew the findings of this rigged study long before it was released. That's because the Bloomberg administration has openly opposed living wage standards," they said.

"The City Council has a responsibility to act on behalf of all New Yorkers to ensure that when taxpayer dollars are given to private developers the resulting jobs pay a living wage."

City Council Speaker Christine Quinn has not yet revealed her position on the bill.

Dozens of cities have implemented living wage law, including Los Angeles and San Francisco.