Living Wage, Again

Posted by Doug Turetsky, November 30, 2011

Amid the uproar during the past few weeks over the proposed living wage law there’s one important point that you might have missed: the city already has a living-wage law. Its rules cover thousands of workers employed under more than $1 billion worth of contracts with the city.

In fact, New York City had one of the first living-wage laws in the country, though the city’s first bill covered just a couple thousand workers. Passed in 1996, over the veto of then-Mayor Rudolph Giuliani, the legislation was championed by advocacy organizations such as the Industrial Areas Foundation as well as local unions. It required that private firms contracting with the city to provide food services, security guards, cleaners, and temporary office workers pay their employees a living wage that ranged at the time from about $7.25 to $12 an hour.

The number and type of workers covered by the city’s living-wage rules expanded in 2002 when Mayor Michael Bloomberg signed a law that extended living-wage provisions to home health care and child care workers whose agencies had contracts with the city. The Brennan Center at New York University estimated that under the new requirements the pay of 50,000 home health care workers would rise immediately and later the pay of up to 9,000 child care workers. Shortly after the law went into effect, Steve Malanga wrote ruefully in City Journal, “Thanks to Mayor Bloomberg, New York will now have the largest number of workers covered by any living-wage law in the nation.” For a complete list of covered workers and wage rates, click here.

The proposed living-wage bill now garnering so much attention moves away from a focus on city contracts for services and instead aims at economic development projects. The bill would cover all workers in projects that receive certain public subsidies worth $1 million or more. But it would exempt from its wage rules businesses with revenues of less than $5 million a year, all manufacturing firms, and nonprofits. IBO’s George Sweeting submitted testimony to last week’s City Council hearing on the proposed bill in which he said about six or seven projects a year would be affected by the proposed rules, based on the economic development projects subsidized by the city in 2002-2008.

That’s a small number compared with the 437 contracts the city signed in fiscal year 2011 that are subject to the existing living-wage law. These contracts were valued at $533 million, according to an annual report by the Mayor’s Office of Contract Services. Over the past four fiscal years, the city has signed nearly 1,100 contracts worth more than $1.5 billion that must comply with living-wage rules.

Too bad so much of the debate that continues to simmer on the new living-wage bill largely ignores the fact that the city already has a fairly significant commitment to living-wage provisions. Maybe the $1 million shelled out by the city’s Economic Development Corporation for a study of the potential effects of a living-wage law would have benefitted by looking at what’s happened under the rules that already exist here.

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