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THEPUBLICADVOCATEFORTHECITYOFNEWYORK BilldeBlasioPUBLICADVOCATE

December18,2011 BYMAILANDEMAIL Hon.MayorMichaelR.Bloomberg CityHall NewYork,NY10007 Hon.SpeakerChristineC.Quinn 250Broadway NewYork,NY10007 DearMayorBloombergandSpeakerQuinn, IurgeyoutomoveforwardonpassingandsigningintolawaLivingWagebillforNewYorkCityslarger economicdevelopmentprojects.Ourcityisinthemidstofaprolongedeconomiccrisisthathasbattered themiddleclass,drivendownwagesandledtounacceptablyhighratesofunemployment.Underlying theseproblemsisarisingincomeinequalitythatthreatensoursocialfabricandeconomicfuture.New YorkCitymustmoveaggressivelytoaddressrisingincomeinequalityandIfirmlybelievethattheLiving WagebillrepresentsoneofthemostimmediateandimportantstepsourCitycantaketodothis. ThemostrecentU.S.Censusdatatellsatroublingstory.AlmosthalfofAmericansarelivinginornear poverty.InNewYork,thestoryisnobetter.Whilesomeinthecityhavedonewelloverthelastfour years,medianfamilyincomehasfallenby4percentforthosewithbachelorsdegrees,andevenmore forthosewithout.Between2009and2010,afurther75,000NewYorkersfellbelowthepovertyline. NewYorkCitysworkingclassisstaringinthefaceofaprofoundincomecrisis. Inlightofthesefacts,weshouldviewtheeconomicstateofaffairsinNewYorkCityasbothafailureand acalltoaction.Overthelastdecade,wehavenotdoneenoughtogrowtheprospectsofallNew Yorkers.Governmentmustassertitselfasaforceonthesideofthemiddleclass,usingalltoolsto encourageeconomicactivitythatcreatesjobs,andensurethatworkersexperiencethebenefitsthatare associatedwiththateconomicactivity.ThishasnotbeentheCitysapproachtodateinitscontracting process,pensioninvestments,orintheregulationofbusinesses.Innoplaceisthepotentialforthatrole stronger,andthemissedopportunitygreater,thaninthecaseoftheeconomicdevelopmentsubsidies thattheCitydispensesthroughtheEconomicDevelopmentCorporation. TheCityseconomicdevelopmentagenciesdistributediscretionarysubsidiestocompaniesthatpromise toinvestandgrowinNewYorkCity.TheprocessofgettingeconomicdevelopmentaidfromtheCityis noteasy.Nonetheless,companiesworkwithintheCitysprocessandcompetewitheachothertogain
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THEPUBLICADVOCATEFORTHECITYOFNEWYORK BilldeBlasioPUBLICADVOCATE
theCityssupportbecauseofthepromisethatdoingbusinesshereprovides.Whilewedonothave completecontrolovertheeconomicprospectsofallworkersinourcity,wedohavetherightandthe obligationtofightforthebestpossibleoutcomeforthosewhoworkinCitydevelopmentprojects, fundedwithourtaxdollars.Andbythesametoken,wemustacceptameasureofresponsibilityforall thoseworkingatprojectssubsidizedbytheCitywhoneverthelessearnwagesinsufficienttoprovidefor themselvesandtheirfamilies. Inothercities,aLivingWageisanintegralpartofthestandardsthatcompaniesagreetowhenthey acceptdiscretionarysupportfromlocalgovernment.InLosAngeles,inSanFrancisco,inPittsburgh corporationsthatacceptlargepublicsubsidiesarerequiredtodomorethantheminimumbypayinga LivingWage.Theprovisionsthattheselocalitiesuseforeconomicdevelopmentsubsidieshave numerouspositiveeconomicimpacts.Theyincreasetheincomeofworkersintheprojectsthereby increasingthemultipliereffectforthelocaleconomy;theyreduceemployeeturnoverresultinginhigher productivity;andtheyensurethatworkersinCityfundedprojectsarelessdependentonsocialservices andposefewerindirectimpactsontheirlocalbudgets. InthemonthssinceCityCouncilMembersKoppellandPalmaintroducedtheirLivingWagebill leadershipforwhichtheydeserveenormouscredittherehasbeenheateddebate.Detractorshave madenumerousclaimsofthenegativeoutcomesthatwouldoccuriftheCityadoptedaLivingWage. Uponcloseandthoughtfulexamination,Iviewmanyoftheseclaimsskeptically.Somehaveclaimedthat aLivingWagebillwouldinhibitfuturedevelopment,citingtheCitysexperiencewiththeKingsbridge Armoryasanexample.Iamthefirsttosaythatitwasatragedynegotiationswerenotabletoyielda projectattheKingsbridgeArmory.Idonotsubscribetothenotionthatnoprojectsarebetterthan imperfectprojects.ButwhatkilledtheKingsbridgeArmoryprojectwasbrinksmanshipinthenegotiating processnottheprincipleofaLivingWage. Thequestionthen,isoneoftheviabilityofprojectswithLivingWagejobs.Isitpossibletopursuelarge projectswithwagemandates?WhenwelookatjurisdictionswithLivingWagerequirements,the answerisaresoundingyes.NYCEDCscounterpartinLosAngeles,theLACRA,operateswithLiving Wagerequirementsforitsprojects.Underthoserequirements,theCityhasover144projectswith LivingWagecomponents.Thoseprojectsrepresent$400millioninLACRAspending,andhaveresulted in$8billioninprivateinvestment.InLosAngeles,theCityanditsdevelopmentagencyhavemanagedto figureouthowtoleveragecityassetstodevelopwhileensuringaLivingWage. ItisclearlypossibleforabigcitytoadoptaLivingWagestandardforeconomicdevelopmentandstill createjobsandeconomicactivity.ThatisnottosaythattheLivingWagebillthathasbeenproposedis withoutroomforimprovement.Iamheartenedbythechangesthathavealreadyhappenedtomake clearthatthebillsintentisnottocoverasofrightsubsidies,andwithadditionalamendmentsthat excludethenonprofitandaffordablehousingsectors.Inaddition,Irecommendincreasingtheamount ofrevenueabusinessmustearntotriggertheLivingWagerequirementinordertoexcludeallsmall businessesreceivingdevelopmentaid.Iurgethesechangesbecause,atitscore,thisbillsprinciple demandsoursupport.
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THEPUBLICADVOCATEFORTHECITYOFNEWYORK BilldeBlasioPUBLICADVOCATE
Weshouldleavenotoolofgovernmentunusedinthecurrenteconomicclimate.WhereCitybusiness, contractsandassetscanbeleveragedtoincreaseeconomicactivity,improvingthequalityandquantity ofjobsinourcity,wemustactaggressively.ThedesperatestateofNewYorkCitysmiddleclass,the experienceofotherlocalities,andimprovementsmadetothebillinrecentmonthshavecollectively convincedmethatthetimehascometopassaLivingWagebillthatusesthepowerofoureconomic developmentdollarstoreduceincomeinequality.Iurgeyoutogivethiseffortyourfullsupport. Sincerely, BilldeBlasio PublicAdvocatefortheCityofNewYork cc:CouncilMemberOliverKoppell,CouncilMemberAnnabelPalma

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