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Reduced Wage
City Hall News
Chris Bragg

January 14, 2011
View the Original Article


Unions and business retrench over amendments to living-wage bill

Last year, Council Speaker Christine Quinn shelved the paid-sick-leave bill, citing the potentially devastating effect on small businesses as her primary rationale.

The very similar coalition of people behind the living-wage bill currently before the Council are taking proactive measures to blunt that argument—and to make the bill more appealing to Quinn— as they gear up for their next big fight.

Last week, proponents including RWDSU and Bronx Borough President Ruben Diaz, Jr., agreed to put forward several amendments to the bill, including one that would exempt businesses that gross less than $1 million annually. As with the original legislation, the amendments were drafted with the help of Paul Sonn of the National Employment Law Project.

"Some opponents of paid sick-leave brought up the effect on small business," said Council Member Oliver Koppell, the bill's prime sponsor, "and with these new amendments, small businesses would now not be affected by this legislation."

Notably, the change is intended to carve out only mom-and-pop businesses and not chain stores. The $1 million threshold to qualify as a small business includes not only a store's own revenues, but revenues generated by its parent company or subsidiaries.

To appeal to those who remain skeptics, supporters of the revised bill are also offering amendments that would exclude non-profits and some mid-sized businesses in affordable housing developments.

And Koppell said he would also include a provision that would peg increases in living-wage levels to cost-of-living increases, despite the problems this could cause in attracting those who remain on the fence.

As of now, the legislation would require all employers in developments that receive more than $100,000 in building incentive subsidies from the city to pay workers $10 per hour if the employer pays health care benefits, or $11.50 an hour if they do not.

The bill now has 29 sponsors, with the recent addition of Dan Garodnick, who signed on before the amendments were added. Proponents of the bill have begun pushing strongly for the Council's Contracts Committee to convene a hearing.

Bloomberg is already on record opposing the bill, though the city's Economic Development Corporation has also hired a Boston-based consultant to conduct a $1 million study on the likely impacts of a living-wage bill in New York, the results of which are expected in March.

Spokespeople for both Quinn and Bloomberg declined comment on the new amendments.

Meanwhile, critics are privately complaining of unintended consequences.

For example, they say, small businesses grossing close to $1 million a year might suddenly have an incentive to make less than that amount, creating a perverse economic incentive not to make money. Though the enforcement mechanism of the new provisions remains unclear, the law would likely add extra bureaucratic mandates for small businesses.

Nor do the new provisions address opponents' central argument: that no developer would ever choose to accept city subsidies if future tenants were forced to pay employees the wages mandated in the bill.

Even supporters of the bill say the amendments may be more symbolic than substantive. Richard Lipsky, a lobbyist with the Neighborhood Retail Alliance, said he supported the living-wage bill both in its previous iteration and in its new form.

Lipsky said the amendment carving out small businesses would have little actual effect on the mom-and-pop stores he represents.

"Small businesses are rarely included in these mega-developments anyway," Lipsky said.