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Chambers in New York Target Living Wage Bill

March 17, 2011
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The business coalition that killed paid sick-days legislation last year has now set its sights on defeating a proposal that would require jobs resulting from city-subsidized projects to pay at least $10 an hour, plus benefits.

The 5 Boro Chamber Alliance, which formed in 2009 to fight the sick days measure, is meeting next week to orchestrate opposition to the Fair Wages for New Yorkers Act, which would require employers at projects that received $100,000 or more in subsidies to pay a living wage.

Plans are in the works to request meetings with City Council Speaker Christine Quinn, who has yet to take a position on the measure, and the bill's sponsors to outline small business' stance. The group convinced Quinn last year that the sick days bill would have devastated small businesses.

“We just had paid sick days, now it's living wage,” said Nancy Ploeger, president of the Manhattan Chamber of Commerce, which is a member of the alliance. “They just keep trying to put burdens on the backs of small business.”

The planned opposition comes even as a revised version of the bill, obtained by Crain's, carves out small businesses with revenues less than $1 million per year, as proponents had earlier promised.

“Small businesses have already been exempted from the bill,” said Councilman Oliver Koppell, its lead sponsor. “The tenants of subsidized projects will be large businesses. There is nothing for anyone to fear here.”

But Ploeger contends the $1 million or less revenue threshold is an arbitrary one that will prevent many small firms from moving into subsidized locations. “You can't always go by revenue,” she said. “$1 million doesn't mean it's a big business.”

A source with direct knowledge of how the $1 million threshold was determined said it was loosely based on the federal Fair Labor Standards Act, which exempts many businesses with $500,000 in revenue or less.

Ploeger said the group's opposition to the bill wasn't just based on the terms of the small business carve out. If the bill passes, she said it could make it easier for government to institute prevailing wage mandates and intervene in other ways that could make life tougher for businesses. “It's not just this one issue,” she added.

“It's odd that opponents object to the law because they fear government intervention,” said John Petro, an urban policy analyst at the liberal public Drum Major Institute think tank. “We're talking about government-led economic development projects here, the very definition of government intervention.”

The bill, which was introduced at the request of Bronx Borough President Ruben Diaz Jr., has 29 sponsors, five short of the supermajority needed to override a certain veto by Mayor Michael Bloomberg.

Bloomberg administration officials have consistently argued that tying wage requirements to subsidies would squash development. The city's Economic Development Corp. retained a Boston-based consulting firm to conduct a $1 million study on the feasibility of wage mandates. That study is expected to be released in the next few weeks, before the City Council holds a hearing on the bill in April.

In addition to formulating opposition to the living wage bill, members of the alliance will discuss development of a proactive agenda so that the group is not always reacting to bills seen as harmful to business, Ploeger said.  

Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

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