New Report Addresses Mayor Bloomberg’s Fears About New York City’s Wage Standards Bill

Our guest blogger is Karla Walter, Senior Policy Analyst with the American Worker Project at the Center for American Progress Action Fund.

New York City residents are gearing up to support a bill ensuring that when businesses get taxpayer dollars to invest in the city, they give back good jobs to the community. New York City is home to some of the nation’s largest development deals, and the City Council is considering the Good Jobs Bill, which would ensure that when developers receive those city subsidies, building services workers (such as security guards, janitors, and maintenance workers) at those sites are paid family-supporting wages.

The bill has the backing of more than 30 council members, but Mayor Bloomberg is withholding his support and his administration is claiming that wage standards could hurt the city’s economy:

“It’s quite broad and it affects basically everything the city does,” said Tokumbo Shobowale, chief of staff to Deputy Mayor for Economic Development Bob Lieber. “Rather than do harm, we prefer the deliberative approach,” he added. The administration would rather the City Council hold off on any wage requirement mandate until it conducts a living wage study, which it is scheduled to complete in 2011.

A new report from the Center for American Progress Action Fund’s American Worker Project refutes these claims and gives fact-based ammunition to supporters of wage standards. In the largest study of its kind ever conducted — looking at more than 20 years of data across 31 cities — the report finds that business assistance wage standards have no negative impact on employment levels:

Our estimates indicate that passage of a business assistance living wage law has no measurable effect on citywide employment. Employment levels are unaffected in low-wage industries as is employment in industries likely to be targets of economic development subsidies and in firms that are sensitive to the perceived business climate of a city. This suggests that business assistance living wage laws are unlikely to have direct, direct spillover, or indirect effects on employment levels. These findings discredit the primary arguments used by opponents of business assistance living wage laws that these laws are harmful to employment in direct and indirect ways.

New York is not alone in this important public debate on whether to link job creation programs with job quality standards. State and local governments spend $50 billion every year to entice private businesses to invest in their communities, financing developments such as sports arenas, high-tech manufacturing zones and big-box retail. The idea is that this public investment will spark job growth and build a sustainable local economy. But these public funds often help create low-quality jobs that pay poverty wages and provide no benefits.


Cities across the country are recognizing this problem and adopting wage standards to make sure that when businesses receive subsidies, they pay family-supporting wages. Wage standards proponents are right: job quality and job quantity can and should go hand in hand.