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Aldermen Hike “Living Wage”

by Thomas MacMillan | Jun 8, 2011 7:59 am

(10) Comments | Commenting has been closed | E-mail the Author

Posted to: City Hall

Thomas MacMillan Photo It wasn’t the law he initially hoped to pass, but Alderman Mike Jones succeeded in raising the city’s living wage up to 133 percent of the federal poverty level.

Aldermen voted Monday night to pass the living wage ordinance amendment he championed for much of the past year.

The law will not only raise the minimum wage for city workers and contractors from $12.50 to $14.67 dollars an hour, it includes strengthened provisions to go after violators, and it closes a loophole that allowed subcontractors to avoid paying the wage.

A more ambitious form of the bill met stiff resistance when it was proposed last year. The mayor and business advocates said the city couldn’t afford it.

A compromise version made it out of committee in April. The less ambitious version exempts city-funded jobs at non-profit organizations and narrows the scope of employees covered: They must work 12 months out of the year, exempting school workers, a key target of the original legislation, and at least 16 hours a week. And if they’re working for the city under contract, that contract must exceed $100,000.

The cost of city contracts is not expected to rise under the new ordinance, Jones told his colleagues Monday night.

The law is expected to cost the city $187,000, with the inclusion of Board of Education employees, said Hill Alderman Jorge Perez, chair of the Legislation Committee.

The proposal passed in a 26 to 2 vote along party lines. Alderwoman Arlene DePino, a Republican, and Alderwoman Maureen O’Sullivan-Best, an Independent, voted against the measure.

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posted by: streever on June 8, 2011  8:24am

Great work, Mike. I’m proud of what you’ve done in your brief tenure here.

I can already see the comments about bankrupting New Haven. Get over it, folks. We pay our top brass well above their expected salary grade anywhere else, and allow 120k+ principals to work 40k teacher jobs at their old rate, because we can’t fire them due to burdensome union agreements our Mayor offered in exchange for support in his governor run.

Our poorest citizens deserve to make an income above the federal poverty line. If we can’t afford to give them a salary that is above poverty, we are truly a failed city.

posted by: streever on June 8, 2011  8:26am

Just a reality of government spending—this will only cost taxpayers 187k and put money in the hands of people who actually spend it.

The new bridge? what, 90 million?
Route 34 re-do which prioritizes Yale New Haven’s interest over those of citizens who came out to public meetings is costing taxpayers almost 40 million in just the first 30% of the project.

We need to help our poorest citizens and not just continue to subsidize large corporate interests.

posted by: What??? on June 8, 2011  9:02am

@streever—————Mike Jones…PRICELESS!

posted by: streever on June 8, 2011  9:16am

@What???
Huh?

posted by: Noteworthy on June 8, 2011  10:39am

This one action in and of itself will not bankrupt the city. It is just another escalation in city costs that one combined with all the other irresponsible individual actions, will bankrupt the city. We cannot pay our bills as it is. We are robbing our safety net of reserves to pay last years bills and cutting deals with Yale for 100 years for a lousy $3 million not because of one decision like this, but because there are many, many decisions like this.

If you get cut often enough, eventually you can bleed to death and that’s precisely what’s happening. The fact of the matter is this legislation’s aim is all wrong. Why mandate higher wages and do nothing for job creation and ecnomic vitality or nothing to drive down the cost of living in New Haven? Right, that would mean actually cutting the budget and city spending/borrowing. God knows, we can’t do that! If it’s going to cost more, why wasn’t an amount equal to this $187K cut from the budget to make room for this new expenditure?

There are always trade-offs when you pass ideologically based legislation like this. My problem with it every time is that proponents never want to give anything up in order to pay for it. They get the headlines and we’re left to pay for it. The end result is mission creep, expense growth and then like magic, a budget deficit where people are willing to consider scams and schemes to bridge the divide between income and expenses.

posted by: What??? on June 8, 2011  10:58am

“The new bridge? what, 90 million?”
“Route 34 re-do almost 40 million in just the first 30% of the project.”

Mike Jones…PRICELESS!
 
O.K.  ...it was a little corny

posted by: Jonathan Hopkins on June 8, 2011  11:07am

The bigger problem, as Atwater mentions, isn’t low wages but an astronomical cost of living to the average American. Money and political will is better spent on infrastructure and lower taxes (or more and better services), that result in much lower cost of living. With our current underperforming infrastructure, working class and low-middle calls families are forced to own a car for each working adult, and live lifestyles that result in high health care costs, high transportation costs, high child care costs, high housing costs (the buy more sq ft. because the neighborhood park is unsafe), etc. Raising the wages is a double whammy - it hurts businesses and does nothing to address the elephant in the room, which continues to get bigger.

posted by: streever on June 8, 2011  11:12am

@Noteworthy:
If I was in charge of the BoE budget, I can tell you I would find 187k to help the poorest working residents of our city—no problem!

@What:
I’m a corny guy, I like it!

posted by: JAK on June 8, 2011  12:49pm

This is misguided policy.

It’s not the small direct cost of a couple of hundred thousand dollars which is the most harmful.  It is the pernicious chilling effect that this legislation and other price-fixing policies like mandatory sick leave, has on the private sector.  This, like the prevailing wage law, onerous permitting fees, the bureaucratic municipal red tape, all contribute to the high cost of doing business in the city.

Proponents want to help the poor. We all do. The flaw in the proponent’s logic is that New Haven has increasingly little to offer businesses to offset the ever increasing cost of business here.  And therefor it has become increasingly difficult to attract real taxpayers to come to New Haven. If they do come, the city in order to lure them here is forced to give tax abatement.

So what will be the impact of this law?  Some companies when bidding on city jobs will now decide it’s not worth it to bid which simply reduces the competitive marketplace and puts upward pressure on city costs. 

And those that do decide to bid will simply take the total costs, including livable wages, and factor that into their pricing proposal. Business does not absorb the hit that this law will create.  Businesses price their product or service with a specific return in mind, or an ROE.  The ROE remains stable.  The only factors that work to reduce ROEs are broad-based and market driven. 

So do the proponents think that the actual cost of paying some people above-market wages will be borne by anyone other than city taxpayers?  The livable wage is simply a hidden tax on property owners and an outright transfer of wealth. 

How about this:  Instead of making the businees environment even more unfriendly, why not just call it like it is and propose to increase municipal welfare payments to qualified people?  By being transparent and honest about the rationale, we can at least not do more damage to our business environment.

Unfortunately, our population is becoming increasingly dependent on government for subsistence.  That is the real race to the bottom.  We have to come together to devise a sustainable strategy to bring long term prosperity to the area through growth in the private sector.  This legislation is not it.

Please read Walter E. Williams, and his new book “Race and Economics”

posted by: Atwater on June 8, 2011  2:00pm

@JAK: I do not think this legislation will impact municipal bidding, since a lot of labour, i.e. construction, pays somewhere near the new minimum wage. Also, this will not aggravate the problem of attracting businesses/industry to New Haven. It won’t make it better, but it won’t make it worse. Private businesses will continue to stay away from New Haven because the cost of doing business is too high thanks in part to overinflated property values and high property taxes.
This legislation seems like its an attempt to correct the imbalances of our current economic system. Since it affects only municipal workers, many of whom do not reside in the city, any corrective action will be limited.
I would much rather see the BOA implement a rent control program as well as a tax incentive program to lure light/medium industry to New Haven.
No one really questions why the cost of living in New Haven is so high as to justify such a high minimum wage. Just pay people more, is that the answer? I don’t think it is; a collective effort is needed to begin controlling rents in all neighborhoods, lower property taxes and reintroduce light/medium industry to the city. Maybe then New Haven will be a liveable city for all of its citizens.

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