What’s worse — screwing up the city’s economy through left-wing social engineering, or pretending to? New Yorkers should find cold comfort in the fact that City Council Speaker — and mayoral wannabe — Christine Quinn has chosen the second course.
The council yesterday passed 44 to 5 the Fair Wages for New Yorkers Act — a k a the “living-wage” bill. It would force businesses that receive $1 million in city subsidies to pay $11.50 an hour — 59 percent above minimum wage — or $10 with benefits. Mayor Bloomberg will veto it, as he did the similar “prevailing-wage” bill last week. But the council has the votes to override him.
The bill’s backers claim to have a noble goal. The city should use its subsidies to help working people “to allow them to support their families,” as lead sponsor Oliver Koppell (D-Bronx) told the council yesterday.
Quinn herself said the vote “fulfill[s] our duty to New Yorkers to make sure that taxpayer dollars are used to provide the maximum public good.”
Yet these laws do little to help poor workers. In January, economists at Charles River Associates prepared a report for the mayor on a similar bill. They found that some low-paid workers would get raises — but others would become unemployed. And the pain would be worst in The Bronx and Staten Island, because those boroughs have more low-wage workers.
Under one estimate, for every 6,017 Bronx residents who’d get a raise, 1,067 people would lose their jobs. Take into account the people whose pay went to zero, and wages overall would go up by three cents overall.
Plus, the initiative would have almost no effect on poverty; it could even make extreme poverty worse. Hike the minimum wage, and employers will search for higher-skilled workers, harming poor people with no skills.
It also doesn’t take a 354-page paper to figure out that companies that have to pay higher wages will demand more taxpayer dollars. (In a perfect world, companies wouldn’t ask for such subsidies, and the city wouldn’t give ’em out — but that’s not where we live.)
The bill the council passed yesterday wouldn’t have as an extreme an impact as the one the Charles River folk studied. Quinn scaled down the legislation so that instead of affecting thousands of people, it might hike wages for 500. To wit, the bill no longer covers retail workers whose employers’ landlords get city bucks.
But why pass a “living wage” at all if it’s not big enough to matter much, good or bad?
Politics. The anti-poverty “advocates” and union honchos whose support Quinn needs have seized upon the bill as a top issue.
The speaker’s bet is that she can give them just enough to keep them happy — while sending a signal to New York’s real-estate and other business interests that she’s got the old-school “advocates” under control.
That’s a dangerous wager. The “advocates” know they forced her to give a little — and maybe they can force more next time.
Yesterday, Koppell called the bill just a “very important start” — and noted that $11.50 an hour still isn’t really enough to live on. In other words, they’ll be back for more — a bigger blow to job creation, pushing taxpayer costs higher, too.
Maybe Quinn figures that if the pressure stays on, the business “community” and middle-class voters will trust her to use her discretion in these matters, as they’ve trusted Bloomberg.
She’s certainly right to point out that Bloomberg, who doesn’t support the bill, has hardly been a free-market purist.
Last week, even as the mayor lectured her on the perils of interfering in the marketplace, he was careful to say that in some cases, it’s “foolish” not to offer subsidies to companies. Then he was off to brag about creating jobs at the heavily subsidized Barclays Center in Brooklyn.
But Quinn is no Bloomberg.
People trust Bloomberg — sometimes wrongly — to use his discretion because they know he doesn’t need the advocates. He never had to go through a Democratic primary, as Quinn must.
Nicole Gelinas is contributing editor to the Manhattan Institute’s City Journal.
Twitter: @nicolegelinas