Philadelphia "living wage" bill: labor, business disagree FWD

Tom Boland (wgcp@earthlink.net)
Fri, 22 May 1998 08:08:47 -0700 (PDT)


http://www.phillynews.com:80/inquirer/98/May/13/city/COUN13.htm
FWD  Philadelphia Inquirer - 13 May, 1998

  "The bill would require any company that provides services to the city
  -- such as cleaning municipal buildings or providing security at
  homeless shelters -- to pay workers a minimum of $7.90 an hour."


     WHAT WOULD 'LIVING WAGE' BILL DO? LABOR, BUSINESS DISAGREE

     Council heard from both sides. The bill would require companies
     providing services to the city to pay at least $7.90 an hour.

     By Cynthia Burton - Inquire Staff Writer


Was Philadelphia's City Hall caught in a time warp of "trickle down"
economic theory yesterday, or were Council members debating a progressive
measure that would lift thousands of workers out of poverty?

It never became clear, as union and business leaders traded predictions of
what the "living wage" bill would do for or to Philadelphia's economy.

The bill's sponsors -- Council members Angel Ortiz, Richard Mariano, and a
half-dozen others, including Councilman Michael Nutter, who chaired
yesterday's hearing -- say that at $7.90 an hour, a family of four would
survive at the poverty level -- barely.

The minimum wage is set at $5.15 an hour, which they argue
institutionalizes poverty.

The bill would require any company that provides services to the city --
such as cleaning municipal buildings or providing security at homeless
shelters -- to pay workers a minimum of $7.90 an hour. It does not cover
construction companies or small- to mid-size nonprofit organizations.
Companies that have more than 25 employees and get city assistance worth
more than $50,000 -- low-interest loans or tax breaks, for example -- would
also have to pay workers the "living wage."

And, when those companies hire new workers, 15 percent of them must be
former welfare recipients.

The bill's requirements, according to business leaders, would send business
and jobs out of the city.

Chamber of Commerce president Charles Pizzi said the legislation would take
Philadelphia back to the 1980s and early 1990s, when employers fled the
city to find better tax and regulatory climates elsewhere.

"Between 1969 and 1995, the number of employees in the city of Philadelphia
fell from over 900,000 to under 700,000 jobs. The direct correlation is
anti-business legislation -- wage taxes, local tax increases and the like.
If you mandate business again, you will see them leave the city," Pizzi
warned.

With the city's continuing plan for wage- and business-tax cuts, business
has been more inclined to expand or come to the city, Pizzi said. "This
bill is a throwback to the policies of 10 years ago, when there was no
vision for the city," he said.

On the other side of the philosophical spectrum was Thomas Paine Cronin,
head of District Council 47 of the American Federation of State, County and
Municipal Employees.

With the minimum wage at $5.15 an hour, workers are guaranteed "a type of
debt-soaked, high poverty that is a half-step above outright indigence,"
Cronin said.

He told Council members that passing the bill would send a message: that
"the government of almost 1.5 million people will not be a party to
enforced poverty."

City officials said the impact of the bill was impossible to calculate, but
Mariano said it would improve wages for as many as 10,000 employees of
businesses that do contract work for the city.

Louis Applebaum, procurement commissioner, predicted that it would raise
contract costs and reduce the number of companies willing to bid on city
work.

James Roundtree, deputy commerce director, said the bill would impose
"undue financial hardships" on minority- and women-owned businesses
struggling to compete with big corporations for city work.

And Deputy Mayor Kevin Feeley called the bill "an economic development
disaster waiting to happen." He said the crux of the Rendell
administration's argument against the bill was: "You don't pay a living
wage when companies won't come and people won't have jobs. The best way [
to get people above the poverty line ] is to create more jobs."

Council is poised to act on the bill before its summer recess in June.

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