Liveblogging the Marketplace of Ideas: Good Jobs
Welcome to the live blog of the Drum Major Institute's Marketplace of Ideas! Today New York City Comptroller John Liu will introduce Pittsburgh City Council Member Douglas Shields, who will discuss his work to pass prevailing wage legislation in Pittsburgh. Shields will be joined by New York City Council Member Melissa Mark-Viverito, Peter Colavito of SEIU 32BJ, and Ava Farkas of the Retail, Wholesale, and Department Store Union (RWDSU). DMI's Executive Director PJ Kim will moderate. Check back in for updates on the discussion about how New York can follow Pittsburgh's lead and ensure that city funds don't subsidize poverty-level jobs.
8:30 a.m. Getting started with PJ.
8:34 a.m. Today is the 144th day for Liu.
Liu says there's a light at the end of the economic tunnel. Economic growth indicators are starting to trend upwards after two years of consecutive declines.
"Economic development has been an issue for years--certainly for the eight years I was in the Council."
Liu says he supports the President's financial reform package because it will strengthen New York City's economy, which is "tremendously dependent on Wall Street and the financial industry."
"It will inject a great deal more predictability. It will strengthen our financial markets. It has the ability to create jobs for us."
He says we need to diversify economic development, but that there needs to be more accountability measures.
"Any time the city provides a significant amount of economic assistance or support to a developer, you are actually taking value away from the public sector and giving to the private sector. If there is a public subsidy involved, it's perfectly natural and logical there needs to be a clear set of benefits."
He says "it's hard to understand exactly what the EDC is doing. While over the recent years economic subsidies for private development has gone up yet the number of jobs created is actually on a downward trend. We have to ask ourselves why is there this divergence. It just sounds great to announce big projects with a total number of estimated jobs to be created. I've seen a lot of these announcements made. Then a few years later people are wondering well, what happened to all those jobs that were supposed to be created."
Liu said out of all the city agencies his office audits, the EDC is one of the "less cooperative."
"City agencies are generally cooperative and they want ideas on how they could do more with less especially in this very difficult time. There are two agencies out of the multitude of agencies for whatever reason didn’t want to hear anything. The EDC is one of them."
He says the EDC has kept $125 million more than they are entitled to.
Liu said the EDC should give the money back "especially at a time when we really need it for weird reasons like education...basic city services. The EDC has really grown in its influence and its impact and its control over not only city coffers, but the economic value. It is an agency that really needs to be reined in."
As a member of the Industrial Development Agency board, Liu has voted no on all the proposals even though they promised jobs, affordable housing, reconstruction of supermarkets.
"Who could possibly oppose any of these projects? The question was not whether these projects were deserving. What about all these other projects that I know over the last eight years have been in the pipeline. The vast majority never saw the light of day. The IDA board only get the proposals after someone at the EDC decides they are the one deserving the most merit."
8:48 a.m."The public needs to be more a part of the process. What is the pathway that leads to a granting of an economic subsidy? Who decides that private development, special projects get these subsidies? It is this frustration that is leading the Council to propose and I hope enact measures that strengthen concepts such as prevailing wage, such as living wage."
8:53 a.m. "The City Council legislation--as I understand it--that’s about to be announced tomorrow will also charge the comptroller's office with enforcing many of the provisions in the living wage law. I don't have a vote on that anymore, but I do support the concept of living wage," he says.
"It's a proposal that is driven largely in part because its really hard to understand who is making the decisions at an agency/nonprofit organization like the EDC. The legislation seeks to set some kind of standard for jobs," he says.
"We want every job to be created in New York City, but when there is a taxpayer subsidy--a public subsidy--on these private developments it is absolutely logical that the legislative body--the representative body--impose standards that actually create good jobs in this city."
Liu said there needs to be "a mechanism" that looks at the "number of jobs created--good-paying jobs created."
"Those promises once announced become part of the contract with the public."
8:59 a.m. Liu announces Shields.
He describes the process of passing prevailing wage legislation a "fistfight."
Shields talks about the history of good union jobs in Pittsburgh before the economic decline there. And the increase in the number of public subsidies given to developers.
"There was a union for everything back then. How the heck did we start building stadiums? Now we're partners with sports teams and that’s a real problem with municipal government."
He also talks about the lack of accountability
"Does anyone go back and check? Did it create a better quality of life? Very seldom do people look back. People have to be very, very rigorous about these deals. There's no report card."
Shields says the project that really pushed the fight for prevailing wage in Pittsburgh involved a development in prime real estate on the city riverfront between two stadiums. He says the city gave the developer three subsidies: the recently redeveloped infrastructure in the area; cheap land at $8 a square foot; and the city services that go to support the poverty-level jobs created by the project led by developer Frank Kass.
"Why am I giving Frank Kass all this money? It doesn't pay to keep people poor."
He says what surprised him about charges of socialism from opponents of his prevailing wage when he thought about "how little we were asking for." The legislation required prevailing wage for service sector employees in companies that received $100 in subsidies. He pointed to the stable workforce that employers get when their workers are paid well. But developers and employers worked hard to defeat the bill.
"What we don't want to do is dumb down the market by public subsidy. You got a subsidized deal and then you dumbed down the wages. It's crazy. As equity shareholders, the public is entitled to a return on investment."
9:25 a.m. "These are the biggest welfare queens I've ever met," he says about private developers that come back for more and more subsidies.
He says passing the bill required building a "blue-green alliance" between environmentalists and labor. And now that prevailing wage has passed, there will be a series of bills this year created through that alliance.
9:31 a.m. PJ asks Mark-Viverito why we need to pass legislation like this in New York. Mark-Viverito:
"It’s the logical thing to do. In terms of economically, it makes sense for us a city. Do we want to continue to have this piecemeal approach as a city to each project that comes up and negotiating deals separately or do we want to implement legislation and law that creates a uniform policy about what the expectation is if you're going to do business in the city of New York and you receive a subsidy from the city of New York. What is the minimum expectation that were asking of you in terms of what you're giving back?"
"The Kingsbridge Armory vote was a line in the sand in this Council and for us as a city in terms of how we're going to move the discourse in a different direction one that benefits the masses in this city and not the very, very few."
She says the administration needs to step up to the plate in terms of how the city can be viable in difficult economic times:
"When you have Deputy Mayor Wolfson and when you have the Mayor and when you have Mark Page all talking about the fact that we're not going to talk about any additional bonus taxes; were not going to talk about carried interest; were not going to talk about the wealthy maybe paying a little additional more. When you're sending that kind of a message, that's problematic to me. That means that the expectation is that everything in this city is going to continue to be balanced on the backs of the most vulnerable."
"The bills really complement each other."
Mark-Viverito says the city "continues to revisit failed economic policies," creating a "chasm between the wealthy and the poor."
9:34 a.m. PJ asks Farkas what lessons can be learned from the Pittsburgh experience. She says we need to build a movement:
"We are all in this together. It does take a fight."
She says we need to "start thinking about the permanent jobs that come after the construction jobs."
9:38 a.m. PJ asks Colavito how we can get the business community on board.
"Raise questions about a subject that was taken for granted: that it's a good idea to give money away to business with no strings attached and hope they do the right thing."
Colavito points out that many businesses are disadvantaged by the city's current economic development policies. By not upholding prevailing wages, these policies drag down the market and make it harder for businesses that want to create good jobs.
Colavito laments the New York used to be a "laboratory" for this kind of legislation and has fallen behind places like Pittsburgh and other cities.
"Government can't solve all the problems. But there's no reason the government should be fighting the tide in the other direction."
9:43 a.m. PJ asks Mark-Viverito who still needs to be convinced and what are the next steps. Mark-Viverito:
"Clearly the administration is not supportive of my prevailing wage bill."
She says we need to make sure that Council members supportive of the bill don't get "picked off by the administration."
Mark-Viverito argued that the City needs a uniform approach to what benefits come out of publicly funded projects:
It becomes "tedious to have to monitor every single agreement."
9:54 a.m. Shields says monitoring deals will be very difficult without the support of city leaders.
9:56 a.m. Colavito:
"The city finds a way to monitor all kinds of things."
10:02 a.m. Shields says this type of legislation has been happening at the local level to address the lag at the federal government.
"How do you have a minimum wage in this country that didn't go up for 10 years? Everyone got a raise but the bottom."
10:10 a.m. Final thoughts from Shields:
"Does this deal live up to what we aspire to be? It doesn't bother me if someone's getting rich. But if they're vacuuming up money out of our community..."