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Firm Selected for Living Wage Study
Gotham Gazette
Courtney Gross

August 12, 2010
View the Original Article


The city Economic Development Corp. has selected Boston-based Charles River Associates to conduct a $1 million study on the impact of living wage policies across the country and how they might affect the Big Apple’s economy.

The study is in response to an outcry from labor unions and advocates for the city to adopt a living wage — a debate that culminated in the defeat of a controversial development project in the Bronx last year called the Kingsbridge Armory. The City Council voted the plan down when the developer would not promise to force retail tenants to pay a living wage.

The adminsitration has said it would like to conduct a study before it considered any widespread policy, and the move has effectively stalled two pieces of living wage legislation at the council — one to require a living wage for building service workers at city-assisted developments and another that would require all city subsidized developments pay a living wage.

Daniel Hamermesh, a well respected professor at the University of Texas at Austin, will be the chief economist on the study, which is expected to be completed in the spring of 2011. He is also a research associate at the National Bureau of Economic Research. Matthew Thompson, a vice president at Charles River Associates, will lead the project.

Even before Charles River Associates was selected as the consultant, elected officials and living wage advocates were debating the potential results. Comptroller John Liu called it a “sham” in June after the Economic Development Corp. failed to appoint an advisory panel of labor economists to oversee the study’s methodology and results.

Now some advocates are questioning the objectivity of at least one member of the study’s team, specifically David Neumark, a professor of economics at the University of California and a fellow at the Public Policy Institute of California. Neumark has authored several studies questioning the economic viability of living wage laws.

In a paper from 2001 titled, “Living wages: Protection for or protection from low-wage workers?”, Neumark considers whether living wage law increases the wages of lower wage workers or if it instead encourages municipalities to contract with unionized labor. Last summer, in an op-ed in the Wall Street Journal, Neumark discusses the drawbacks of raising the minimum wage — in both good times and bad.

The other members of the study team include: Anthony Yezer, director of the Center for Economic Research at George Washington University, Timothy Riddiough, chair of Real Estate and Urban Land Economics at the University of Wisconsin-Madison, and Martha Courchane of Charles River Associates.