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Advocates, Economists Push Back On Living Wage Study
David Freedlander

October 5, 2011
View the Original Article

The Bloomberg administration released a report this morning showing that the City Council’s living wage bill could cost the city some 13,000 jobs but a number of economists are saying that the city’s methodology was so flawed that it was almost “deliberately misleading,” in the words of James Parrot of the Fiscal Policy Institute.

According to Mr. Parrot, the study includes two data points that have been or will be written out of the legislation–one which exempts some developments in the outer boroughs that receive a tax exemption, and another which raises the threshold of the kinds of projects that would be forced to pay a living wage.

“The study’s real estate analysis is so fraught with dubious assumptions it should be nominated for a science fiction award,” he said. “It takes place in an unrecognizable New York City, where real estate values never rise and 40,000 retail jobs weren’t added over the past decade. Who would have thought that $10 an hour wages could sap the animal spirits completely out of real estate developers?”

The living wage bill currently before the City Council would require a minimum wage of $10 an hour plus benefits, or $11.50 an hour without, and would apply to employees whose companies received at least $1 million in city subsidies. Manufacturing companies and non-profits would be exempt.

Noting that the study–by the consulting firm Charles River Associates–cost the city $1 million, advocates compared it to other over-priced, outside contractors that the city has hired.

“The study and its outlandish job loss projections are complete junk science,” said Paul Sonn, legal co-director of the National Employment Law Project. “This is EDC’s CityTime contracting scandal–overpaying outside consultants to analyze an imaginary proposal to distract attention from the fact that the city wants to hand out billions in tax breaks but can’t figure out how to get the companies to pay non-poverty wages. We’re baffled why the Bloomberg Administration failed to have its high-priced consultants fix the errors that were flagged in their study months ago.”