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Thursday, January 21, 2010

Can Pittsburgh Make a Living Wage?

Posted By on Thu, Jan 21, 2010 at 11:58 AM

There's already been some discussion of what City Councilor Ricky Burgess is up to with his effort to revive the city's long-dormant living wage legislation.

The big concern -- especially among those fighting for a prevailing wage bill already on the table -- is that all this newfound attention may kill workers with kindness. There's also concern that it will put some politicians -- Bill Peduto chief among them -- in a tough spot. 

We'll get to the reason for those concerns in a minute. But first, a bit of history. 

The living-wage bill was passed in 2001, but put on indefinite hiatus the following year -- more about that in a second. Burgess' new legislation would take the measure out of limbo.

You might think such a move would be embraced by advocates of the prevailing wage measure currently before the city. Both bills impose wage standards on employers who get taxpayer dollars. But the prevailing wage bill applies only to workers in a handful of industries -- food-service, hotel workers, grocery-store-employees, and building maintenance. The living wage, meanwhile, applies to employers in any line of work. It's broader in another sense as well: It applies not just to recipients of tax subsidies, but to contractors and subcontractors working directly for the city. 

Then too, the living wage establishes a pay scale considerably higher than the prevailing wage does. In 2001, the living wage would have set a wage floor of $10.62 an hour, $9.12 an hour with benefits. Actually, workers would be making much more than that today: The living-wage bill included a provision to adjust the wage for inflation every year. By my calculations, today's living wage would be about $12.66 an hour, $10.88 with benefits.

Earnings under the current prevailing wage legislation, by contrast, would be much less impressive. A check of the U.S. government's wage database suggests that in this part of the country, a typical custodial/food service job pays in the neighborhood of $8-9 an hour, with benefits. So even for those employees lucky enough to benefit from the prevailing wage bill, the living wage would be a better deal.

(UPDATE: Since posting this, I've heard from prevailing-wage backers who say that my reliance on government figures is misplaced. The government figures average Pittsburgh employees with those of outlying areas .... whereas, as written, the prevailing-wage legislation applies only to employees in large-scale -- 100,000 square feet and up, generally speaking  -- developments in the city and only considers wages inside city limits. That's a much more select group of worksites: The SEIU estimates that wages for employees in that cohort are in the neighborhood of $10-$13 an hour with benefits. If anything, prevailing-wage backers say, a living wage bill might be lower than the prevailing wage, thereby undercutting the wages currently being paid to hotel, grocery-store and other employees. This would, of course, be another reason to be wary of the living wage bill.)   

Yet when Burgess brought up the living-wage measure, the response from the economic-justice community has been muted. Last night, Pittsburgh United sent out a message welcoming his bill ... but urging that it not distract from the prevailing wage legislation. 

The statement quotes Rev. John Welch, who heads the Pittsburgh Interfaith Impact Network, observing that "Pittsburgh taxpayers are tired of seeing their money used to keep people in poverty -- that's why we're seeing such strong interest in legislation that will create good jobs at subsidized developments." Even so, he adds, "There's no reason to delay a ... vote on the prevailing wage bill with all nine council members in favor." 

(Yes -- all nine council members: Patrick Dowd, formerly the lone councilor not cosponsoring the prevailing wage bill, signed up yesterday. Dowd voted for the bill last year, and told me he had "always supported this bill and want to be a part of the team to help make this even more successful legislation. If we don't, those who want and deserve prevailing wage will be devastated if this is attacked in court. ")

Why the wariness? Because as one prevailing-wage backer told me, the reintroduction of the living-wage issue "has Yarone Zober's fingerprints all over it." I'm not sure that's fair to Mayor Luke Ravenstahl's chief of staff, or to Burgess himself: Living wage is a better deal for workers, period. But there clearly is concern that the living wage is being brought up now to muddy the waters. Ravenstahl first tried to offer a prevailing wage bill that could apply to no one: Now comes a bill that could kill prevailing wage by applying to everyone.

How could that happen? For one thing, as the Post-Gazette notes, councilor Bill Peduto -- a champion of the prevailing-wage bill -- was far less enthusiastic about living wage. Back in 2002, Peduto voted with a narrow 5-4 majority to add a provision making the city's bill dependent on the county passing a similar measure. That vote is what put living wage in a coma for the past decade.

As news accounts at the time explained, tying the city's efforts to the county addressed a concern voiced by then-Mayor Tom Murphy -- that "living-wage requirements would drive businesses away from the city."

That is, of course, the same misgiving expressed by the current administration about today's prevailing wage bill. In fact, the Ravenstahl administration has taken a page from Murphy's book -- seeking to make any city prevailing-wage ordinance dependent on the county's passing one too. 

So one effect of reviving living-wage may be to remind folks of Peduto's former position, giving Ravenstahl cover for his own approach ... while perhaps isolating Peduto from the labor groups backing the prevailing wage bill.

Another impact, some prevailing wage backers fear, is that it will splinter the grocery, hotel and other employees from workers in other industries, who have nothing to gain from the prevailing wage bill as currently written. And at the same time it could sow some division among labor, meanwhile, a living wage bill might inspire more businesses to weigh in on the whole question of wage legislation. Living wage, after all, is a broader initiative -- one that could mobilize a broader group of businesses to oppose it.

The wage issue, in other words, could become a wedge issue. Whether that was the intent or not.

In council, Peduto is arguing that the living-wage bill doesn't just apply to folks getting tax breaks: It applies to contractors and subcontractors for the city as well. So unlike the prevailing wage bill, the living wage could worsen the city's chronic budget problems. No doubt this will prompt developers to say "Hey, join the club!" They could fault the city for being willing to pass along costs to them, while trying to beg off wage initiatives that would cost the city money. 

The counter to that, of course, is that since the living wage bill passed nearly a decade ago, Pittsburgh has been put into financial receivership. Council must take into account a panel of state overseers -- a panel that didn't exist when council first debated the living wage in 2001 and 2002. It makes sense, then, to do what the folks at Pittsburgh United are pushing for: Pass the prevailing-wage measure now to set rules for tax subsidies that others received. And then contemplate -- in concert with financial overseers -- a measure that would have a more pronounced effect on the city's bottom line. 

But I've got a feeling this is going to be a bumpy ride. 

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