Contributors
David Segal: Providence needs ‘living wage’
09:57 AM EST on Friday, January 12, 2007
THE JOURNAL’S Dec. 27 editorial, “A deadly wage proposal,” on the Providence “living-wage” ordinance, represents a surprising ignorance of the specifics of the ordinance or a disturbing willingness to mislead the public. Either way, The Journal ignores the substantial body of evidence that “living wage” ordinances achieve their purposes: to help combat poverty and ensure that development actually benefits city residents.
Over 140 jurisdictions have passed such laws, many in the Northeast. It’s time that Providence, with its 41 percent child poverty rate — equal to that of pre-Katrina New Orleans — followed suit.
Claims by Mayor Cicilline’s spokespeople that the ordinance is “being rushed through” are disingenuous: The mayor supported the ordinance when it was introduced six years ago, until months into his first run for executive. While tax breaks worth millions of dollars are regularly rammed through the council with minimal public vetting, the “living wage” has undergone extraordinary scrutiny: multiple public hearings, bouts of opinions-page sparring, hours of debate on call-in radio, countless committee meetings — including three this fall, and at least two council floor votes.
The ordinance is more modest than those in most other communities that have passed “living wage” laws: It would only apply to what the city pays its employees and entities that have been awarded large city grants or tax breaks, requiring that they pay their workers $10.19 per hour, and provide health care or another $1.78 per hour.
The Journal’s fear-mongering centers on the ordinance’s supposed implications for Providence’s nonprofits. The Journal writes, “The measure would require that any business or nonprofit agency benefiting from a new city tax break or from large city grants pay its full-time employees at least $10.19 an hour.” In fact — and conspicuously without mention by the Journal — in any given year, the ordinance would apply only to non-profits receiving more than $100,000 in city funds that also employ the equivalent of at least 25 full-time employees. The wage standard would be phased in over two years: Affected nonprofits wouldn’t pay the full wage until August of 2009.
It appears that the ordinance would affect at most only a few nonprofits, of which the Providence Public Library is easily the largest recipient of city funds, at more than $3 million each year. The Journal has a troubling history of covering for the well-heeled leadership of the PPL, without acknowledging the cross-pollination of each of their boards. (The Journal’s editorial-page editor served on the PPL’s board until last year. The wife of the Journal’s publisher still sits on the PPL’s board. And the list goes on.) Were we, the authors of this piece, similarly conflicted, the Journal would have (rightfully) called us to task years ago.
The Journal insists that the wage increases would “whomp many businesses and nonprofits [sic] hard.” The “businesses” in question are not mom-and-pop shops. They’re developers benefiting from city tax breaks, generally for projects worth millions of dollars — who, if affected by this ordinance, were planning to pay their service workers a pittance. These same workers are the most likely to live in Providence, and the most likely to have difficulty contending with the localized increases in rents and property taxes that often follow from major new developments.
The Journal goes on to hysterically assert that the “effects of this ordinance could be disastrous to the city — slamming employment and spawning a fiscal crisis as tax-paying enterprises, as well as nonprofits performing important social-service functions that would otherwise have to be paid for by government, leave in droves.”
As established above, it appears that the ordinance would affect at most a handful of nonprofits. Since it would apply only to future tax breaks, and not to those already issued, it’s absurd to assert that businesses already in Providence would leave upon the ordinance’s passage.
As to prospective tax concessions, the mayor put it well during his inauguration ceremony: “Let me be clear. We are not interested in ambition for its own sake. More buildings, more tourist attractions, and more people, are only helpful to us as a means to an end.” And so it’s time to ask: Why is the city hell-bent on conceding taxes to developers who aren’t building affordable housing, aren’t striving to hire city residents, and are paying minimum wage or just a little more? Especially when we consider the harm done by the localized increases in taxes and rents following such projects?
After posing these questions ad nauseam during our tenures on the council, we don’t expect that a satisfactory answer will be forthcoming.
David Segal, formerly on the Providence City Council, is a Rhode Island state representative.
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