the wage debate
Everyone deserves to earn enough money to pay for their daily essentials. On face value alone the proposed prevailing wage bill in Pittsburgh makes sense. It speaks to the basic decency of employers and their willingness to take some responsibility for their employees lives.
As I understand it, the legislation ties real estate development dollars that the city’s Urban Redevelopment Authority invests in a project to a guarantee that the developer pays prevailing wages to everyone involved, for evermore. This means any business within a development must also comply. No longer do the proponents of the bill want to trust employers to do the right thing. They want to ensure that public dollars result in prevailing wages.
I so sympathize with this point of view.
But I’m going to land on the other side of this debate, and here’s why.
About five years ago I purchased the Liberty Bank Building on main street in East Liberty. It sits in a neighborhood that at that time had many shuttered storefronts. It had been vacant for ten years, and I lovingly called it “green”. The building was covered inside with green mold. The renovation that we embarked on was extensive and complicated. Not much was left to save but the beautiful sandstone walls. It is not a huge building but it was a huge financial undertaking. It required the URA’s assistance, my life savings and an awful lot of time. This is the sort of project you call “patient”. I took this on because it matters to me that my projects make a difference in the long run and I was sure this one would.
In the early years it was almost impossible to find good tenants. Tenants came and went, damaging the spaces and requiring more funds to repair them. New potential tenants could not see the value of locating to this neighborhood. It was tough. Very tough. My partners and I lost money. Dollar Bank and the URA helped as much as any financial partner could. They worked with us, unfailing, through the tough times until now, five years later, we are beginning to break even.
The due diligence that came along with city funds that were borrowed has also been burdensome but I believe a fair exchange. Every year (amongst a sea of other reports) I compile a report of jobs created in the building. Where once no-one was employed here, now sixty-one people come to work at the Liberty Bank Building every day. I consider this a staggering success. If I had to entice tenants to the building and require that they report their wage rates to me or the URA, I doubt that we would be at break even today.
Today, Rich Lord reported Rabbi Jami Gibson as rhetorically asking developers, “Why can’t you get by on the minimum profit?”.
This comment hits me hard in the gut. I get by on LESS than minimum profit, Rabbi Gibson. I’ve invested myself whole-heartedly into this neighborhood. While the building I built may not require that everyone in it receives prevailing wage, it has helped to turn this neighborhood around, and brings far more jobs along with it than just inside the building alone.
Would I have tackled this building with the prevailing wages as an added mandated obligation?
No.
Tags: development, leadership, pittsburgh, politics, reinvention
January 19th, 2010 at 5:10 pm
From what I understand about the vetoed version of the bill, it was targeted at developments receiving $100k or more in city subsidies and having more than 100k square feet (30k for grocery stores). So while I completely agree with your reasoning on the matter (and am opposed to the bill in general), it seems like the bill was targeted at large development firms conducting business with vast quantities of tax-payer money and your development wouldn’t even qualify.
January 19th, 2010 at 5:13 pm
I do understand that. I believe the issues are identical and perhaps even more problematic for a larger building. Developers will stampede from the city to find a place where they can do business without such heavy handed legislation. Again, I understand the reasoning here, but it is based on the assumption that no-one will do the right thing unless it is forced upon them. Having poured sweat and equity into the city, that leaves a rather bad taste in my mouth.
January 19th, 2010 at 5:35 pm
Agreed, and I think the largest fallacy with arguments in favor of the legislation is that they disregard the nature of the jobs being targeted for wage-enforcement. I worked as a retail cashier during my college years, and there was never any question that cashiering was nothing more than temporary work to pay immediate bills. Removing or limiting access to low-wage jobs may immediately benefit employees who have decided to make a career of such work, but in the long run it would seem to harm the community by limiting options for new job seekers and stagnating the job market by reducing investment (as you mention).
I assume the latter reason is why Ravenstahl’s proposed bill would have required the county to enact similar legislation before the city’s bill came into force, but with Butler and Westmoreland so close I could see development fleeing to the borders.
January 19th, 2010 at 8:42 pm
[...] so I would normally have just kept my opinion to myself, but Eve, over at utterly opinionated, has addressed the prevailing wage issue floating ominously around City Hall and I find myself moved to make a few remarks of my [...]