Yet another data point to make us feel good about voting for Brigid Shea last May…from the Statesman:
Also Tuesday, a City Council committee recommended making $11 an hour Austin’s standard for (tax) incentive packages in all but exceptional circumstances. The lone dissenter was Mayor Lee Leffingwell, who said the $11 minimum would add costs and complications for companies that could drive them elsewhere and undercut Austin’s economy. Three council members voted for the requirement. The measure, which will come to the full council in the coming months, will need four votes to pass.
OK, we’re going to go a bit into the weeds here.
1) This will effect companies only in a minor way… for most of them, they’re already paying more than $11/hour for many of their employees. Further, this brings new employers in Austin more in line with the local market where it’s already hard to hire people for less than $10-12/hour. The actual impact will be very marginal.
2) The idea that companies will look elsewhere has some, very limited, merit. However, it will be marginal businesses that are too weak to survive and already offer substandard wages that will look elsewhere. This is a net positive because it opens the door to better managed enterprises looking to put down real roots in our community. It also cuts the inevitable demand on public services that comes with low wage jobs.
3) I really don’t understand why an elected official would want to give away public funds in an effort to actually LOWER the standard of living in our community. By subsidizing companies that don’t pay living wages, you’re not creating jobs that will force wages higher, you’re actually lowering the aggregate wage level. This effects everyone earning an hourly wage since many companies set their wages in part based on predominant wages in the community.
4) Leffingwell’s (and the Chamber’s) position appears to be that we’re negotiating from a position of weakness as a city which could not be further from the truth. There is no indication from the deals inked recently that this requirement would have a materially adverse impact on a company’s decision to move here since most of those companies are already paying near or above the required level for a tax incentive. This position indicates a lack of faith in the local economy and the local workforce… frankly, it’s silly since the resiliency of the economy here has been extraordinarily impressive.
5) The objections of various contractors are curious since this would be implemented across the entire market so no competitor would be able to undercut another based on wages under the minimum set level. Additionally, the impact from higher quality workers hasn’t been taken into account as part of their analysis which could positively effect their bottom lines by allowing them to collect on early completion bonuses within their contracts. Councilmember Martinez offered to throw a bone to contractors through a city funded loan program to help contractors pay the higher wages while they’re waiting for checks from general contractors. Frankly, I don’t get it… subcontractors have always been at the mercy of payment whims of the GC’s. How exactly does this change anything?
The ultimate question is whether or not our leaders VALUE their constituents. While most of the Council (as well as the Travis County Commissioners Court which has already approved tying $11/hr wages to tax incentives) appears to, it’s clear Mayor Leffingwell does not. This was one of the two problems we had on Councilmember Shade’s re-election effort.