Wednesday, January 20, 2010

Prevailing Wages, Living Wages, Due Diligence and Consistency **

This is intended as another "open thread" type post on the vaguaries of Councilman Burgess's push to activate Pittsburgh's living wage statue in conjunction with passage of the prevailing wage bill.

In 2001, council approved legislation mandating a $9.12 an hour wage plus health insurance, or $10.62 without, for virtually every worker whose job was paid, supported or subsidized with city money. "Everywhere that our shadow falls, we will ensure that workers receive a living wage," Mr. Burgess said yesterday.

But City Council then added a caveat that the rule would only take effect after Allegheny County adopted similar rules. County Council narrowly rejected an ordinance, rendering the city legislation dormant. (P-G, Rich Lord)

One way of thinking about this is that if it's good enough for Walnut Capital, it should good enough for the City itself. Which demands that we take into account that the City is still financially something of a basket case, and can we afford to swallow this even if it's obviously the right thing to do. Then I've heard it would not impact city paychecks so much as those of its vendors et cetera. Then there are issues of timing and momentum, due diligence, and preemption of something that could have been taken as rightfully settled.

Add links as news breaks, but preliminarily: my inclination is to recommend scheduling just a little extra time for due diligence and then probably passing them both. The benefits should outweigh the costs, and I generally don't buy in to economic nightmare scenarios.

*-THE DAY'S RESULTS: Yucky sounding. Go watch it on the web, and if you can figure out how to get there let me know. I'm having a l'ill trouble.

**-MY EDUCATED TAKE, having watched the discussion and having held some of my own, in this comment below.


  1. Why do both? Why not just pass the living wage and be done? It's easier to enforce, requires less bureacracy, and applies a benefit to a braoder population.

  2. So, the issue here is politics, not morality.

    Let the games begin!!!

  3. And how, exactly, is the city going to pay for the increase in the city budget?

    I know.... tax the students.

  4. Even a modest reduction of poverty by way of implementing a living wage will, in turn, reduce the impact on social services experiencing substantial duress during this wintry economic climate.

  5. Wow. Let's see...

    1. We're in the middle of a recession.
    2. The City is broke.
    3. And these nitwits want to mandate a living wage of $11.50/hour (per PG this afternoon)?

    The result would be an annual cost of $26,000-$27,000 as an ENTRY wage ($11.50/hr * 2,080 hrs, plus 7.65% FICA/Medicare, plus FUTA & SUTA, estimated @$700)? Not counting health insurance premiums? Assume $500/mo, $6,000 for year. That's a total of $32,000-$33,000 per year... not even counting the effect of Holidays, vacations, sick days, etc.

    Yeah, the most junior employee(s) are worth $32,000 per year. /snort

    Oh, don't forget.. when the entry/lowest wage gets raised the Unions and everyone else will want their compensation raised accordingly.

    Too bad none of the City Council members or many in any government bureaucracy/agency (City, State or Federal) have even a basic knowledge of economics and finances. All they think about is spend, spend, spend. I wonder how any of them even can balance their own checkbook.

  6. A warning to those who favor the prevailing wage legislation now before council: If you want any growth inside the urban core, if you want to discourage suburban sprawl, encourage development of available urban brownfield sites and other infil development, then you had better shout loudly against this legislation. Mark my words, IT WILL KILL ALL DEVELOPMENT IN PITTSBURGH and welcome a new era of out migration.

    If I were a developer and I could choose between a brownfield site in Pittsburgh that offers some sort of financing assistance as the carrot, but the stick that is the prevailing wage mandate, or raw land in one of the other 129 municipalities that are falling over themselves to offer the same deal without the mandate, where do you suppose I will go? Now imagine this decision going this way for every development deal during the past 10 years. If you think I'm exaggerating, then you're a fool.

    You must choose: "economic justice" (whatever the f-- that is), or sustainable development.

  7. Anon 12:16 - I am fairly certain that not everything that is covered by living wage is also covered under prevailing wage.

  8. Aren't we all shortsighted this afternoon? What benefit exists for you and your hard working neighbors when we have to support with our federal, state and local taxes social programs for the working poor?

    What revenue is gained and what expenses are saved by a government that mandates wages equal to or greater than the threshold for taxable income? This would enable said government to receive compensation from those who are otherwise exempt from taxation, no?

    Probably make quite a few families self-sufficient?

  9. n'at...

    Hell, you're right. Let's just make the living wage $50.00 per hour. That will solve all our problems. /sarcasm

    You, sir/madam, have no concept of economics or financial/business sense.

    I will say this - No one forces anyone to take or keep a job. Don't like it? Don't make enough money? Think you're worth more?

    Go elsewhere.

    I make just over $100,000. I work 2-3 hours per day. I'm looking. No big deal.

  10. Oh, forgot this - My peers are making $150,000-$180,000. I made a concious decision to try business ownership.. I'm a minority owner.. the majority owner turned out to be far less than he represented, including severly limited income growth even in a profitable Company. I'm leaving ASAP. It's the American way.

    That being said, I'd still make the same decision today.. certain aspects of my job give me tremendous freedom and latitude.

  11. Anon @ 5pm, I am pretty sure that County Councilman Bill Robinson is introducing Prevailing wage in the county so now what is your excuse?

    The only way this will work is if all are on board, just like city/county consolidation.

  12. RE: watching video of City Council online...

    The following was taken directly from the City Council website and appears underneath the photos of the 9 members of City Council:

    "Legislative Information Center

    City Council takes pride in its open form of government and is pleased to provide state-of-the-art technology to assist the general public in tracking and retrieving legislation. This includes all official actions from the date of introduction to final adoption.

    The Legislative Information Center (LIC) provides quick and easy access to legislative documents including Agendas, Action Minutes, Text Files and Master History Reports for City Council's Regular and Standing Committees Meetings. You can conduct comprehensive searches using subject matter, file numbers, and meeting dates and can obtain up-to-date information regarding the status of legislation, motions and actions and official votes.

    The latest version of the LIC includes live video streaming of Council Meetings. Meeting videos will be indexed and archived."

    The link to the LIC page is

  13. Anon @ 5:00

    Since when does "sustainable development" oust economic justice? Only in these parts - and maybe during reigns of great mindless imperialism - are these terms at odds. Show me one built project this town has actually NEEDED. This place only builds as a sorry excuse to fix rotten infrastructure! Lemme ask you this: what's the going hour rate for a capable house cleaner?

  14. Anon 2:13 - Yes, however: it appears that video only streams live as it happens, or gets compressed and archived at least ten days after the fact. Not that it's not a new endeavor and there aren't real tech / logstical considerations -- but in an ideal world, a conversation which took place during a preliminary vote would be online before the council took final action, or while it was still significantly in the news.

    Despite the drama, I'm hearing that PW is going to pass one way or the other and on schedule. LW will likely be subject to some delays, both the good kind and the bad kind, and its prospects are more unclear.

  15. Ken
    If said prevailing wage measure before County Council passes, then you should expect Butler, Westmoreland and Washington Counties to be the beneficiaries of development projects that might otherwise have been undertaken in Allegheny County. Pretty simple stuff, really. Additionally, your point about the only way this works is off the mark, too. The only way it works is if the prevailing wage is applied to a broader geographic or political area. Consolidating 130 municipalities into one would streamline and centralize local governance, but would not by itself prevent developers from seeking better opportunities in other places, all other things being equal.

    Inside Agitator
    You asked: "Show me one built project this town has actually NEEDED?" That's a subjective question. Did we overestimate the demand for office space on the North Shore? Could we have survived without a new bus terminal Downtown? Were the minions clamoring really for the retail and residential additions to East Liberty? Did we really NEED the August Wilson Center? No developer spends money and resources to build without first carefully considering the market.

  16. I saw on twitter that Down is a co-sponsor of the prevailing Wage Bill, after voting no to overriding the veto. We should all be thankful for his unwaivering support.

  17. Anon 9:39 - Then we look at both sides of those projects. Could a new bus terminal Downtown have been built in the suburbs? Could the August Wilson Center have? Is there not a significant draw to having exciting new office space along the North Shore than can not fully be replicated elsewhere? We are a node of commerce and culture. I don't want to overstate the case, but if there is a market for a project in the city, then even if one developer opts to go elsewhere because of wage ordinances that demand will not entirely go away. It's not entirely a zero-sum world and in fact we have advantages which only seem to be on the upswing. Meanwhile, to everything n'at has contributed above as to the economic advantages of wage ordinances, HEAR HEAR! I'd like to see those addressed by those taking the URA's position.

  18. A perfectly good bus station was tore down to be replaced by a newer bus station in the same location.
    Why don't we tear down the City County building and then build a new one in the same location?
    Makes perfectly good sense to me.
    Both the prevailing wage bill and the living wage bill are bad for the city.


  20. Is it true that Rev. Rick busted out the glass in his office door after his living wage bill was tabled for 3 weeks?

  21. or threw something?

  22. I'm with Burgess, but also with Lavelle. Cant run from the social contract no matter how hard you try, but let us have honest debate in the public forum to assuredly craft just legislation.
    I like to think I have done right for myself and those I have shared my workday with. Why should government waste valuable resources to support businesses who cravenly shirk the moral obligation of fair and honest payment for labor? This issue is no more acerbic than the constant battle for RCRA enforcement and litigation nor more appros than the reawakening of the progressive debates which ultimately led to the Davis Bacon Act.

    ... just sayin'

  23. Did Coghill pay his campaign manager a living wage?

  24. Do those in City Council pay their staff a living wage?


    They want to make the rules for others that they don't follow themselves.

    Kraus will say working for him is a 'labor of love.' Really? He wants to be the gatekeeper for loving your job and taking less money.

  25. Alright, watched the video. I may or may not write it up, but I'll add this note on the outcome:

    When by a 5-4 vote, Council declined to hold in ONE WEEK a public hearing on the new Living Wage initiative (less than one week, actually) to coincide with the rather perfunctory 2nd Prevailing Wage hearing, and Council instead held it for THREE WEEKS so that both themselves and the public could learn about it sufficiently to talk about it ... Councilman Burgess called it "a sad day for the city of Pittsburgh", in which "this Council acts with brute force" and "the interests of the majority override the interests of the minority", as, he frequently noted, has happened so many times in our country.

    Although I hope that Living Wage receives a thorough debate and work-up -- and a reflection upon the by-then recently passed Prevailing Wage bill should be a part of that discussion -- I CANNOT BELIEVE that actual passage of Living Wage was absolutely foremost on Councilman Burgess's mind by the way he approached that discussion that day. I don't doubt he feels very strongly about the necessity of activating Living Wage, but it seemed for all the world like the primary thing he wanted to accomplish was to spoil the celebration on the inevitable progress of Prevailing Wage, characterize it as appealing only to narrow interests, and cast the majority of Council as uninterested in real economic justice.

    If they hold a Living Wage discussion and those folks aren't supportive, Burgess could go there. But to come right out of the gate with such aggression and leap to those conclusions based on a two-week difference in when to schedule a hearing on the matter -- there was massive gamesmanship afoot.

  26. The SEIU is paying people minimum wage to go around and leaflet neighborhoods.

    Bram, the answer to some of your questions - yes, the transportation center could be built outside of the City. The August Wilson center could be built outside the City. Ever hear of the airport? However, the inverse is what this bill will cause - the City will become merely an urban services district of the County. This bill, and more importantly the union stranglehold on council that brought about this bill, has already killed our great City. This bill will be the nail in the coffin. Hostility towards tax payers and producers when they are exactly what we need in the City to solve our problems is a little backwards. But hey, corporations are evil! Up with the revolution!

  27. Perhaps Burgess is merely trying to expose Shields/Peduto, but if he is correct about their motives, shouldn't they be exposed? They have gone around to lunches and meetings with business groups and told them that this bill "really won't affect many projects" in order to stay in good graces with the same group they publicly criticize. The question then is if this bill really doesn't affect too many jobs, what is the point of passing it? Is it just politics?

    Another question I have is directed towards the so called community activists. Is there anything in this bill that ensures these jobs go to City of Pittsburgh residents? Is there anything that ensures these jobs go to residents of depressed neighborhoods? The answer - no there isn't. What is the purpose of this bill then other than to protect the National interest of the SEIU? Politics, politics, politics and Pittsburgh will suffer. The editorial in the Trib was dead on. The reason we give out subsidies in the first place is because it IS more expensive to do business in the City and it IS more expensive to build and acquire land here. The very purpose of the subsidy is to encourage business to come back to the City. This legislation flies in the face of that goal.