Proponents of the so-called Living Wage continue to lobby the Providence City Council, encouraging city lawmakers to adopt a policy that we believe would not only cost the capital city millions of dollars, but drive up taxes – giving residents less of an incentive to live in Providence.
The Living Wage proposal now before a City Council subcommittee is one that has been substantially watered down from a version first presented three years ago. If adopted, this version would pay the lowest level of city workers $10.19 per hour.
The proposal would also apply to employees of businesses that have municipal contracts, and those that have received tax breaks or government subsidies. Businesses subjected to the Living Wage would also be required to pay at least $1.78 per hour toward an employee’s health benefits.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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The latest version of the proposal would also exempt businesses with fewer than 25 employees as well as any businesses with a city contract worth less than $25,000 per year.
The Greater Providence Chamber of Commerce has been adamant in its opposition to a Living Wage.
Chamber officials correctly argue that the idea represents an over-simplified solution to a complex problem and that it would directly harm those businesses that employ the very same people it aims to benefit.
And the result of the proposal, according to the chamber, would include placing companies and non-profits in an "extremely uncompetitive position," where higher labor costs would inevitably be passed along to customers and taxpayers.
The business community also suggests that a Living Wage would also necessitate significant hikes in unemployment insurance taxes and workers’ compensation premiums.
As we have stated here in the past, the Providence City Council may in fact have the authority to enact a wage requirement for city employees and employees of city vendors, it does not have the authority to mandate that private businesses employ or retain a set number of workers.
City businesses do have options if they are mandated to pay a Living Wage. They can reduce their payrolls. They can pack up and move to Warwick or Lincoln. Now what good will that do for our capital city’s tax base.
And remember that the Chamber of Commerce is not alone in its fight against the Living Wage. At a City Hall hearing last week, a group of bankers also argued against the proposal, citing the likelihood that it would drive up housing costs.
The impact of a Living Wage is also very much on the minds of those in the commercial real estate community. This week, in our Focus section, we include a "Commercial Real Estate Roundtable."
The discussion at one point turned to taxes, and soon after that, the Living Wage.
Charles Francis, of CB Richard Ellis, said; "You face something like the Living Wage in Providence and you might as well take all your tax deals and throw them right out the window. It’s my understanding that if the Living Wage were passed, that it could cost the city upwards of $40 million. Do you think Providence can handle another $40 million on top of what will be at some point a big hit for our unfunded pension liability?"
Let’s not close our eyes to what is now happening in Cranston. And let’s not think for a second that Providence can afford a $40 million hit.
Following directions
We applaud the cooperative efforts between the capital city and the quasi-public Rhode Island Public Transit Authority in keeping the ambitious reconstruction of Kennedy Plaza on time and within budget.
The return of bus operations to Kennedy Plaza coincides with a significant change in traffic patterns downtown, all part of the city’s Master Plan for downtown circulation.
The state and the city have done their part – now it is up to the general public to do its. RIPTA General Manager Beverly Scott couldn’t have said it better.
"It is critical for everyone – the general public, RIPTA customers, all drivers in the area and all pedestrians – to exercise caution over the next several weeks while we become familiar with the new traffic and pedestrian patterns…"
On page 16 of this issue, we list several changes to the traffic patterns downtown. For even more details, visit RIPTA’s Web site at ripta.com.
By exercising patience and following directions, we can all take full advantage
of the changes.
