Good Wages Drive Best Economic Development

Published: Austin American Statesman, December 22, 2012


   No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” — Adam Smith, “Wealth of Nations”

   “Do not take advantage of a hired worker who is needy ...” — Deuteronomy 24:14

   Austin Interfaith and the Greater Austin Chamber of Commerce agree on several things when it comes to incentive deals. We both want businesses to come to Austin, and we want them to bring good job opportunities, with a career path, for its workers.

   However, Austin Interfaith draws the line at subsidizing poverty employment on the taxpayer dime. If a corporation wants to open shop in Austin and pay poverty wages, they are welcome to do so without economic incentives. All corporations already benefit from public sector police and fire protection, streets and drainage infrastructure, transit, garbage collection and other goods. For more than five years, our position has been that if we, as taxpayers, are going to invest our public dollars in private enterprises, it stands to reason that we, as taxpayers, should establish a threshold and protocol that prevents hardworking people from being poor and miserable.

   The chamber considers a wage threshold to be an unacceptable burden on the blue-chip corporations it recruits — even the federal poverty line for a family of four ($23,000 per year). In contrast, an analysis by the Austin Business Journal noted that the equivalent “$11 an hour floor would not be a big deal to incentive grabbers.” Just last week, Visa voluntarily accepted that same threshold.

   When the city of Austin grappled with the question of how much to pay its own employees and contractors years back, they chose the $23,000-a-year threshold to keep their workers above the poverty line. Last month, the City Council’s special committee on economic incentives bravely concluded that businesses receiving public dollars should be subject to that same standard, and proposed that future incentives only go to those that pay $11 an hour or more. Their proposal last month not only addressed the issue of wages — it would also address the process.

   The city’s current process for tax incentives involves meetings that last late into the night. Professional presentations stress that the deal will be “cash positive” to the city and bring great jobs to Austin. Austin Interfaith and others testify that many workers will be left in poverty and-or consigned to dangerous working conditions. Corporate representatives sit in shock because they thought this was a done deal. After receiving a letter from the city manager describing the offer and indicating that the deal is recommended for approval, they are here to celebrate — not to be dragged through the mud. Sometime after midnight, the deal is approved.

   Austin Interfaith, whose members include more than 30 religious, labor and educational institutions, wants these made-for-TV dramas to end. We developed a set of standards for incentive proposals to meet all stakeholders’ objectives. If tax incentives are to be granted, they should only be for companies willing to pay an hourly wage of no less than $11 an hour, including to contract construction workers. Companies should hire locally, provide benefits and support training opportunities so that people can advance at work.

   Opponents of the wage floor want to make it optional, suggesting that the city offer an extra bonus to businesses in order to “incentivize” paying at least $23,000 a year. This would lead, instead, to poverty wages.

   The chamber incorrectly claims that US Farathane would not have been eligible for incentives if even one job falls below $11 an hour. Under the committee’s proposal, a company that plans to hire ex-offenders, high school dropouts or other hard-to-employ people would certainly be eligible for an exception and could have their request considered favorably.

   A wage floor is not just about preventing physical privation. Adam Smith’s concern with poverty was about public participation in the life of community — he considered a “necessity” that which would allow one to appear, and to act, in public without shame. Our faith traditions likewise call on us to pay our workers fairly so that they can provide for their families and participate in public life with dignity.

   Austin Interfaith and its member organizations, the Worker Defense Project and LiUNA, support the special committee’s proposed wage floor.

   Higher-paid workers are more productive, loyal, creative and collaborative — and will attract the kind of corporations our city deserves.

   De Cortés and Batlan are members of the Austin Interfaith Strategy Team.