Friday, August 28, 2009

The Neighborhood Retail Alliance on Kingsbridge and a living wage

Over at The Neighborhood Retail Alliance, there's some discussion about the Kingsbridge Armory project and the coalition's demand for a living wage. They point out that this is not just about ensuring that local residents can get good jobs and benefit from the development; it's also about safeguarding the local economy and ensuring that taxpayer dollars aren't used to subsidize big business:
That being said, the demand for a living wage remains as a compelling component of any subsidized retail development. In our view, it is always problematic to use tax payer dollars to incentivize new retail projects; since the end result is usually the shifting of retail sales from existing mom and pop stores to national chains, And, as Stacy Mitchel's seminal work in this area underscores, this kind of policy results in a net loss to the locality.

Put simply, local dollars re-circulate at a much more productive rate that those of national chains headquartered elsewhere. Therefore, if we are going to subsidize chain stores that cannibalize existing neighborhood retailers, the least we can insist on is that these entering retail outlets pay the locals at a proper living wage. Anything less is simply cheating both the neighborhoods and the tax payers in general.

Appelbaum gets it right: "I don't buy that assumption," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. "It's not a matter of whether it's going to be profitable, but the size of the profit they will make." Living wage advocates point to the $40 million in city taxpayer money subsidizing the armory project in the form of tax breaks and city-funded repairs. "If they are taking from government," said Appelbaum, "they have to give back to the community."
For more on Stacy Mitchell's research supporting local business, visit the New Rules.