An earnest debate over the soul of Worcester’s economic development efforts has heated up over the last couple of weeks.
At issue are proposed changes to the city’s tax increment financing (TIF) policy for companies seeking tax deals to build or expand within the city. The issue was taken up at Tuesday’s City Council Economic Development Committee meeting.
The administration’s draft policy included local hiring and wage guidelines but placed no requirements regarding those two areas. The proposal called for salaries at least 25 percent above minimum wage, which would be $12.50 per hour, and hiring guidelines of 5 percent women, 10 percent minorities and 15 percent low- or moderate-income workers.
The Worcester Community Labor Coalition has advocated for companies to commit to a $15 minimum wage and hiring quotas of 51 percent women, 33 percent people of color and 33 percent low-income residents.
The committee endorsed the administration’s draft policy at last Tuesday’s meeting.
On Thursday, April 21, 22 members of the clergy, as well as the Worcester Friends Meeting, Worcester Interfaith and Worcester Latino Ministers Alliance, made public a plea to City Manager Edward M. Augustus Jr., Mayor Joseph M. Petty and the City Council to adopt a policy that requires those companies to hire locally and offer a $15 minimum wage.
The letter reads, in part: “We do not think it is too big of a hurdle or discouragement to ask developers that are the recipients of million dollar tax breaks from our community to make a commitment to hiring women, people of color, youth and low-income residents from the Worcester community. Nor do we think it is too big of a request to ask that these same recipients of tax breaks pay these workers a livable wage of $15/hour.”
The same day the Worcester NAACP published a letter, signed by Leonard Cooper, third vice president and economic development chair, critical of the city’s local hiring goals.
“The two main components first were the administration’s goals for permanent full-time jobs. The percentages that were listed for the TIF proposal for Worcester residents were 10% minority, 5% women and 15% low-income. With over a third of Worcester’s population being people of color and women being the majority of our population we found these goals to be unacceptable,” the letter reads.
On Sunday, April 24, 16 local social service agencies published a letter backing a $15 minimum wage and local hiring requirements.
“If people were paid more than the current minimum wage we would have less hunger, less homelessness, fewer foreclosures and personal bankruptcies in Worcester. For this simple reason, we support the Worcester Community-Labor Coalition’s campaign calling for developers that receive tax breaks in our City to agree to hire Worcester residents at a $15/hr minimum wage,” the letter states, emphasis theirs.
As much as we support the spirit of the $15 minimum wage and the coalition’s lofty local hiring goals, for the reasons they state, we do not support their inclusion as a requirement in the city’s TIF policy.
We believe adopting these measures as part of a singular municipal TIF policy would have neither the economic impact its proponents desire nor the effect the city and its residents need.
We believe these two proposals, the $15 minimum wage and local hiring requirements for TIF projects, should be adopted at the state level.
Among the 351 cities and towns in the commonwealth, Worcester’s most direct competition for jobs and economic development efforts are the 25 other gateway cities: Attleboro, Barnstable, Brockton, Chelsea, Chicopee, Everett, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Leominster, Lowell, Lynn, Malden, Methuen, New Bedford, Peabody, Pittsfield, Quincy, Revere, Salem, Springfield, Taunton and Westfield.
MassDevelopment describes gateway cities thusly: “The Gateway Cities are the small and mid-size older industrial cities found throughout the Commonwealth. The state has identified 26 of these cities named for their past and present role as gateways for immigrants. Gateway Cities have physical infrastructure, civic institutions, and human capital that have attracted a new generation of residents who represent the young and diverse demographic future of the Commonwealth.”
According to the “Transformative Development Initiative [TDI] Gateway City Economic Snapshot February 2016,” prepared by MassDevelopment and the Donahue Institute at UMass, Worcester has the seventh highest poverty rate (21.4 percent) among gateway cities. More disturbing still is data that show Worcester has the fourth lowest rate of labor force participation (72.4 percent) among gateway cities. (Labor force participation is the percentage of people 16-64 who are either employed or unemployed but willing and able to work.)
The combination of high poverty and low labor force participation means that, in terms of economic development, Worcester is not faring well among its closest competitors. It then stands to reason that unilaterally adding restrictions would make the city a less viable alternative for businesses.
Think if the opposite were true. If all 25 other gateway cities had as part of their TIF policies a $15 minimum wage and local hiring restrictions but Worcester did not, one would expect that Worcester’s prospects in that environment would improve.
We appreciate the energy and the passion of those who strive for more jobs; equal opportunity for women, people of color and low-income earners; and a livable wage. But the fight should not be limited to Worcester.
Waging and winning this battle at the state level will be better for all residents of the commonwealth while keeping the playing field level for the city of Worcester.