Committee Hearing, October 5, 2006

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, October 5, 2006 1:00 p.m. - - - PRESENT: COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILWOMAN DONNA REED MILLER COUNCILMAN JUAN RAMOS COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO BILL 060630 - An ordinance amending Section 19-2604 of The Philadelphia Code, entitled "Tax Rates, Credits, and Alternative Tax Computation," by amending the provisions of the new job creation tax credit... RESOLUTION 060653 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings related to economic self-sufficiency. - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2

Good afternoon. This hearing is called to order. This is a public hearing of the Commerce and Economic Committee on Bill 6 No. 060630 and Resolution No. 060653. My name is W. Wilson Goode, Jr., Chair of this Committee. I would note that a quorum is present. Other Committee members here as well include Darrell Clarke, Donna Reed Miller, Frank DiCicco and Blondell Reynolds Brown. The title of the bill, No. 15 060630, an ordinance amending Section 16 19-2604 of The Philadelphia Code, entitled "Tax Rates, Credits, and Alternative Tax Computation," by amending the provisions of the new job creation tax credit with respect to businesses that create new jobs for ex-offenders, all under certain terms and conditions. The title of the resolution, No. 060653, a resolution authorizing the Committee on Commerce and Economic 3 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 Development to hold hearings related to economic self-sufficiency. Our first witness will be on the bill and I'd ask the Revenue Commissioner to please approach the witness table. Let me note for the record that Councilwoman Tasco has joined us as well. Commissioner, could you please state your name for the record and then proceed with your testimony. COMMISSIONER KAMMERDEINER: Good afternoon, Councilman Goode and members of the Committee on Commerce and Economic Development. My name is Nancy Kammerdeiner, Revenue Commissioner, and I'm pleased to be with you today to present testimony regarding Bill No. 20 060630. This bill would amend Section 21 19-2604 of The Philadelphia Code, entitled "Tax Rates, Credits, and Alternative Tax Computation," to change the amount of the tax credit for businesses that create new jobs for 4 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 ex-offenders. The credit for new job creation was established as a demonstration program in February of 2002 in order to provide a credit against business privilege tax liabilities as an incentive for businesses to establish and maintain new full-time jobs. The program was made permanent in June of 2004. At that time, a definition was also added for ex-offenders and there was a provision included that created employment opportunities for ex-offenders as part of the reserve allocation of percent of 16 the credits for businesses with fewer 17 than 25 employees. 18 Interested businesses must 19 submit an application to the Department 20 of Revenue and must agree to create at 21 least 25 new full-time jobs with an 22 hourly rate of at least 150 percent of 23 the federal minimum wage or to increase 24 the number of employees in Philadelphia 25 by at least 20 percent within five years 5 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 of the agreed-upon start date. They must also sign a statement that the company intends to maintain its operations in Philadelphia for five years from the start date. Employment opportunities for ex-offenders must be contracted for a minimum period of at least 180 days. The tax credit was initially established as $1,000 per new job created, but the legislation was amended in November of 2004 to provide for a credit of an amount equal to two percent of the annual wages paid for each new job or $1,000 per new job, whichever is higher. Since the inception of this program, the Department of Revenue has approved applications from 32 businesses for the creation of 2,579 new jobs. The bill before you today would increase the credit for each new job from $1,000 to $5,000 when the new employment opportunity is created for ex-offenders. All other provisions of Section 19-2604 6 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 would remain unchanged. This bill is not expected to materially change the fiscal impact on the City. Based on this and because it will provide supports to ex-offenders reentering the community in order to prevent recidivism, the Administration will support Bill 060630. I'm available to answer any questions you might have.

Thank you, Commissioner, for your testimony. Councilman Rizzo.

Good afternoon, Commissioner. COMMISSIONER KAMMERDEINER: Good afternoon.

Commissioner, the way this is administered, I'm curious, knowing how people can manipulate a system, if a person lays someone off or someone leaves and they're an administrative aide, they then take advantage of the tax credit by 7 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 hiring a new person that's an administrative assistant. How do we know that this isn't being manipulated where they are just changing titles and creating a new position? Is it based on absolute numbers? COMMISSIONER KAMMERDEINER: It's total numbers of the company. When they provide an application to us, we initially indicate that they are within the parameters, but then they go through another process before they actually get their credit certificate. We review books and records to identify how many positions they already have, how many new positions are created. They come back to us after those positions have been created so we compare their initial numbers to the numbers after the job creation. And there are provisions in the regulations for review on a periodic basis during the time that they are entitled to these credits in that five-year period. 8 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 So we do have some cross-checks and they do have to provide additional information to us showing that they've maintained that number of jobs. That doesn't necessarily mean the same person is going to be in those jobs throughout, because we will experience turnover. I'm sure any of these companies will experience turnover.

For clarity of the record, the number of payroll positions has to increase. COMMISSIONER KAMMERDEINER: Correct. And we get a baseline information number from them, and then they have to prove to us that they have payroll that has additional positions before the credits are actually issued to them. So an approved application doesn't necessarily mean that they yet have the credits. They have to demonstrate the filling and maintenance of positions before they get the voucher that they can use for their credit. 9 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

I hear what the Chairman just said, but there are companies that are modernizing. They are becoming more efficient. They're doing more with less. How do you deal with a company that may automate a particular part of their organization, reduce their workforce and then want to employ an ex-offender or a new employee? How do you do that? My question is, it's great, it's a good process, but how do you keep it honest? COMMISSIONER KAMMERDEINER: Well, we can't control what happened before they come to us with the application. The only thing we can look at is how many employees they had at the time they came forward and applied and how many employees they have during the course of their five-year period to execute on the increase in staff. And we need to make sure that they have in fact added employees after the time of the application, not going back further than 10 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 the year before they applied to us.

Thank you, Mr. Chairman.

Thank you, Councilman. Councilwoman Miller.

Good afternoon, Commissioner. COMMISSIONER KAMMERDEINER: Good afternoon.

What is the proof or is there some type of requirement to prove that who you're actually hiring and who you keep is an ex-offender? COMMISSIONER KAMMERDEINER: I'm not sure exactly what we have in the regulations. I would have to double-check that and get back to you, but I believe it's just an indication of the prior incarceration of the individual, and we would be monitoring. I have to say we have not yet experienced that. None of the 11 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 applications that we have received and processed so far have explicitly requested approval for positions for ex-offenders. That doesn't mean that someone couldn't have applied on a straight job creation and have actually employed an ex-offender, but they haven't come to us yet in terms of saying, Our application is on this basis. We would need to have some evidence from them of the prior incarceration of the individuals they were employing.

And is there a time limit? It can be someone that was an ex-offender years ago with 17 a charge? 18 COMMISSIONER KAMMERDEINER: The 19 legislation that was approved by Council 20 on the definition of an "ex-offender" I do not believe had any time limit in there.

It specifically reads "a person previously convicted of a felony or who was 12 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 incarcerated for any conviction or who is currently on probation or parole for any conviction." So if a person was at least convicted of a felony at some point in their life, they still qualify as an ex-offender. COMMISSIONER KAMMERDEINER: As a result, it could have been sometime earlier. Thank you, Councilman.

And do you know -- and maybe these questions aren't for you. I don't know. I don't really know who keeps the records, but the 2,579 new jobs, were they real jobs, jobs that were filled or just positions that were created? COMMISSIONER KAMMERDEINER: Those are the number of positions that people came forward and said they would create during the five-year period from the start date until the expiration of five years. Some of those have been created. We have had verification from 13 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 the employer and have actually issued the credit that they can use against their business privilege tax liability. In many other cases, we're in that interim period while they are filling those positions and coming forward to us for review of their books and records. So it's a combination of things. They're not all created at this juncture.

So the Revenue Department --

And for the record, Commissioner, is it safe to say that probably over 2,000 of those jobs are still yet unfilled? COMMISSIONER KAMMERDEINER: It's probably the majority of them, so, yes. There are a significant number of them that remain to be filled, and only a few credits have actually been exercised at this point. Where the jobs have been filled, we've verified that, issued the credit and they've actually used them. 14 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 One thing I would add, if we find for any reason in an audit that they did not maintain these jobs, we have the right to revoke that credit and require them to pay the amount of business privilege tax that was covered by the credit previously.

The simple point I was making is that there are probably as many as 2,000 more jobs still available for the employment of ex-offenders, because they have to be created within a five-year period. So this is not just a process moving forward, but there are jobs that are already slated to be created under the program that now we would be creating a greater incentive to hire an ex-offender for those jobs. COMMISSIONER KAMMERDEINER: And with this extra incentive, some of those employers who have come forward before may come back and specifically identify them for ex-offenders. That is the 15 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 possibility here.

So the Department of Revenue actually becomes the monitoring agency. COMMISSIONER KAMMERDEINER: Correct. The legislation that was established by Council several years ago put us in that position to review not only the initial applications but to monitor their progress along the way and gave us the authority to revoke those credits if they weren't actually used appropriately.

All right. Thank you. Thank you, Mr. Chair.

Thank you. Councilman Rizzo.

Commissioner, I'm working on a program right now where we have inmates, but let me just back up. Are we talking about people just convicted of felonies? COMMISSIONER KAMMERDEINER: I 16 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 believe the definition references felons.

Just a felony, Mr. Chairman?

I'm sorry. I didn't hear your question.

I'm asking the question are we talking about candidates that have been convicted of a felony?

Not just a felony. The definition reads "a person previously convicted of a felony or who was incarcerated for any conviction or who is currently on probation or parole for any conviction." So not just felonies.

Now, I'm working on a program where we have at our jail 100 inmates that are all programmed for work release. They have gone through the process. They have the ability to leave the jail in the morning, come back at night. Would an employer of any of 17 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 those inmates that are programmed for work release, would any potential employer be able to receive any type of a credit? COMMISSIONER KAMMERDEINER: I would think so if this is worded --

But they're still incarcerated. They're not ex-offenders. They're still serving their time. COMMISSIONER KAMMERDEINER: That, I guess, could be a potential problem here. We'd have to look at that definition a little closer, but there is a potential for it and --

The problem that we're having -- COMMISSIONER KAMMERDEINER: That's a gray area in between.

The problem that we're having up at the jail is the fact that 100 inmates are sitting there with no jobs, that have gone through the process for work release, but the warden 18 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 has no opportunity for employment. This would really motivate people to hire these men and women.

I believe the way the law is written, that would be open for administrative interpretation and regulations. So we could actually create an administrative regulation that allows that.

That would be -- COMMISSIONER KAMMERDEINER: It's not something that's been raised before, and certainly we will look at it.

That's why we have these hearings. COMMISSIONER KAMMERDEINER: Exactly.

So that would be important to me, because this program is really having some issues and it's really depressing to the inmates that have gone through this process hoping that they would get a job. And 19 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 right now we're about to -- not that Fairmount Park Commission can take advantage of it, but there's six inmates going to be employed by the Fairmount Park Commission, and the private sector is certainly our next step, and this would be a great, great incentive to the private sector to employ these inmates that are incarcerated waiting for release. So administratively I'm hearing what the Chairman said here, that we might be able to work this in. COMMISSIONER KAMMERDEINER: I'm looking at the language of the definition. Looking at it in writing instead of just hearing it presented makes it a little easier to deal with. Basically many of these individuals would have been convicted of a felony. It doesn't say how much before, but that would factor in, or who was incarcerated for any conviction or is currently on probation or parole for a 20 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 conviction. So these people have been incarcerated. In fact, they still are under the definition that you have given for it with the work release program, and so I think there would be a way for us to do that within the --

But doesn't it say something about released? They're not released. COMMISSIONER KAMMERDEINER: No, it doesn't say.

It doesn't say that? COMMISSIONER KAMMERDEINER: It says "a person previously convicted of a felony or who was incarcerated for any conviction or who is currently on probation or parole for any conviction." So it says "was" incarcerated. I guess that's the one word here that could be a barrier, but we need to look at it more closely and see what we can do within the regulations on that. 21 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

Maybe, Mr. Chairman, before this comes out of Committee, we can fix that. COMMISSIONER KAMMERDEINER: We base our regulations on the intent of Council, so to the extent that we understand your intent, our regulations would be developed accordingly.

Great. Thank you, Commissioner. COMMISSIONER KAMMERDEINER: You're welcome.

Thanks, Mr. Chairman.

You're welcome. Thank you, Councilman. Are there any other questions for this witness? (No response.)

Thank you very much. COMMISSIONER KAMMERDEINER: Thank you.

Is there 22 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 someone here from the Philadelphia Workforce Development Corporation?

Hello. My name is Susan Kirby and I'm the Director of Ex-Offender Services at the Philadelphia Workforce Development Corporation and I'm here representing Ernie Jones, the President. Chairman Goode, we are pleased to submit this testimony in support of Bill No. 060630 amending Section 19-2604 of The Philadelphia Code. We would also like to extend our appreciation to you for your sponsorship of this bill and urge its passage by the City Council. As you are aware, the Philadelphia Workforce Development Corporation, or our acronym, PWDC, is the City's leading workforce development agency. In our role, we work with both employers and job seekers to develop a world-class workforce, which we believe will lead to further economic development in the region. We provide services to 23 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 welfare recipients as well as to the general public. In doing so, we encounter with both sets of job seekers the problem of assisting the reentry population, or ex-offenders, in finding suitable employment. PWDC is a member of the Philadelphia CareerLink Consortium, which operates the Pennsylvania CareerLink system in Pennsylvania. This system consists of seven comprehensive centers and over access points located 14 throughout the City. Last year, over 15 30,000 contacts were made by residents of 16 Philadelphia. Of that number, we 17 estimate that 30 to 40 percent were 18 ex-offenders. A similar but slightly 19 lesser percentage of welfare clients were 20 also found to be ex-offenders. This Committee and the City Council are well aware of the barriers created by the existence of a criminal conviction when trying to find employment. In spite of federal bonding 24 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 programs and other incentives, we continue to find it extremely difficult to place individuals with criminal records. We commend the City Council when it enacted the ordinance leading to Section 19-2604, which creates a tax credit of $1,000 for each new job created. That ordinance, however, has not adequately addressed the problem for ex-offenders. We think Bill No. 060630, which increases the tax credit to $5,000 for ex-offenders, will serve as a significant incentive for employers to hire ex-offenders, because employers can now receive a tax credit for any new job, regardless of whether the new employee is an ex-offender or not. The current ordinance does not offer the necessary incentive to hire an ex-offender. We think this bill will create the proverbial "carrot" for employers and will lead to the hiring of many ex-offenders. At the same time, we request 25 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 that this Committee look into the definition of what constitutes a "new" job and redefine it so the ordinance 5 serves the purpose for which it was enacted. We have received complaints from employers who state that even if they hire a new individual in the current year, if their overall workforce has been reduced within the last three years, they are not eligible for the tax credit because the job is not considered new. There have also been complaints that the paperwork associated with the tax credit is too onerous. We think changing the definition of "new" job and reducing the paperwork burden will enhance the effectiveness of the new legislation. We at PWDC believe that there exists a strong relationship between unemployment, crime and recidivism, and this connection has been demonstrated in numerous studies. We believe that if the City is serious about addressing these 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 problems, the employment needs of the reentry population must be addressed. This bill will go a long way towards positively addressing those needs. Thank you for the opportunity for presenting this testimony.

Thank you for your testimony, Ms. Kirby, and please thank Mr. Jones again for submitting the testimony. On the recommendation that we redefine the term "new" job, I believe there probably is a little bit of a disconnect between workforce development and economic development. The truth of the matter is, we had to protect against some of the things that Councilman Rizzo talked about. We cannot create a situation under this program where someone fires someone and then hires someone new and have that treated as a new job. We have to have a program where we're actually creating new positions and people are going to those new positions. 27 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 In addition to that, the program is patterned after a State program and we want people to be able to take advantage of both the State job creation tax credit and the local job creation tax credit. In fact, if someone is already authorized to create jobs in the State program, they really don't have to go through most of the process on the local level. If they have a State job creation certificate, they can immediately submit that to the Revenue Department and go into the process of creating new jobs. So, one, we are trying to safeguard against fraud, safeguard against people firing people and then hiring new people for the credit. And then the program is patterned in a certain way after the State program, and essentially changing the program at this point midstream, after the creation of several thousand jobs, just wouldn't work. I will at some point address with 28 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 the Administration and the Revenue Department whether we can look at the paperwork, but, once again, that's probably more of an administrative regulation which would not necessarily affect how this legislation is crafted. But, again, we thank you for the testimony.

Thank you.

Are there questions? Councilman Rizzo.

It's been asked of me are we now making the playing field not level. Are we giving an ex-offender an advantage over the -- how do you answer that? How do you explain to someone now that wants to get a job, not an ex-offender, when the ex-offender now has the leg up? I'm not suggesting I agree with that question, but it was asked of me.

Oh, I can appreciate anyone asking that question, 29 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 and I'm sure we've encountered it with the welfare-to-work population with the tax credits and I guess generally with the disadvantaged population. You're absolutely correct. Why should we help an ex-offender? Since 9/11, ex-offenders have found it more and more difficult to find employment. The latest statistic is over 80 percent of employers now do criminal record checks, and employers are saying they won't hire people with an offense even though the crime had nothing to do with the job. So what we're hoping this bill 16 will do is, it will encourage employers to look at qualified ex-offenders for the job, whereas now 80 percent of them will not. If an ex-offender has the knowledge, skill and ability to do the job, they're automatically being disqualified because of their criminal record, and I'm hoping that this tax incentive will open the eyes of employers to at least consider them. 30 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

I agree with you. I'll give you a quick example. A particular airline in our City was having significant issues with baggage handling. I had an opportunity to bring a workforce almost immediately, but because of FAA regulations, they would not allow an ex-offender or a person that's programmed on the work release to go and help solve a problem, because they kept saying, We can't find people, we can't find people to do this work. Well, they couldn't find them because they weren't paying them enough, but this was a natural -- but there are lots of obstacles. As you said, 9/11 has changed the way we live.

Well, I think Homeland Security, their rules and regulations would not allow anyone with a criminal record to be hired --

That's correct.

-- at an airport facility. 31 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

That's exactly correct.

So there are some realities of life that this tax incentive will not resolve because of 9/11, but I think it could open the doors for other areas of employment.

Thank you.

Thank you.

Thank you, Mr. Chairman.

Thank you, Councilman. Councilwoman Miller.

Thank you. This is an issue that's near and dear to my heart. It breaks my heart when I go out and so many ex-offenders -- some people with misdemeanors and just small crimes can't find employment. And recently I actually had someone that actually has worked for about 30 years, retired, forgot all about an assault when 32 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 he was years old, applied for a job and the assault pops up, and he was pretty much devastated. But I'm really glad that Workforce Development -- I call you PIC. I still call you PIC.

I know. It's the 9 Philadelphia Workforce Development 10 Corporation. 11

-- 12 (continued) has a special unit to deal 13 with ex-offenders and employment. 14 How many calls do you get? How 15 many people are you serving? 16

Well, at Suburban 17 Station CareerLink in the last 12 months, 18 we've given intensive services to about 19 800 ex-offenders. So that's one of seven CareerLinks in Philadelphia. I'm fortunate, I have two dedicated staff people that all they do is work with ex-offenders and do job development with employers, and I would say we probably have a 15 to 20 percent success rate in 33 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 helping ex-offenders get jobs.

And then the others are just left to --

We find eventually that they do find employment, but they don't get back to us. One of our big problems is, within 30 days, 35 percent of the ex-offenders we serve cannot be reached at the phone number that they gave us, so it's difficult for us to do case management and retention with them.

All right. Thank you.

You're welcome.

Are there any other questions of this witness? Councilman Ramos.

Thank you, Mr. Chairman. Not a question, but for the many years that I worked as a construction worker, early on -- I was still a fairly young man when I came into the industry -- I found out months later 34 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 that the hardest working and the quietest and the most religious people on that job site with me were ex-offenders.

Oh, I don't doubt it.

And then as we got to know each other as the months went by, they're sharing their stories of their past and how lucky they were to be able to have this job. And I still associate with many of those men that I worked with and we get together once a year, and they have a nice car, they have nice families, they're still as polite as ever, they've gotten gray like me, and they got sores and all kinds of aches and pains. We're living in very difficult times where a person that has committed a crime or has been incarcerated, that there are people that come out and say, Well, I should have never done that, and are remorseful and want to start a new life, and unless we assist them in 35 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 starting a new life, the anger and then some of this stuff that was there years ago will come back to permeate in the heart and the minds of people that have had that past. So I'm a proponent of this because I've seen it work, and I am glad Councilman Goode is taking this on and Councilwoman Donna Reed Miller, who has been the champion of this for so many years, that we're moving in this right direction. Thank you.

Thank you.

Thank you, Councilman. Thank you, Ms. Kirby. Is there a representative from the Philadelphia Workforce Investment Board?

Thank you, Mr. Chairman and members of the Committee. My name is Lauren Hirshon and I'm here from the Philadelphia Workforce 36 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 Investment Board to read the written testimony that was submitted by Sallie Glickman for this hearing here today. And I have with me both Anne Price and Cinda Clyde to answer any specific questions that you may have about the research within this testimony and to really any questions that you may have back to Ms. Glickman. Thank you, Mr. Chairman and members of the Committee on Commerce and Economic Development, for inviting Sallie Glickman to offer written testimony for your hearing today. Ms. Glickman's testimony comes from two perspectives: as CEO of the Philadelphia Workforce Investment Board and as a member of the National Reentry Policy Council, under whose auspices Chartering the Safe and Successful Return of Prisoners to the Community was published in 2003. Ms. Glickman regrets being unable to appear before you today to personally convey her strong support for 37 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 this proposed ex-offender tax credit bill. Successfully integrating people released from prison and jail into the workforce is critical to our economy. However, obtaining employment is often a challenge for ex-offenders given the stigma attached to having a criminal record and the additional barriers that this population typically faces. Allowing businesses to claim a tax credit of $5,000 for new jobs that are created to provide employment opportunities for ex-offenders would help to level the playing field for this group, and it would give employers an opportunity to look past the record and look at the individual. According to the Pennsylvania Prison Society's 2002 Annual Report, every day more than 100 men and women reenter, returning to communities in Philadelphia from the City and State prison systems. Between 2000 and 2002, there was a 20 percent increase in 38 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 parolees to the Philadelphia area. Returning parolees, along with others already in the community under supervision, amount to approximately 51,000 individuals in Philadelphia on any given day with active connections to the criminal justice system. For this group of citizens, a criminal record creates a huge obstacle to employment. In fact, studies have demonstrated that employers are much more adverse to hiring ex-offenders than they are towards any other disadvantaged groups. In a study conducted by Harry Holzer from the Georgetown Public Policy Institute, over 90 percent of employers surveyed were willing to consider filling their most recent job vacancy with a welfare recipient, whereas only 40 percent would consider doing so with ex-offenders. In addition to the barriers associated with having a criminal record, research suggests that people in prison or jail have low levels of educational 39 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 attainment, have limited job skills and report low earnings prior to their incarceration. About 55 percent of ex-offenders released in Philadelphia have not completed high school, making the percentage of ex-offenders without a high school diploma twice as high as the City average. In one national study, about 30 percent of inmates reported that they were not working at the time of their incarceration, and for those that were employed, nearly 50 percent were earning less than $600 a month immediately prior to incarceration. These particular barriers situate ex-offenders at a severe disadvantage as they must compete for jobs in a labor market that is already crowded for undereducated Philadelphians. For Philadelphians who failed to complete high school, unemployment rates range from 17 percent to percent, making 24 high school drop-outs twice as likely as 25 high school graduates to be unemployed 40 10/5/06 - COMMERCE - BILL 060630 - RES.

060653 and five times as likely as college graduates to be unemployed. Not surprisingly, those with low levels of educational attainment also experience longer periods of unemployment. Moreover, because of their criminal record, ex-offenders are often unable to obtain State licensure and, therefore, ineligible for a number of jobs. In Pennsylvania, individuals with criminal records are barred from 43 different occupations, ranging from accountants to veterinarians and including jobs that require contact with children, certain health services occupations and employment with firms providing security services. Many of these jobs represent Philadelphia's high growth occupations. In fact, seven of the ten highest job growth occupations in Philadelphia are closed to those with criminal backgrounds. Further exacerbating the situation is the fact that the 41 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 communities that receive released individuals are already often ill-prepared to absorb them into the job market. On average, each day more than 100 men and women return to communities in Philadelphia from the City and State prison system. Generally these ex-offenders are returning to the very same neighborhoods that have a large concentration of people disconnected from supports, networks and knowledge that lead to employment. The pervasive poverty, joblessness and segregation in these neighborhoods can aggravate the conditions that gave rise to criminal behavior in the first place. Several cities have found that unemployed individuals are more likely to be arrested and incarcerated. Although ex-offenders have more barriers to employment, research suggests that payoffs for incorporating ex-offenders into the labor force are especially high. According to a report 42 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 released by the Consensus Group on Reentry and Reintegration of Adjudicated Offenders, employment is the strongest and most consistent predictor of recidivism. Other studies have found recidivism rates of participants in prison education, vocation and work programs to be to 60 percent lower 10 than those of non-participants. This is 11 a significant difference given that 12 approximately two-thirds of people 13 released from prison or jail were 14 subsequently rearrested within three 15 years of release. These rearrests 16 generate significant fiscal costs to the 17 criminal justice system, human costs in 18 terms of victimization and societal 19 costs. 8 million annually in correction costs. Furthermore, rather than 43 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 draining community resources, safety and morale, prisoners who return to the community with support systems and options can become productive members of society, thus saving resources, strengthening family and community ties and expanding the labor force and economy. Regardless of the clear economic and societal benefits to improving ex-offender employment outcomes, without employers who are willing to hire ex-offenders, there is little opportunity for sustainable change. The passage of Bill No. 060630 to amend Section 19-2604 of The Philadelphia Code, entitled "Tax Rates, Credits, and Alternative Tax Computation," is a clear step in the right direction. According to the Philadelphia Consensus Group on Reentry and Reintegration of Adjudicated Offenders, given the choice, most employers would 44 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 decide not to hire an individual with a criminal record even if the nature of their conviction bears little relationship to the position sought. By amending the provision of the new job creation tax credit to allow businesses to claim a greater tax credit for new jobs that are created for ex-offenders, the bill offers a clear incentive for employers who are willing to take what they perceive to be the increased risk of hiring men and women who have been in jail.

In the past, it has been difficult to assess the effectiveness of similar targeted jobs tax credits that are offered to encourage private sector employees to hire workers from at-risk groups. Nevertheless, as part of a 1984 study released by Dan Rostenkowski, Chairman of the House Ways and Means Committee at the time, a survey of employers who would use the targeted jobs tax credit found that approximately 45 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 one-third of respondents claimed that the tax credit had significantly influenced their choice of which workers to hire, and another percent of respondents 6 said that it influenced their choice 7 slightly. 8 To ensure that the tax credit 9 reaps maximum benefits for employers, 10 employees and the City of Philadelphia, 11 please accept the following 12 recommendations for consideration in 13 implementing the tax credit: 14 Awareness: A targeted 15 education campaign to publicize and 16 explain to employers and those who work 17 with employers in the City the financial 18 incentives that are available for hiring 19 ex-offenders would be useful. Further, 20 the campaign could also address employer 21 concerns about hiring ex-offenders and 22 provide information on the federal bonding program which minimizes hiring risks by providing insurance against theft, forgery, larceny and embezzlement 46 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 at no cost to employers. Ease of use: The tax credit will go a long way to encourage employers to give ex-offenders an opportunity to compete for jobs. To realize the full potential of the credit, care should be taken to ensure that the administrative burden to claim the credit is minimized. In a broader sense, Ms. Glickman also urges the Committee to consider making additional investments to improve employment outcomes for ex-offenders. The issues pertaining to ex-offender employment has an integral impact on the economic development of our region and our City. As the Philadelphia Consensus Group on Reentry and Reintegration of Adjudicated Offenders noted in their blueprint for action, more needs to be done to remove barriers to employment of people with criminal records, including informing ex-offenders of their rights, linking employment opportunities with housing regulations to 47 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 ensure that expectations and schedules for people who are released into halfway houses do not interfere with residents' abilities to fully participate in job opportunities, developing a transportation subsidy or program to assist ex-offenders who must commute to work, leveraging tax credit and bonding programs for large-scale hiring, and more generally, improving the coordination among public systems with which ex-offenders must engage, and offering employment counseling and services at touch points for ex-offenders such as adult parole and probation officers and the courts. Thank you, Councilman Goode and members of the Committee, for leading this effort to assist ex-offenders as they struggle to enter the labor force. Ms. Glickman appreciates your efforts and looks forward to working with Councilman Goode to elevate these issues and to help our City's ex-offenders to realize their 48 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 potential as involved and contributing citizens.

Thank you. Please thank Ms. Glickman for her testimony. Are there questions for this panel?

What does the Investment Board actually do? Is that the board that Representative John Myers is on? Is he on that board?

No. 14

I'm sorry I missed most of your testimony, but what is it that the Investment Board does?

The Philadelphia Workforce Investment Board is a volunteer body that's appointed by the Mayor to oversee the public workforce system and to --

Public workforce system?

The unemployment centers, training programs and things of 49 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 that nature.

So would you be the folk that pretty much sets an agenda for what types of training we need here in Philadelphia?

Well, a small portion of that training. We actually work with PWDC and the Philadelphia Youth Network. They actually provide the services. We are more of the policy body of public workforce funds, but we do play a role in looking at the kind of training programs that are used for specific federal dollars for training.

Based on employment outlooks, future employment needs?

Yes. Part of what we've been doing this entire year is really taking a close look at our labor market here in Philadelphia and really want to tie that more closely to how we look at training opportunities. Really what we're really finding is really a 50 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 dire need for folks in Philadelphia who do not have a high school diploma, that basically many of those people are not working. We are also looking at our labor market in terms of growing jobs, occupations in industries, because our economy hasn't grown as much as other parts of the region. So all of that we're looking at in terms of looking at training opportunities.

Councilwoman, to answer the question a bit, as a result of federal welfare-to-work legislation, other workforce legislation in the '90s, the federal government required investment boards to be set up and giving the employment power to the local official, which in this case is the Mayor. So there are investment boards set up as policy entities. And so technically the Workforce Investment Board is the policy entity even more so than PWDC and its 51 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 board.

Okay. So basically would one of your roles be to figure out what types of training programs we should have based on the industries that are growing here in Philadelphia and in Pennsylvania?

Yes, exactly. That's exactly what we do.

So is there some type of written document that says these are areas that we really need to try and get people get programs created for? For example, someone said to me that there's really a lack of people in the automotive technology area and there's going to be thousands of jobs that will be available. Well, how many programs do we have that are training people that will be ready to take those positions? I used to work in employment and training, and back then, we were a service industry. We were doing a lot of 52 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 clerical things, clerical training. And I don't think I've ever heard somebody say, We really need to hurry up and find some people that we can train to take these automotive jobs, other than the commercials of the training programs that you see on TV. I have not heard that from a public entity.

We're looking at that industry. There is some growth there. I think one of the things to remember is, our dollars for training are shrinking dramatically, significantly. So we have actually much more demand for training than we're able to provide. But that's certainly one of the industries that we've taken a look at for training.

I think that's an industry that whether you're an ex-offender or not may not matter, and it's also well paying.

Right.

We can provide you with some additional information on that 53 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 actually, because at our September Board meeting, which was just a few weeks ago, we had a special presentation by one of our Board members who has personal experience in that industry and is now in the legal profession. So we could provide some more specific points for that purpose.

I just wondered, because I've never seen sort of, for lack of another word, an agenda or a checklist or something about what we should be following in terms of training folk so that we can prepare a good workforce.

We'll be glad to provide your office with that information so you can take a look at some of those occupations.

All right. Thank you.

Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, 54 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 Mr. Chairman. Just for your information, there is an organization that has been created, probably in existence about two years. It's made up and funded by many of the industrial companies that still reside in Philadelphia. Most of them are smaller, but there's some larger folks. Coca Cola and others are involved, but it's primarily smaller industries that have come together, and I had a briefing with Councilmembers several months ago. The name of the organization at the moment escapes me. I'll supply it to the Chair. One of their major concerns is, they are not able to fill their job positions because young people coming out of high schools just don't meet the criteria, even for some of the most basic jobs. They've hooked up with the Board of Education, speaking to Dr. Vallas about this, but there's also a need for some folks who may have been released 55 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 from the institution that has some experience in die making or aluminum plating or something like that that may fit in. And they're looking out, they're reaching out for people who are in need of work, because they need the employees. They don't want to leave the City of Philadelphia, these companies. They want to stay here, but the job pool just isn't what it is and they're having a serious problem with maintaining their operations in the City.

I believe you're referring to the Urban Industry Initiative? COUNCILMAN DiCICCO: Yes. Thank you.

I actually spoke to Steve Jurash about this bill a couple weeks ago and we're actually going to bring them in to organize the manufacturing groups. COUNCILMAN DiCICCO: Thank you. Thank you. 56 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

Are there any other questions for this panel? (No response.)

Is there anyone else to testify on this bill? (No response.)

Seeing no 9 one else, we will move from our public hearing into a public meeting to consider Bill No. 060630. The Chair recognizes Councilwoman Tasco for a motion on Bill 14 No. 060630.

Mr. Chair, I move that Bill 06 --

Excuse me.

Excuse me. Yes, sir.

Mr. Chairman --

Please identify yourself. We'll move back into our public hearing. Would you please identify 57 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 yourself for the record.

Yes. My name is Arnold Walker. Prior to January of this year, I have been on Pennsylvania's Death Row from March 31st up until January the 3rd. After the court did their thing, the door opened up and I was on the street. We're speaking about ex-offenders. I am an ex-offender, or should I say ex-prisoner, because I wasn't an offender. What I went through from January until this day trying to get housing, income, job, I found myself understanding why so many young people are coming in and out of jail, because I sat on the corner at 15th and Market and I was crying. I didn't have identification. I didn't have no type of support other than my family, which was my daughter. I believe that giving a man a job when he first comes out of prison is not his first necessity. He has to have 58 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 somewhere to live. He has to have some understanding he's going to have someone to watch over him. When he comes into the prison, they give him a format that he has to follow. He comes out on the street, he don't have that format. I listened to Councilman Rizzo. He was speaking about the county prisoners. From my understanding, I say from the next two or three years, we're going to have a lot of State prisoners coming home, and when it comes time to fill out applications for a job or for anything, it states right off the bat what you were arrested for. And they have what they call core programs that starts in the jails, but when they get out here in the street, there's no one there to guide this person through this. So when it comes time to fill this application out, he don't know what to put down on the application, other than, yeah, I was arrested or I did this or I did that, and the employer, he looks at 59 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 him and wonders should I hire this man. Now, I heard this $5,000 incentive --

Mr. Walker, I'm going to ask you to summarize your testimony and speak specifically to the tax credit, for two reasons. Let me tell you, this Council has had broader hearings on comprehensive services of ex-offenders and plans on having future hearings on that. There's also a criminal records bill that's been introduced in Council by Councilwoman Miller that we expect to also entertain. So there will be lots of opportunities for us to deal specifically with the criminal records bill and to deal with the issue of more comprehensive services beyond employment and beyond tax credit, but we need specific testimony on the tax credit at this time so that we can move forward to the other resolution 24 as well.

Well, one 60 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 question, then. Will this tax credit be, this system that ya'll are putting together, set up for the State prisoners?

This tax credit is available to all businesses that pay the business privilege tax as a credit if they qualify under the program. So it does not distinguish in terms of where a person was incarcerated.

Or the crime?

Or the crime.

Okay. All right. Thank you.

Thank you. We will again move from our public hearing into our public meeting to consider Bill No. 060630. The Chair recognizes Councilwoman Tasco for a motion on the bill.

I move that Bill 060630 be reported out of Committee with a favorable recommendation 61 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 and a request for a suspension of the rules so that this bill can have its first reading at the next Council session. (Duly seconded.)

All in favor? (Aye.)

Those opposed? (No response.)

Bill No. 14 060630 is reported out of Committee with a favorable recommendation and a suspension of the rules to allow first reading at our next Council session. We will now return to our hearing on Resolution No. 060653, and our first witness on that resolution is Carol Goertzel, PathWays PA. Let me read the title of the resolution again. A resolution 24 authorizing the Committee on Commerce and Economic Development to hold hearings 62 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 related to economic self-sufficiency.

Thank you very much, Councilman Goode and the Councilmembers here today, and thank you for allowing us to appear before you with the people who are going to testify today on behalf of the Self-Sufficiency Standard and on behalf of the 21st Century Minimum Standard Wage bill that's been presented by Councilman Goode. You see before you a few people who are going to testify after myself, and I just want to add there are some additional people who would like to speak. Lance Haver, the Philadelphia Director of the Office of Consumer Affairs; Kristin Shiffler from Congreso. And next week you'll receive testimony from the Philadelphia Workforce Investment Board and from Tom Cronin, President of AFSCME District Council 47. Again, good afternoon. My name is Carol Goertzel and I'm President and CEO of PathWays PA. 63 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 This year, PathWays PA will serve over 4,000 low-income women, families and their children, and we offer education training, truancy, delinquency prevention, child abuse neglect prevention, parenting and, most important of all in some ways, family financial education in Philadelphia and Delaware counties. We have sites in the northwest area where we have a lot of truancy prevention services in West Philadelphia, which is the home of our teen parent program, in North Philadelphia, which is our educational employment center where we'll be opening an earn center, and in the Fishtown area, which is the base of our in-home service and community teen parent program. As we have all learned in the last few months, about 37 percent of Philadelphia's children live in poverty. That means more than one in three of our children live in families who struggle each day to put food on the table and a 64 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 roof over their heads, and this is without including families who live just above the poverty line but still have problems making ends meet. And I'll just say a few words about the poverty line. Our experience in working with at-risk families has given us the opportunity to see not only that families need family healing from issues of abuse, neglect and family stress, but they also need to earn enough money in order to be able to support their kids, heat their homes and be able to have maybe a little bit of a personal safety net so when they lose their jobs, they're not out on the street. In many cases, families who try to reenter society with their children and be united with these children face problems even more difficult. To change the poverty and the community violence that we're all seeing that these families face, they must have an opportunity to earn a wage that will bring them out of poverty and towards 65 10/5/06 - COMMERCE - BILL 060630 - RES. 72 is a beginning and is not an end for families to support themselves. And we all can think of what $21,000 would do if we were supporting our families, and it certainly is better than $10,000, which barely will pay the rent, but it's not such a high wage that it should not be considered and implemented. Across the State of Pennsylvania, PathWays PA is best known for the Self-Sufficiency Standard which you all have here and it was developed by Dr. Diana Pearce at the University of Washington, along with a national organization, WOW, that has now developed 66 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 35 standards across the union. On , you'll see Table 17, which talks about Philadelphia. The poverty guideline, which we all know is the FPL, is really flawed as a measure of income adequacy. And it's flawed because it was developed based on food costs at a time in the '50s when food costs were really considered to be a third of what a family needed to support itself. As we know now with the high transportation and housing and child care costs, that is no longer true.

And it's also true that the federal poverty standard was developed based on the assumption that there were two adults in the family. Two parents is what they were considering at that time, and one of them was staying at home. As we know now, we have a lot of single-parent families, mostly women but not only, and we have a lot of two-parent families where most people are working, where both parents are working and where 67 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 some parents are having to work two jobs. You'll see that our yardstick, the standard, is different in that it includes the real costs that it takes to work and to support a family, and these costs vary throughout the State. And so we have included a table for each of the Commonwealth counties. The costs in the standard are varied by family size and age of the children. The table in this report has eight family configurations, and if you go onto our website and look at the online budget worksheet, there are 70 family configurations behind the computer screen. If you look at that for a minute, you will see that for a single person, you need to be earning $17,000, almost $18,000 a year, and that's assuming that you're only paying 669 for housing, including your utilities. So it's including some of the rise in utilities, not the total rise in utility. 68 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 A family consisting of one adult, one infant and one pre-schooler requires $44,000 to get by. That's over $20 an hour. Assume for a second that the adult is a City employee, somebody in your own office, and this -- if you look at what we've included and read some of the language of how we've developed the standard, you'll see that the standard includes no car payment, no family vacations, no eating out, no hundred dollar sneakers for your teenagers, no 14 baby-sitters so that you can, if you'll excuse me -- many of us have had kids -- keep your sanity by going out and paying for a baby-sitter when you don't have a family member to do that, and it's just basic apartment or home, with food on the table, heat, safe child care that you are paying for and a SEPTA TransPass to get to your job. So the $20 an hour is not paying for your savings and it's also not paying for your retirement. It's almost 69 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 three times the amount of the State's new minimum wage, and it's about twice the amount of the proposed wage in Councilman Goode's bill. For many families living below the self-sufficiency wage, any increase, including the increase that we're talking about to over $10 an hour, would give them an opportunity to meet more of their needs, and those dollars circulate many times over. We know the people in the neighborhoods who live in all the neighborhoods of Philadelphia spend most of their money in the neighborhoods in which they live. So when you set a bar for Philadelphia City contracts at minimum at over $10 an hour, about $10 an hour, that helps not only the big boxes but all the neighborhood restaurants, all the neighborhood stores, all the neighborhood workers. If people are working below the self-sufficiency wage, they may need work supports. So we all need your support 70 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 always and the support of the State politicians to make sure that the work supports such as LIHEAP and support for child care assistance continues and continues on a scale so that people can keep working and not have to leave their job because they don't have child care. 15, she'll be able to meet 39 percent of her family's needs. With all of the work supports mentioned, she will almost be able to meet her family's needs. You can see on Table 7 on 26, we've outlined what happens when somebody uses all of what we call the work supports available. 72 an hour, they will be able to support 51 percent of their annual needs, half of their needs.

If somebody uses at that level over $10 an hour all of the public supports, the sliding scale for child care assistance, for which there is 71 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 not enough money, Medicaid or CHIP, she or he can meet 95 percent of their needs. So raising the bar to $10 an hour does make a difference. It means that a single parent with two children or with one working parent if one person is unemployed uses all the public supports and earns an income and then also gets the earned income tax credit that many of us are working on and worked with the Coalition on, they will be able to meet their needs, and that's really different. They won't be able to like have lots of expenses. They won't be riding high, but -- they may not be riding at all except for public transportation, but they will be able to meet their needs. A working family can earn money above the poverty line and still qualify for work supports, which you all know. Food stamps are available up to 130 percent of the poverty level, but once this family earns over 16,600 or almost $17,000, they lose many of the work 72 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 supports, and a three-person family that we're talking about will lose their food stamps at 21,580. There are some things -- and that's a federal issue for the food stamps. The food stamp window needs to be raised. 72 an hour will at least help that family be able to feed themselves without needing to use food stamps so the food stamps would be available to those in greater need. Raising the wage may not bring every family to self-sufficiency unless we start to look at big box issues like they have in Chicago, which we've all read about, but if we raise it at least for contractors to the City, it will bring families closer to self-sufficiency. And by using the standard, we can see the wages that people need to make to make ends meet and 73 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 discover what is needed to help people along the process. The standard we do every two years, and the figures that you see here are based on federal and State figures. So we don't just make up what it costs for child care. We look at the figures State-wide. We don't just make up the fair market value for rent. We look at HUD and what they say is fair market value. We don't just look at food. We look at the Department of Agriculture. We need education and training. We need more adult education and more training and affordable housing. That's really clear. But for housing to be all affordable, even the new minimum wage that's a great step forward is really not enough. So I thank you all for giving me the opportunity and giving the opportunity to those who are going to testify along with us to ask your support of implementation of the 21st Century 74 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 bill so that we can really make Philadelphia a standard for all families. This is not all families, but it is a beginning, and this will put Philadelphia on the map of saying that our hard-working families need to be able to be on the road to self-sufficiency. And the book that we're talking about and that we're giving you really gives you an economic model for why this is so important. I thank you very much. )

Thank you. Our next witness is Tarrie Fleming. Please state your name for the record and then proceed with your testimony.

My name is Tarrie Fleming. I would like to thank you, Councilman Goode and members of the Council, for holding the hearing on the Pennsylvania Self-Sufficiency Standard. 75 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 Again, my name is Tarrie Fleming and I'm the Administrative Assistant at PathWays PA office at 1324 Clearfield, which is in the heart of North Philadelphia. I am also a single parent with a 12-year-old daughter, which her name is Karima. I'm also a full-time student at the University of Phoenix since May of '05. I have a year and a half to go before I graduate with my Bachelor's of Science in business management in August of '08. The reason why I am testifying here today is to tell you how making $10 an hour is not enough to meet my basic needs. In fact, I earn $14 an hour at PathWays PA, which is more than most non-profits will pay, but it is still not enough. According to the Self-Sufficiency Standard of Pennsylvania, I'm a single parent with a school-age child and should earn at least 14.84 an hour. While this is not far off, the standard's estimated wage is 76 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 still not enough to meet our basic needs. Remember, the basics assumes public transportation, fair market rent, child care, et cetera. I can tell you that I drive a vehicle and have to pay car insurance and life insurance, after-school care and much more for rent, electric and gas. Just like the clients I work with at PathWays, I am one paycheck away from being homeless just like they are. I am not able to save money to purchase a home, save for Karima's college education or even save enough for emergency situations. It is so frustrating that I earn too much to be eligible for food stamps, for child care subsidizing or any grants for my utility costs. Currently, I receive financial aid and have a student loan to carry me through my studies. I barely have enough to purchase textbooks, which can cost up to $200. I work hard and I feel like I 77 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 am penalized because I am trying to be self-sufficient. Self-sufficiency means to me that I have to take care of myself and Karima without welfare. And I can feel comfortable in saying that I'm okay where I am. I don't have to worry about being on welfare. I don't have to worry about being homeless or dependent on others to take care of me or my daughter. I know that to become self-sufficient I need to finish my degree. This motivates me to travel one hour after work to Center City for evening classes Tuesday and Thursday nights. I am sacrificing time with my daughter now to set examples for her to provide her with a better life. The standard is a good measure for what it actually costs to live in Philadelphia and meet basic needs. I can tell you that it is conservative measures that urge you to consider this important document as you make further policy decisions that affect the quality of life 78 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 for Philadelphia residents like me. Thank you.

Thank you, Ms. Fleming. (Applause.)

Any questions? (No response.)

Our next witness is David Fair.

Good afternoon. I'm David Fair, Vice-President for Community Impact at United Way of Pennsylvania. I can't tell you what a pleasure it is to sit before you and not have to defend the DHS budget. Thank you for this opportunity to come before you on behalf of the Board of Directors of United Way of Southeastern Pennsylvania, our 120,000 annual donors and our 5,000 volunteers dedicated to improving the quality of life of all of the residents of Southeastern Pennsylvania. 79 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 Since 1921, United Way has raised and invested several billion dollars of financial contributions and countless hours of volunteer energy to relieve the pain and suffering of vulnerable people throughout our region, and in those 85 years, we have learned again and again two very obvious lessons. The first, most of that pain and suffering grows out of poverty, the unequal distribution of our community's prosperity. We've learned that not all of us have an equal opportunity to support ourselves and our families. The second, simply expanding the system of health and human services will not in itself solve the crisis of poverty facing our region. Simply spending more and more taxpayer dollars on treating and managing the symptoms of the disease of poverty will just not work. Clearly, we do inadequately fund social and health services, and many 80 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 are victimized because we've learned to tolerate the decay of the basic safety net in recent years, but in the end, we've learned that the real solution to this challenge is not going to be found in more services. It's to be found in more taxpayers. The best way to reduce the tax burden and increase the health and safety of our community is for more of our neighbors to be able to be taxpayers, to become self-sufficient, to be able to earn a reasonable wage whatever their employment, to become productive members of the regional workforce. This is not only a simple lesson; it's also an obvious solution. More people able to support themselves is the foundation of what we all claim we want to see, safer neighborhoods, better public education, lower taxes, a thriving economy in whose prosperity we can all share. The Self-Sufficiency Standard for Pennsylvania prepared by the 81 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 State-wide coalition led by PathWays PA is among our most important tools in the collective effort to achieve these goals. PathWays and its colleagues deserve our gratitude for doing the kind of analysis that brings into stark relief the facts of poverty and of the lack of true economic opportunity in our region. The data collected in the Self-Sufficiency Standard shows that for the vast majority of the poor in our community, their challenge is not their own ignorance or laziness or distorted priorities. It's that it is becoming increasingly difficult for many of us to simply keep up, to be compensated adequately for our work, to meet the basic needs of our families and ourselves. Others will share with you today more specific details of what the Self-Sufficiency Standard teaches us about the challenge facing our community, facts like the reduction in public 82 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 housing supports just as the cost of housing rises far beyond what anyone could call affordability, increasing the number of homeless on our streets at a time when we are told our economy is improving, facts like the increase in the cost of meeting practical daily needs for families in our own City by between 30 and 56 percent just in the last two years, facts like the inadequacy of federal poverty guidelines, which in Philadelphia state that a two-person household should be able to survive on $13,200 per year, when in the real world this small family would need two and a half times that to avoid instability and the need to depend at least partially on taxpayer-supported public services.

At United Way, we have always said that our mission is to mobilize the caring power of people, to improve the quality of life in our region. On our own we cannot treat enough symptoms to change these realities. We cannot employ 83 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 enough people to raise everyone out of poverty. We don't run the schools and we don't run the small and medium and large businesses that have the jobs that would mean success for tens of thousands of people needing to make a living wage. What we do have, though, is a responsibility. We were formed by the business community almost a century ago to bridge the gap between those in need and those with the resources and the power to help them reduce their need and encourage their independence. And in the spirit of that commitment, we pledge to renew our dedication to bring the power of our volunteers, our donors and our allies to bear on confronting the challenge that the growing disparity between prosperity and poverty in our region represents. The Self-Sufficiency Standard for Pennsylvania provides United Way and should provide to government, foundation and others a platform on which we can 84 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 sharpen our priorities and more strategically invest our resources. We need to increase our investment in the many successful programs in our community that help people develop skills that will earn them a living wage. We will focus more of our energy on reengaging the tens of thousands of young people between the ages of and who have neither 11 completed school nor found work, a 12 strategy we believe will not only improve 13 their chances of success but will have a 14 positive impact on our community's safety 15 and our economy's growth. 16 We will seek to raise the 17 consciousness of the community on these 18 issues, raise money, mobilize volunteers, 19 use our clout, do our best to help our 20 community understand it will only be when 21 we all have a chance at self-sufficiency 22 that we can address the social and 23 economic realities that undercut the 24 health of our region in so many ways. The Self-Sufficiency Standard 85 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 undermines the fictions we as a society often choose to believe and that poverty will always be with us, that opportunity is available equally, that failure to take advantage of that opportunity is a personal one for which the larger community bears no responsibility. We should all be grateful to those who have helped us burst that bubble of complacency. Economic self-sufficiency for everyone in our region is an achievable goal. Focused, evidence-based, concrete and outcome-focused solutions are available. At United Way, we pledge to prioritize the achievement of those solutions in the work we do throughout the region. We pledge to measure our progress in achieving those solutions, not just United Way's progress but the progress of a united community of citizens that chooses to exercise its power to solve problems rather than 86 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 merely treat them or hide them away. We believe that recognizing the true cost of self-sufficiency is a basic truth we often choose to ignore. Thanks to the State-wide collaboration organized by PathWays PA and over 3,000 other stakeholders, we can no longer ignore it. With this foundation and the courage we can all bring to this task, we can see today when the opportunity for self-sufficiency, the opportunity to achieve the real American dream will be within the reach of all of us. Thanks for your attention. )

Thank you for your testimony, Mr. Fair. Any questions for Mr. Fair? (No response.)

Thank you. Our next witness is Shelly Yanoff. Please state your name for the record and proceed with your testimony. 87 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

Sure. I'm Shelly Yanoff and I'm Executive Director of Philadelphia Citizens for Children and Youth, which is the region's major child advocacy organization, and I want to begin by thanking you for not only holding the hearing but for really beginning and proceeding on this road, which is difficult but really necessary. So thank you. Last week, thousands of Philadelphians went to Harrisburg, some of them were Councilpeople, to urge our legislators to do the right thing by making guns less available so that our kids would be safer. Our colleague, Bilal Qayyum, walked to Harrisburg saying we need jobs, not guns. Elijah Anderson, the noted sociologist from the University of Pennsylvania, when he talks to young people often hears them ask him how come it's so easy for them to get drugs and guns and so hard for them to get decent jobs. 88 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 That's a hard question, but beginning to answer it is a part of this hearing and it is a part of the Self-Sufficiency Standard and it's a part of solving the violence in our community. 15 an hour, have health insurance through their job, have children's health insurance through CHIP or Medicaid and have a subsidy for child care and somehow be able to live decently in this community. The news recently tells us that our rents are unexpectedly high compared to our home ownership. We wouldn't have to tell the families who are homeless in our City that or whose income is very low and, in fact, who are having trouble every month meeting their rent. 89 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 You have the numbers before you. You know that nationally and locally the waiting list for housing assistance is long, and it's getting longer as we go to mixed-income models and take away Section 8 housing supports from low-income families. How do you instill hope in a family that cannot afford to rent a decent home? If you can't earn a living wage, it's hard to be hopeful. You know that more than half of the 22,000 babies born this year will go home to families whose income is low. Most of them want to raise their children well, but they face some very difficult barriers. The best news is that most of these babies, although not their parents, will be able to secure healthcare, because that's the one area that we have really done something about in the City and the State. The overwhelming majority of children have health insurance. That is wonderful news, but it's not secure 90 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 and we must be very vigilant this year in protecting CHIP and Medicaid. But if the parents of those babies, most of whom are single, need to work, they confront a waiting list for child care subsidy. Research confirms what common sense told us a long time ago, and that's that children who start school not having benefited from being read to a lot, from not having been exposed to good child care start school behind and they stay behind. They then start kindergarten with lots of kids in their classes. Their chances of making up the gap are diminished further. So their families' and communities' lack of resources is not compensated for in their child care or early school experiences, and if these babies are one of the 1,500 who were born to teen mothers, many of whom drop out of school each year, their chances are diminished further, as too often these young women will not be able to either 91 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 secure a job or finish school. Indeed, the ELECT program that helps support pregnant and parenting teens serves only a fraction of these young women, and they cannot even be guaranteed child care. We are concerned that these young women will once again be on waiting lists for programs they need, for alternative education pathways and child care. Therefore, their children will fall further behind.

If one of these 22,000 babies has older siblings who go to school, in spite of some real advances, they will sit in class sizes that are over 30 with kids who need much more attention than they get. In many of our schools today, class size is starting to move up again and it never reached the critical sizes needed. Indeed, 17 is the most ideal for young children. In today's paper, we are told that we are going in the opposite direction. Unless you do something more, 92 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 65 schools will lose teachers in order to send them to other schools where they're needed even more. But we shouldn't be robbing Peter to pay Paul. The children who attend these schools are all low income. Their families are not self-sufficient economically. They need all the hope and support and teachers they can get or, once again, we'll lose the opportunity to try to compensate in some way for the poverty that shapes their lives. And it's not just for these children and families. Study after study has pointed out that the quality of schools is a major consideration in whether companies choose to locate here and whether families choose to move from or to move to here. The problem doesn't stop at the schoolhouse door. If their siblings wanted to go to a charter or a magnet middle school or a high school, they have to pay a lot of money, $10 now per week 93 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 per child, for transportation to and from school. As you have heard before, Philadelphia is alone in the region in charging kids to go to school. It makes no sense. And, of course, the high cost of transportation is another barrier to self-sufficiency for many families. The family budget can only stretch so far, as heating costs rise, wages stagnate and hopes fail. We are awfully glad that there are many improvements in the number of after-school programs. We thank you for that, but there are still many kids who have nothing to do and nowhere to go when school is out. That's a recipe for trouble and violence in too many places. We believe Council could and should develop incentives in communities to support better recreation and playgrounds, to provide more freedom schools to make our neighborhoods safer for current residents and inviting to 94 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 future ones. As we look at the needs of children and families in our community, we need to acknowledge how difficult it is for families to feel safe and secure in their neighborhoods, valued in their centers, in their schools, in their communities. People who are afraid, who have little hope, are on waiting lists for care or jobs are vulnerable to look to other ways for support. That exacerbates the problem and heightens the violence that's plaguing this City. Assuring families' economic security through adequate wages is an important step in building a healthier community. There are many things we can do to begin to turn some of this violence around. We believe the bill is one way. We believe looking seriously at economic self-sufficiency is another way. We need to be more serious about jobs, and that usually means better schools and better quality of life focus. It probably means 95 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 giving credit to firms to hire locally, to find ways to support more summer jobs for young people and to provide more jobs for people who are leaving detention. It probably means not giving tax breaks for more high-rise condos but giving more supports for communities that voluntarily work together to help bring back community in their neighborhoods. It might mean providing material incentives for people to settle here. It definitely means investing in child care for the City, no more waiting lists. It definitely means providing more funds for our school today to stop the move to increase class size, and it definitely means working with SEPTA to lower the price of transportation to and from school.

As we work to make the City more livable and safe, as we seek and find more jobs that are able to support families, as we develop better schools and rebuild communities and, yes, as we 96 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 get the guns out of our kids' and communities' lives, we will restore hope and then we will have a safer, better, economically viable City. Thank you.

Thank you for your testimony, Ms. Yanoff. (Applause.)

Any questions for this witness? (No response.)

Thank you again. Our next witness is Margaret Zukowski. Please state your name for the record and then proceed with your testimony.

Margaret Zukowski. Good afternoon, Councilman Goode and members of the Committee on Commerce and Economic Development. Again, I am Margaret Zukowski and I'm here today representing the members of 97 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 the Pennsylvania Council of Children, Youth and Family Services. I am offering comments on how Philadelphia's 21st Century Minimum Wage Standard impacts our member organizations. The Pennsylvania Council is a State-wide member association comprised of over 130 private organizations that contract with county children and youth organizations across Pennsylvania to deliver services to dependent, delinquent, abused and neglected youth and their families. Combined, our membership agencies employ 21,000 Pennsylvanians. The majority of those employees live and work in Philadelphia. Sixty percent of our member agencies across the State in Philadelphia contract with the Philadelphia Department of Human Services, and 84 percent of DHS's funding is designated to private agencies for the delivery of direct services to our City's most vulnerable children. 98 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 Pennsylvania Council members wholeheartedly support the Philadelphia 21st Century Minimum Wage Standards. However, our members are struggling to comply with the compensation standard, which requires that they currently set their minimum salaries at 150 percent of the minimum wage, excluding benefits. They are struggling because the funding that they receive through City of Philadelphia contracts does not cover the full costs of delivering services. Today you heard from one of the employees in our agencies. PathWays PA is a member of the Pennsylvania Council, as is Carol Goertzel, who sits on our Board, and you heard very poignant testimony from Tarrie Fleming about her struggles to become self-sufficient. She works in one of our agencies. Pennsylvania Council provide a broad array of services to Philadelphia children. Currently, our agencies are serving 13,000 Philadelphia children 99 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 through family preservation programs and through services to children in their own homes, SCO programs. We are serving 6,000 Philadelphia children placed in emergency shelters, foster care, treatment foster care, group homes and supervised independent living settings. We are serving 1,400 Philadelphia children placed in residential treatment settings, and over 7,000 Philadelphia children are enrolled in after-school and youth development programs provided by our member agencies. On March 8th of this year, Philadelphia Department of Human Services Commissioner, Cheryl Ransom-Garner, provided testimony to City Council on the significant successes that the Department has achieved. These successes were based on the work of the private providers that the Department of Human Services contracts with. Regrettably, the positive strides that have been made on behalf of our vulnerable children and 100 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 families are in jeopardy because the private providers on whom the City relies are not receiving the funding to deliver these services. While the cost of doing business has skyrocketed, particularly health and insurance costs for employees, transportation and utilities, the rates that the City pays its contractors have not kept pace. On July 1st, DHS provided some, but not all, of its contractors with a two percent COLA increase. Although this increase was appreciated, it did not make up for the fact for the past two years the City did not give any COLA increase to its providers. It should be noted that during the same period, the Department and Labor Consumer Price Index indicated that the region experienced an almost 10 percent increase in the cost of goods and services. The gaps between actual costs and the City's reimbursement rates continue to widen. What does this mean? 101 10/5/06 - COMMERCE - BILL 060630 - RES.

060653 It means that many of the employees of our agencies are not self-sufficient. While providers struggle to provide basic healthcare and a living wage to their employees, they frequently are called upon not to give raises and to ask employees to contribute to their health plans. This results in high turnover rates, loss of valuable experience that could be serving our City's most vulnerable children. Most of our employees, frankly, leave the private non-profit sector to go to higher-paying City jobs. Providers have struggled to bridge the gap by using private dollars that they generate through fundraising activities. Increasingly, it has become difficult to bridge that gap. The Pennsylvania Council has strongly advocated for State and local funding to address the suppressed wage scales created as the result of minimal increases providers haven't been able to 102 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 negotiate, for mandated services for abused and neglected children. Without increased wages, providers cannot meet the intent of the Minimum Wage Standard. I am here today to ask you for reciprocity. We want to meet the standard. We want to have our employees working in the human service field become self-sufficient. The reciprocity we need is from the City to provide us with fair and equitable contracts. Thank you very much. )

Thank you for your testimony. Are there questions from any members of the Committee? (No response.)

Thank you again. Our next witness is Anne O'Callaghan. Please state your name for the record and proceed with your testimony. 103 10/5/06 - COMMERCE - BILL 060630 - RES. 060653

Yes. My name is Anne O'Callaghan, and good afternoon, members of City Council and citizens of Philadelphia. I would like to thank Councilman Goode for calling this hearing and PathWays PA for giving me the opportunity to discuss the impact of this living wage on Philadelphia's immigrant population. I'm the Executive Director of the non-profit Welcoming Center for New Pennsylvanians, and we strongly advocate a living wage as vital assurance that Philadelphia's immigrants receive fair compensation for their work and also that they are enabled to support themselves and their families. 72 hourly self-sufficiency wage will help immigrants purchase homes, start businesses and improve the quality of life for themselves and their communities. This living wage also might enable a family to have one parent remain 104 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 at home to raise children or allow another individual to work one job instead of two or three. The Welcoming Center connects work-authorized immigrants from around the world with employment opportunities, legal services and entrepreneurial resources in the Delaware Valley. Our organization believes that immigration can renew Pennsylvania's neighborhoods, reenergize our commercial corridors and reinvigorate the Commonwealth's aging workforce, which as we all know is the second oldest in the nation. Since opening our doors in 2003, we have assisted over 2,000 immigrants, and this year our employment program alone has already placed more than 90 clients in jobs. Our clients come from 47 countries across the world. Almost 65 percent are women, and many of these women are single mothers. And these women statistically stand to benefit the most from the living wage 105 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 standard. More than three-quarters of our clients have earned a high school diploma, and percent have obtained a 5 Bachelor's degree or higher. 6 Despite their skills and 7 education, immigrants often struggle to 8 find appropriate employment. When they 9 come to the Welcoming Center, they are 10 often working as low-paid dish-washers or 11 house-cleaners and frequently outside the 12 system. We strive to place all of our 13 clients into self-sufficient employment 14 as measured by wages and, most 15 especially, the availability of health 16 benefits. 90 an 18 hour. 65 above 20 Pennsylvania's recently ratified minimum wage. 90 an hour, or $18,500 a year, is insufficient compensation to meet housing, food, healthcare costs for an 106 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 individual living in Philadelphia, let alone an entire family. More than one-third of our clients are supporting children here in the United States, and others are supporting family members in other parts of the United States or abroad. And to illustrate the value of a living wage, I'd like to share a few stories. Recently our employment program served a doctor who had come to the United States with his wife and three children and was struggling to find work in the medical field. He actually was earning $8 an hour making sandwiches. 60 an hour, immediately moving that family into the region of self-sufficiency. 50 an hour, now she's working as a data entry 107 10/5/06 - COMMERCE - BILL 060630 - RES. 08 an hour and provides full benefits. These clients are the fortunate ones, however. For every immigrant who finds a family-sustaining job, there are many others who continue to work hard at low-wage positions, honing their already strong skills and searching eagerly for better employment. For these clients, a living wage would mean a better life, and this life remains unobtainable, not because our clients lack skills or persistence, because of economic realities beyond their control that we believe this law would greatly assist.

The people we work with every day are eager to contribute their energy and abilities to our community, and living wage laws as advocated here will ensure that the 40, 50 or 60 or more hours that our clients work every week will enable them to purchase homes, start businesses, invest in their communities 108 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 and improve the overall quality of life for themselves and for all of us. Thank you again for the opportunity to testify today.

Thank you for your testimony. Any questions from members of the Committee? (No response.)

Thank you. Our next witness is Janet Ryder and Kathy Black.

Yeah, we're together. The labor movement sent the women today.

Please state your name for the record and proceed with your testimony.

Good morning. I'm Janet Ryder.

Afternoon.

Good afternoon. I'm Janet Ryder. Thank you, Councilman Goode and 109 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 members of City Council, particularly Councilman Ramos. I'm so glad you're here today. I want to thank you for holding this hearing on the Pennsylvania Self-Sufficiency Standard and coming to the table with an open mind as it relates to understanding, empathizing and finally developing a comprehensive plan for raising the living standards to our City residents. My name is Janet Ryder and I serve as Vice-President of Labor Participation for both the United Way of Southern Pennsylvania and the Philadelphia Council AFL-CIO. Patrick Eiding, the President of the Council, which represents more than 100,000 union households, could not be here today, but this was so important, he sent me in his place to make sure you understand the importance of self-sufficiency standards to all of us living in this region. Both of us serve on the Philadelphia Workforce Investment Board and witness every single day the direct 110 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 correlation between the need for livable wages as it relates to crime and violence, education, healthcare and parents just being able to provide hope for their children. They are our most valuable and vulnerable resource among us. As union leaders, we have always advocated and negotiated for livable wages for our members and their families, which ultimately benefit all working families. Under the AFL-CIO umbrella, we support the working family agenda and believe that everyone is entitled to a high quality of life. Ten dollars and 72 cents an hour is not much money. 17? 72 an hour to support their families. Most of them are parents 111 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 of school-age children, and as a result, we see too many families working more than one job and applying for work supports just to meet their basic needs of food, shelter, child care and transportation. 15 an hour is definitely a step in the right direction, but that alone will not solve the problem. We should be about the business of working to get families out of poverty, not to keep them poor and without hope. The Philadelphia Council AFL-CIO partners with many organizations and programs to bridge that gap, and I'm particularly proud of our partnership with the Greater Philadelphia Urban Affairs Coalition where we offer free tax preparation to families generally earning less than $35,000. Called the Campaign for Working Families, it's aimed at 112 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 assisting working families, particularly parents with children, in receiving all of the benefits they deserve. Initially many thought that organized labor wouldn't have many people to fit into this category. However, we do, and we work with single parents and children all the time to make sure they obtain all the benefits they might be eligible to receive. We also partner with the United Way in providing information referral services called First Call for Help. Statistics from these calls tell us that we are in a crisis in this City, as more people need social service supports to make it every day, coupled with the fact that these social service supports are financially strapped as well and not able to deliver the level and quality of services provided in the past. We have to be part of the solution to bridging the widening gap between poverty and wealth in our 113 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 community. Governor Rendell has said it is not acceptable that in this great nation you can work full time and still live below the poverty level. If the cost of food, clothing, shelter and other basic necessities continue to rise, how can our citizens afford to support themselves? Do we make them choose between the hot meal or gas for their car? He is absolutely correct.

It is unfortunate the fact that the pursuit of basic essentials creates a significant void in the quality of life for working families. This includes building assets, purchasing a home, education and quality time with the children. The AFL-CIO advocates a living wage to ensure Philadelphia's families receive fair compensation for their work. There is also dignity and pride of knowing that you can sustain yourself and your family. 72 an hour 114 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 wage would help working families a little, but we need to do even more than this. I will now turn the microphone over to Kathy Black. She is the President of the Coalition of Labor Union Women and serves as the Health and Safety Director for the American Federation of State-County-Municipal Employees, District Council 47.

Thank you, Janet, and thank you, Councilman Goode and Councilman Ramos and Councilman Rizzo. Thanks for sticking around and giving me the opportunity to speak today as well. As Janet said, she's been here to offer the support of the labor movement for the Self-Sufficiency Standard. That includes my union, AFSCME District Council 47. But I'm here today to add the specific support of CLUW, the Coalition of Labor Union Women, where I serve as President. We are a national organization 115 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 of women and men from many different unions who work together to advance a working women's agenda in the labor movement, which still needs it, and in legislative bodies, and we have a very large active chapter here in Philadelphia. Janet is one of our Board members. Eight years ago, I appeared before this very Committee with different folks in attendance to testify in favor of a living wage bill, which, sadly and shamefully, in my view, was not adopted by City Council. And I'm well aware that none of you are responsible for that, and I really appreciate, Councilman Goode, your work on this issue. Since then, the cost of housing, health insurance and other daily expenses have skyrocketed, while compensation for low-wage jobs in our City has stagnated and thousands more Philadelphia families have fallen below the poverty line. 116 10/5/06 - COMMERCE - BILL 060630 - RES. 90 an hour, knowing full well even then that it was impossible to raise a family on that wage. That would have amounted to $16,432 per year for a family of four, and even our minimum wage increase hasn't gotten us there. 32, no 20 matter how many hours they work, no 21 matter how many part-time jobs they string together, no matter how much family support they have. As union members, we believe a union contract that provides living wages 117 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 and benefits is the best remedy for poverty wage jobs, and we're working to organize more people and trying to do our part to lift families out of poverty. But we also believe the City has an obligation to its own workforce, to its secondary workforce and to all its citizens. Our members at CLUW do not want our tax dollars spent subsidizing low-wage jobs, which force families to live in poverty, and we know we can do better. Now, we recognize, like everyone else, the adoption of this standard would not eradicate poverty in our City, but we know it would help and lift thousands of families above that threshold where they have to make difficult choices every week about which bills to pay, which kids to buy shoes for. Adoption of this standard would send a message to citizens and businesses 118 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 that the City's elected officials are concerned about the welfare of our poorest citizens, that you are well aware that families cannot thrive on poverty wages and that you recognize your obligation to voters and taxpayers to use their hard-earned tax dollars in a socially and economically responsible manner. It would also demonstrate your understanding that the benefits of moving all these families toward the middle class would be felt beyond their own kitchen tables. Increasing the buying power of families stokes the other economic engines in our City and makes for healthier, more secure and more confident children, better able to learn in our schools and succeed in the Philadelphia of the future. Thanks to you for your time and for calling this hearing and for your consideration of the adoption of this standard. On behalf of thousands of 119 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 union women across the State and their families, we urge you to adopt this well-researched and common-sense approach to compensation for our City's low-wage workers.

Thank you for your testimony. Any questions or comments from members of the Committee? (No response.)

Thank you again. Our next witness is Brady Russell. Good afternoon. Please state your name for the record and proceed with your testimony.

My name is Brady Russell. I'm an organizer with the Philadelphia Unemployment Project. The Philadelphia Unemployment Project has always believed that jobs have to be the first priority. Good jobs, jobs that pay well and treat 120 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 workers with dignity have to be the first order of business. PUP's mission is to organize people who are out of work, who are underemployed. While always looking out for the long-term unemployed, we also organize the temporarily unemployed that appear during recessions. PUP first rose up during the '70s when good jobs were leaving Philadelphia and we'd get to see them come back in great numbers. Our primary concern over the years has been to make sure that people's lives maintain some sort of stability during temporary economic setbacks. We've protected hundreds of homeowners from losing their homes, helped people find new jobs and done our best to expand healthcare access for the uninsured, because lack of health benefits can be one of the worst facets of unemployment. When we receive an opportunity to do so, we try to improve the jobs that 121 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 are here for workers. That's why our office convened the Raise the Minimum Wage Coalition in early 2005. As this body is well aware, the campaign will have raised the Pennsylvania's minimum wage to 7.15 per hour starting July of next year. Higher wages and more job opportunities should be the primary concern of this body. PUP has long been acutely aware that better wages can be found outside of Philadelphia in the suburbs. That's why we surveyed area McDonald's restaurants in 1990 and found that employees outside of Philadelphia made a dollar more per hour than people doing the same work in Philadelphia. At that time when the minimum wage was $3.80 an hour, one dollar could be a percent 21 difference in wages. 22 We organized the inner City 23 McDonald's restaurants to protest the 24 wage disparity and promoted a boycott on 25 behalf of inner City workers at that 122 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 time. The wage differential holds true today, both for low-skilled jobs and higher quality jobs in customer service, data processing, et cetera. That's why PUP has launched the Commuter Options program, to expand the forms of transit available to get people to work at better-paying jobs in the suburbs. Everyone would like to see the better jobs come back to Philadelphia as well. The solution to bringing those jobs here is not easy to see, but we have seen over the years one sure way to ensure that the jobs we have are good ones: Unions. Unions are the surest means to make sure that workers are paid what they are worth, treated with dignity and grow in the workplace over time. We have a vast array of service sector jobs here that are in no position to leave. You can't import a submarine sandwich. There is no reason why these profitable service sector employers can't 123 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 have organized workers. We strongly support more unions in the service sector, including fast food places. We hope this body will do what it can to enhance the expansion of the labor movement in our City, bring labor to the table and initiate an economic development and negotiate with employers to help make sure their workers have a union. It's the surest way to ensure self-sufficiency when new jobs are added to the local economy. Our members were very anxious to see the minimum wage increase pass. They were willing to go to Harrisburg on five separate occasions to get that done. We'd be willing to organize around similar initiatives locally if they have a strong stand to succeed and to benefit workers in our City. Thanks.

Thank you for your testimony. Any questions from members of 124 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 the Committee? (No response.)

Thank you. Our next witness is Kristin Shiffler.

She had to leave.

Lance Haver.

Good afternoon. My name is Lance Haver. I'm the Director of Consumer Affairs for the City of Philadelphia. Thank you for taking on this issue. As I'm sure you're aware, if you don't make enough, as a consumer you can't pay your bills. It's really that simple. While there are no simple answers to how we do it, it should be simple to understand that we should be struggling to do it. I want to say that I think there are four tools that we could be using with the City's purchasing power, one of which we're already using, thanks 125 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 to Councilman Goode, which is when we contract, we now pay much more than the minimum wage. But there are three other points that we could use. When the City purchases goods, we could form a buying coalition, a buying co-op with other cities and make sure that the products we buy are coming from cities and from companies that pay a living wage. Second, when we give tax benefits, we give low-cost financing to companies when they move into the City. We should be able to leverage a living wage job with benefits for all of those companies. If they're going to get the benefit of taxes or they're going to get the benefit of low-cost financing, in exchange they ought to be willing to pay a living wage. The last is, we can use our pension fund. We should take two percent of our pension fund and turn it into a venture fund to invest only in inner City 126 10/5/06 - COMMERCE - BILL 060630 - RES. 060653 businesses so we can create more jobs that pay a living wage. Thank you very much for this opportunity. I won't keep you.

Any questions or comments for this witness? (No response.)

Thank you. Is there anyone else to testify on this resolution? (No response.)

Seeing no 14 one else, this hearing on Resolution No. 15 060653 is recessed to the call of the Chair. Thank you all for coming and thank you for your patience. (Committee on Commerce and Economic Development adjourned at 3:00 p.m.) - - - 127 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on October 5, 2006, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)