COUNCIL OF THE CITY OF PHILADELPHIA COMMERCE & ECONOMIC DEVELOPMENT COMMITTEE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, April 3, 2008, 3:55 p.m. - - - Bill 080021 - Amending Chapter 17-1300 of the Philadelphia Code, entitled "Philadelphia 21st Century Minimum Wage Standard," by amending the minimum wage standard that regulates the wages employers subject to that chapter must pay to employees covered by that chapter by requiring such employers to provide certain benefits to employees. COUNCILMEMBERS PRESENT: W. Wilson Goode, Jr. Chair Blondell Reynolds Brown, Vice Chair Darrell L. Clarke Frank DiCicco Bill Green Curtis Jones, Jr. Maria D. Quinones-Sanchez - - - V A R A L L O Incorporated Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 4/3/08 COMMERCE & ECONOMIC DEV - 080021 INDEX WITNESS Rob Dubow, Finance Director........... Junette Marcano, ACORN................ 14 5 3 4/3/08 COMMERCE & ECONOMIC DEV - 080021
Good afternoon. This hearing is called to order. This is a public hearing on the Commerce & Economic Development Committee on Bill No. 080021. My name is W. Wilson Goode, Jr., the Chair of the committee. I note that a quorum is present. To my left is Councilman Frank DiCicco; to my right is Councilman Bill Green and Councilwoman Maria Quinones-Sanchez. The title of the bill, No 14 080021, is amending Chapter 17-1300 of the Philadelphia Code, entitled "Philadelphia 21st Century Minimum Wage Standard," by amending the minimum wage standard that regulates the wages employers subject to that chapter must pay to employees covered by that chapter by requiring such employers to provide certain benefits to employees, all under certain terms and conditions. Our first witness is Rob 4 4/3/08 COMMERCE & ECONOMIC DEV - 080021 Dubow, Finance Director. Thank you for your patience. (Witness comes forward.)
Good afternoon Councilman Goode and members of the committee. My name is Rob Dubow, and I am the Director of Finance. I appear before you today to offer testimony on Bill No. 080021, which amends Chapter 17-1300 of the Philadelphia Code. Specifically, the measure amends Section 17-305, entitled, "Compensation Required to be Paid to Employees," by adding a minimum benefit standard. It's my understanding that this bill seeks to ensures that employers who are covered by this chapter provide a basic or minimum benefits package to all of their full-time employees. With this amendment, the Philadelphia 21st Century Minimum Wage Standard will include not only a fair wage but also 5 4/3/08 COMMERCE & ECONOMIC DEV - 080021 a basic health standards package for workers. As stated in the original legislation, the purpose is to assure that as many employees as possible within the City of Philadelphia earn an hourly wage that enables them to live with more dignity and increased economic self-sufficiency. Bill No. 11 080021 furthers this goal by assuring a fair minimum wage and fair minimum health benefits. I'd like to note for the record that a City Solicitor's opinion addressing the legal issues presented by the original bill was issued on May 20, 2005. This administration has reviewed that opinion, and the present bill raises no new legal issues in this regard. The Administration supports the goal and the purpose of the bill. While it's not possible at this time to determine the impact that 6 4/3/08 COMMERCE & ECONOMIC DEV - 080021 this amendment will have on contractors and providers currently doing business with the City, the Administration hopes that those employers and entities, which must comply with the law, value their workforce and understand the importance of providing health coverage. I also want to thank Councilman Goode for the opportunity to discuss this measure and proposed clarifying amendments. Thank you for the opportunity to testify on behalf of this bill. This concludes my written testimony, and I'd be pleased to respond to any written questions you may have.
Thanks for your testimony. Just to share with Committee the conversation I've had with the Administration, the intent of this 7 4/3/08 COMMERCE & ECONOMIC DEV - 080021 bill is to first add a new benefits standard that was not included in the original legislation a few years ago. We simply thought it was not the opportune time to deal with both minimum wage and minimum benefits, although a lot of minimum-wage and living-wage legislation deals with both wage and benefits. And since that time, interestingly enough, our minimum wage standard was based upon a job-creation tax-credit standard, and since that time, the PREP ordinance actually has come into law and established a minimum benefits standard. And so the purposes of this particular legislation is really to pattern itself after what's already included as a provision within the PREP ordinance and begin to set one standard across government in terms of public policy that suggests that we should minimally pay certain public- 8 4/3/08 COMMERCE & ECONOMIC DEV - 080021 supported employees 150 percent of the federal minimum wage and that each full-time employee should receive minimally whatever that minimal benefit standard -- health-benefit standard that is being offered within their workplace. And so with that, if there are any questions for this witness? Councilman Green.
I just have a point of information for you and then a question for Mr. Dubow. One is, what's the PREP ordinance? I'm not familiar with that.
And actually a copy of the portion of that ordinance is within your packet I'm referring to.
Thank you. 9 4/3/08 COMMERCE & ECONOMIC DEV - 080021 What affect would this have -- and I don't know who this question is for, but what effect would this have on existing contracts if we require them to extend new benefits? For people who currently have contracts that are at a fixed price or that they got on a competitive bid with the city, how -- are we allowing them to be reimbursed for the additional costs of this or --
First and foremost -- and I'll answer the question first, and then you can respond, Mr. Dubow -- this bill does not take effect until July of 2009; that's the first thing. And so that's the beginning of a new contract year. Secondly, that's also the time at which the federal minimum wage will exceed the State minimum wage. Right now, technically, the federal minimum wage is still only 5.85, while the -- federal minimum wage is only 5.85, 10 4/3/08 COMMERCE & ECONOMIC DEV - 080021 while the State minimum wage is at 7.15. It will take another step, but not until July of 2009 will there essentially be a federal minimum wage at 7.25, which is higher than the State minimum wage. And so we're actually giving the employers under the existing legislation an opportunity to pay 10.72 with no benefits. And then in July of 2009, they will move to at least 10.88, with the minimal benefits standard.
Are there any questions for this witness? (No further questions.)
I think we have a witness from ACORN Junette Marcano. Please approach the witness table. 11 4/3/08 COMMERCE & ECONOMIC DEV - 080021 (Witness comes forward.)
And let me note for the record that we've also been joined by Councilwoman Blondell Reynolds-Brown and by Councilman Curtis Jones, Jr.
How many -- do we have an idea of how many folks, contractors, would be impacted by this?
There's no 18 way of telling how many would be impacted by it.
The only way to do it is to actually do a census after it takes effect. And to so some extent, that was the purpose of the Living Wage Advisory Committee 12 4/3/08 COMMERCE & ECONOMIC DEV - 080021 established under the original ordinance, but for whatever reason, the previous administration chose not to put that Living Wage Advisory Committee into position, and there has not been a review in terms of even the wage portion of it. But we've asked this administration for a resolution 11 already approved by Council to essentially make -- to establish that committee to make recommendations and to do so by the end of the fiscal year. And so we wanted to put some minimal benefits standard in place, but we're also looking for both of it to be reviewed for implementation by July of 2009.
Thank you. Please state your name for the record. 13 4/3/08 COMMERCE & ECONOMIC DEV - 080021
My name is Junette McConnell, and I am here this evening representing ACORN. Chairman Goode and members of the committee, I am happy to be here today and thankful to the Chairman and Council to have given me the opportunity to speak. I wish to thank Council and Chairman Goode for taking up the banner of living wages and benefits for contractors with the City. I'm representing ACORN, the City's largest community-based organization with approximately 13,000 members organized into twelve neighborhood chapters. Members are low- and moderate-income people committed to making sure that Philadelphia is a city where everyone can succeed. Our members came together across the State in 2005 to organize for an increase to the minimum wage 14 4/3/08 COMMERCE & ECONOMIC DEV - 080021 and, prior to that, worked with Council to institute a living wage for the City's contracted workforce. Both actions were a response to a failure at the federal level to raise wages for the millions nationally working a minimum or a near-minimum-wage job. Today, we face a similar crisis. Today's crisis is related to the increasing cost of health care. We again see an unwillingness to act at the federal level. Leaders in Harrisburg cannot overcome entrenched special interests that seek to protect profits at the expense of people. Again, today, the City must take the lead in every way possible to ensure that as many of its citizens are covered as possible. Ensuring that the City contractors are providing the same health benefits to all employees that they do for any of their employees is a common-sense approach. The rank and 15 4/3/08 COMMERCE & ECONOMIC DEV - 080021 file employees who can least afford a medical catastrophe should be covered as well as the CEOs of the companies, who make six figures. In every place that a working family looks these days, prices are increasing; wages, however, remain the same. Gas today is over $3.20 a gallon, milk and bread prices seem higher each time you go to the grocery store. The cost of heating one's home goes up every winter. Meanwhile, working people's wages have declined. And in a city like Philadelphia, a city of working people, every day, the struggle is a bit tougher. It is a sad state of affairs that in the wealthiest nation of the world, in one of world's greatest cities that basic health care is considered almost a luxury by so many and only afforded by those with so-called "good" jobs. While this ordinance will not 16 4/3/08 COMMERCE & ECONOMIC DEV - 080021 insure the thousands of Philadelphians that are without health coverage overnight, it will indeed start the dialogue just as the City's living-wage ordinance did just a few years ago. It shows that the City, as an employer and through its contractors, will set the bar for other businesses to meet and beat. We hope it will serve as a beacon that other cities can aspire to. We also hope that those cities will inspire states to ensure their citizens, and we pray that those states will show the federal government the way to move forward. ACORN believes that health care should be a right, not a privilege. Let Philadelphians shine the light for the millions across America who live in fear that the next medical emergency can cause their families financial ruin. I wish again to thank 17 4/3/08 COMMERCE & ECONOMIC DEV - 080021 Councilman Goode and all of Council for their leadership and for giving ACORN an opportunity to speak on this critical issue for Philadelphia's working families. Thank you.
Thank you for your testimony, Miss Marcano, and I should say thank you for your patience. She actually showed up this morning, thinking she was here to testify, and came back. And so we definitely thank you for your patience and for coming back and for your excellent testimony. Are there any questions from the committee? (No questions.)
Is there anyone else here to testify on this bill? (No response.) 18 4/3/08 COMMERCE & ECONOMIC DEV - 080021
The committee will stand in recess for a minute. (Committee stands in recess.) * * * (Proceedings resume.)
We will now move from a public hearing to a public meeting to consider Bill No. 080021. Consistent with Mr. Dubow's testimony, the Law Department has asked that we do an amendment that clarifies the language, and I shall explain the amendment. The original language said that all full-time employees should receive the same benefits; we want to change that to be more explicitly to say minimal, at least minimal benefits; and the reason being not so much even for private contractors but more so for the City of Philadelphia itself, because this law applies to the City of Philadelphia, and 19 4/3/08 COMMERCE & ECONOMIC DEV - 080021 therefore, there are actually standards of workers who don't receive the same benefits as our uniformed employees, and I don't believe that any of us believe that we necessarily should receive exactly the same benefits as Police And fire. And so this language clarifies it legally so that it will comply to all of the different covered employers. So the Chair recognizes Councilwoman Brown for a motion on the amendment to Bill No. 080821.
Mr. Chairman, I move that a motion be made on Bill No. 080021, that the bill 19 be amended as articulated. (Motion seconded.)
Thank you. 20 4/3/08 COMMERCE & ECONOMIC DEV - 080021 All of those in favor? Those opposed? Bill No. 080021, is amended. The Chair now recognizes Councilwoman Blondell Reynolds-Brown for a motion on Bill No. 080021, as amended.
Mr. Chairman, I move that Bill No. 11 080021 be moved, as amended, with a favorable recommendation, and further move that the rules of Council be suspended so as to permit first reading at the next scheduled session of City Council. (Motion seconded.)
All those in favor? Those opposed? Bill No. 080021, as amended, is reported out of committee with a favorable recommendation and a suspension of the rules to allow for first reading at our next Council 21 4/3/08 COMMERCE & ECONOMIC DEV - 080021 session. Thank you. This concludes our public meeting. (Proceedings end at 4:10 p.m.) * * * 22 C E R T I F I C A T E I HEREBY CERTIFY that the proceedings of the City of Philadelphia Council Committee on Commerce & Economic Development are contained fully and accurately in the stenographic notes taken by me on Thursday, April 3, 2008, and that this is a true and correct statement of same. __________________________________ JOSEPHINE CARDILLO Registered Professional Reporter (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.)