m. - - - Bill 050234 - An Ordinance amending Title of 11 The Philadelphia Code, entitled "Contracts and Procurement," by 12 enacting a new Chapter 17-1100, entitled "Philadelphia 21st Century 13 Minimum Wage Standard," requiring a new minimum wage standard within the 14 City of Philadelphia, all under certain terms and conditions. 15 16 PRESENT: 17 COUNCILMAN W. , Chair COUNCILMAN FRANK DiCICCO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN JUAN F. RAMOS COUNCILWOMAN BLONDELL REYNOLDS-BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. 2670 2 Commerce/Economic Development - 5/4/05 - - - P R O C E E D I N G S - - - CHAIRMAN GOODE: Good morning. This hearing is called to order. This is a public hearing of the Commerce and Economic Development Committee on Bill No. 050234. My name is W. , Chair of this Committee. I note that a quorum is present. To my far left is Councilman Frank Rizzo. To my immediate left is Councilwoman Marian Tasco. to my immediate right is Councilwoman Blondell Reynolds Brown. Also present is Vice Chair Councilman Michael Nutter, and Councilman Frank DiCicco. The title of the Bill Number 050234, amending Title 17 of The Philadelphia Code, entitled "Contracts and Procurement," by enacting a new Chapter 17-1100, entitled "Philadelphia 21st Century Minimum Wage Standard," requiring a new minimum wage standard within the City of Philadelphia, all 3 Commerce/Economic Development - 5/4/05 under certain terms and conditions. In lieu of making opening comments, I'd like to read a letter from State Senator Vincent Hughes. Dear Councilman Goode: I'd like to first commend you for your tireless efforts to restore the value of the minimum wage on the local level with your legislation, City Council Bill 234. With legislation such as this and Senate Bill 369 which I am co-sponsoring, that will ensure that Philadelphia's minimum wage workers will finally have the means to not only keep apace with inflation, but will also have the ability to provide the basic needs for their families without having to work two or three jobs. I stand with you at the hearing in support of your legislation. Unfortunately, due to my commitments with the state legislature, I cannot physically be there. However, you have my wholehearted support of this legislation, your campaign to provide a livable wage to the citizens of 4 Commerce/Economic Development - 5/4/05 Philadelphia. S. Congress to take action on the minimum wage issue has been left to lawmakers on the state and local level like us, to take action and to relieve the burden of our citizens who earn minimum wage, to try to provide for their families. I am delighted to have seen the need for action on a local level. It's in the best interests of both the state and local governments to restore the value of the minimum wage. Not only does it ensure that minimum wage employees don't have to make a choice between purchasing prescription drugs, buying food or heating their home, but also fuels the economy of putting money back into local businesses, the community and the City. A minimum wage that fails to keep up with inflation lowers the living standards of low income workers and contributes to overall stagnant financial growth within the City of Philadelphia. 5 Commerce/Economic Development - 5/4/05 It is therefore critical that we move quickly to restore the lost purchasing power and dignity of the minimum wage worker. 77 an hour. That's a great start to restoring the value of the minimum wage, and I am proud to join with you in guaranteeing that our citizens can live in the dignified manner that we all are entitled. My Senate colleagues and I also plan to take steps to ensure the minimum wage legislation will be highly visible during Senate proceedings. Once again I extend my support of your important legislation.
I hope to work beside you in the near future to see that City Council Bill Number 234, as well as Senate Bill 369 succeed in restoring the value of the minimum wage and help our minimum wage earning citizens break free of the shackles of poverty that has become their 6 Commerce/Economic Development - 5/4/05 only option. State Senator Vincent Hughes. Our first panel this morning is ACORN. Let me note for the record that Councilwoman Donna Reed Miller and Councilman Juan Ramos are also present. Please state your name for the record.
My name is Karen Little. I'm an ACORN member. I would like to thank Councilman Goode for introducing this legislation, and inviting ACORN to be part of the hearing. And I would like to thank all of Council for taking the time to listen to us. Eleven years ago just 200 miles from Philadelphia, Baltimore City Council passed the first pieces of living wage legislation. Right now we are ten years into this movement designed to raise wages locally, in the absence of state and federal action. In the past ten years, 125 living wage laws have been passed in cities and states across the country. None of these 7 Commerce/Economic Development - 5/4/05 laws have been repealed due to economic considerations, and may have been expanded. It is time for Philadelphia to take action and join in this movement to support families and raise wages locally. The living wage legislation, proposed by Councilman Goode, focuses exclusively on workers that benefit from public tax dollars. It modestly raises wages to support families here in Philadelphia. And for that reason ACORN is proud to support it. In addition to raising wages for working families, living wage laws are good for businesses. Living wage laws tend to make it easier for business to hire and keep good workers, cut down on absenteeism and turnover, producing more experienced workers. It also creates a level playing field for many bidding on a City contract. Many businesses already pay their wage and have such a bill in place within the practice of rewarding those who choose to pay the lowest wage possible. 8 Commerce/Economic Development - 5/4/05 Finally, ACORN strongly supports the creation of a living wage task force or review committee, with the power to review and amend the wage as needed. Several cities have established review committees and have expanded the living wage in the past years. In short, the legislation is overdue and ACORN is pleased to support it. We are happy to answer any questions you might have. Thank you very much. CHAIRMAN GOODE: Thank you for your testimony. Any questions from members of the committee? (No response.) CHAIRMAN GOODE: Seeing none, our next witness is Dwayne Bumb, from the Commerce Department, on behalf of the Street administration. MR. Bumb, please state your name for the record.
Good morning. My name is Dwayne Bumb, Deputy Commerce Director for the 9 Commerce/Economic Development - 5/4/05 City. Good morning, Councilman Goode and other members of Council. And I'm here to provide testimony in support of the proposed bill amending Title of The Philadelphia Code, entitled 7 contracts and procurement, by enacting a new 8 Chapter 17-1100, entitled Philadelphia 21st 9 Century Minimum Wage Standard, requiring a 10 new minimum wage standard within the City of 11 Philadelphia, all under certain terms and 12 conditions. 13 First of all, I would like to 14 acknowledge that Councilman Goode's bill to 15 increase the minimum wage standard is very 16 timely, as it focuses on the ways to improve 17 the quality of life for Philadelphia workers. As you may know, Pennsylvania's minimum wage is tied to the federal minimum wage that has not been increased since 1996. This is the second longest stretch of time that the minimum wage has remained stagnant since it was established in 1938. The administration recognizes the need to address the current rate of $5.15 per 10 Commerce/Economic Development - 5/4/05 hour, a rate that has not kept pace with inflation or increases in the average hourly rates of American workers. Councilman Goode's proposal complements the administration's efforts to create sustained career opportunities for Philadelphia workers, as outlined in the Economic Development Blueprint. Correcting the minimum wage is a first step toward improving opportunities for all Philadelphia residents to support their families in the 21st century economy. The blueprint calls for increased educational opportunities and access to literacy services, to help residents pursue careers in growth industries such as the knowledge industry. In addition, the blueprint states the objectives of job creation in growth industries and targeted work force training to these growth industries, in order to create long-term job opportunities for all City residents. In order to help Philadelphia 11 Commerce/Economic Development - 5/4/05 residents support their families, Councilman Goode's bill makes an immediate impact on the hourly wage of Philadelphia workers, while the blueprint puts the administration's resources behind efforts to create long-term employment in growth industries for these workers at levels above the minimum wage. And for those reasons, we are very much in support of this bill. I thank you for opportunity to testify, and would be happy to answer any questions. CHAIRMAN GOODE: Thank you, Mr. Bumb. Questions from members of the committee? Councilman Ramos.
Thank you, Councilman Goode, for your initiative in introducing this very important bill for the working people of the City of Philadelphia. I'm also very glad to hear that the administration is in support of this bill. Is that correct? 12 Commerce/Economic Development - 5/4/05
Okay. It is very good, a very, very important first step in the right direction to correct a wrong, when it comes to minimum wage. And I see that Councilman Goode and the administration have included some amendments, one of them which I had talked to the good Councilman about, that took it a little further when it comes to enforcing this bill. And I look forward to voting this bill out of committee today and voting for it when it comes on the floor of the City Council. Thank you. CHAIRMAN GOODE: Thank you, Councilman. Questions from other members of the committee?
I don't know if you can answer this question or not; but, you know, I have a real concern about the social service agencies that receive funding from 13 Commerce/Economic Development - 5/4/05 the federal government and the state to provide social services to our constituents. What impact do you see is this having on the rise in the cost to them to do business under these contracts?
As I understand the bill, it does exempt... There's a threshold set for the level of the contract. So a very small contract by the social service providers would be excluded from the bill. But I think, to answer your larger question, it's my understanding that the bill 14 would not negatively impact the provision of those social service contracts to City residents; that, in fact, those contractors by and large already meet the threshold that we've surveyed, and therefore would not be negatively impacted by this bill. CHAIRMAN GOODE: Just to add to Mr. Bumb's comments, only non-profit contractors that receive over a hundred thousand dollars in contracts for the 12-month period are covered by the bill. We believe, as Mr. Bumb said, that 14 Commerce/Economic Development - 5/4/05 most of them already pay this wage. There are also a host of provisions within it for waivers, to be administered by the Office of Labor Standards. And so in hardship cases the wage standard can be waived.
Who would this bill mostly impact, as you see it, from the Commerce Department? Would it impact all of the contractors that we do business with? Would it impact PIDC and the contracts they give out?
According to our contracting system, there are approximately 1526 contracts totally. Only 39 fall under the $10,000 threshold. So, it would affect all the contracts. And we actually have an amendment that would have it apply to all contracts. It also applies to anywhere that public money flows, except for those employers who are not covered. But it 15 Commerce/Economic Development - 5/4/05 definitely flows to economic development dollars like PIDC.
So if we had had this bill in place, it probably wouldn't impact the stadiums. But would it have impacted the stadiums?
I think that for projects moving forward, it would impact the convention or development to the extent that the City is providing financial resources to the development.
So any entity that receives a hundred thousand dollars or more that receives City funding would be covered by this bill. Are there any exceptions?
It applies to anyone who receives City financial aid. So it applies to all financial -- all economic development financial aid. So we give money, land, or any other consideration to an 16 Commerce/Economic Development - 5/4/05 economic development project, it automatically kicks in.
Okay. Does anybody have a downside to that? I'm just asking the question. I mean, I'm not...
It's a standard that already is applied to our job creation tax credit program. And our job creation tax credit program is generally being used for most of the projects, as it is. So, it is a standard, wage standard, in terms of economic development, not just on a local level but on a state level.
Who would be against this bill, other than the people on this Council? I mean, what public entity would be against this bill? CHAIRMAN GOODE: Normally you would have the Chamber of Commerce come in and testify against this bill. They're not here.
Thank you. Just establishing a record. CHAIRMAN GOODE: Any other questions 17 Commerce/Economic Development - 5/4/05 from members of the committee? COUNCILMAN DiCICCO: Questions for you, Mr. Chairman. CHAIRMAN GOODE: Councilman DiCicco. COUNCILMAN DiCICCO: Do you see in bold type tax incentives. A Ten-year tax abasement is a tax incentive that we allow for development. Most jobs are done by unions, so there's probably... CHAIRMAN GOODE: In terms of construction jobs, it's already covered by prevailing wage law. COUNCILMAN DiCICCO: Prevailing wage. But if it wasn't a big job; it was a smaller job with a more local contractor... CHAIRMAN GOODE: Covers all economic development, financial. CHAIRMAN GOODE: Just want to make sure of that. Thanks. Councilwoman Miller.
Yes. This question is for you. Does this also cover loans? 18 Commerce/Economic Development - 5/4/05 CHAIRMAN GOODE: Absolutely.
This bill is called a minimum wage standard, a bill. How does it differ from a living wage or is it -- can be -- because I know the young lady testified to a living wage. I want to be clear what we're doing. Is there a difference? CHAIRMAN GOODE: It is constructed as a living wage bill. Only state and federal legislatures can actually set a living wage across the board. When it's done on a local level, there's two ways that it can be done; one, if it covers industries that are not covered by federal minimum wage law which is a most -- no industry, or if it directly relates to the government itself and people contracted with the government. And therefore, it's constructed as a living wage bill but called a minimum wage bill.
Thank you. CHAIRMAN GOODE: Any more questions from members of the committee? 19 Commerce/Economic Development - 5/4/05 (No response.) CHAIRMAN GOODE: Is there anyone else to testify on this bill? (No response.) CHAIRMAN GOODE: All right. Before we move into a public meeting, I'd like to go over the amendments. The amendments as circulated, you'll find in your folders, are essentially ACORN amendments related to best practices or living wage legislation nationwide and some minor technical re-drafting by the Law Department. The first change you will find is the chapters actually being re-numbered. The chapter as stated in the original bill was Chapter 17-1100. There was already a 17-1100 and a 17-1200, so the chapter will be re-numbered to Chapter 17-1300 which, you know, presents no legal problems.
What about the hire... CHAIRMAN GOODE: Doesn't present any 20 Commerce/Economic Development - 5/4/05 problems with the technical staff and Law Department, so we don't have to change it. Technically, even if there's a problem with a number, as a bill's passed it will be changed by the code editor anyway.
Can it be changed in the title? It says amended. This is the title. And the Chapter 17-1100 is in the title. CHAIRMAN GOODE: It is still legal to pass a bill that says Chapter 17-1100. If we passed it even as Chapter 17-1100, the code editor could still change to it 17-1300 after our action is taken. So technically we don't have to amend it at all, but I chose to amend the body of the bill to change it to 17-1300. And subsection 17-1302 is being amended to deal with specific language related to tax incentives which was discussed already. Those amendments were suggested by ACORN. It's also amended to provide a more complete definition of the term employee, as 21 Commerce/Economic Development - 5/4/05 suggested by ACORN. Furthermore, the administration has asked to put a definition of the Office of Labor Standards, so there is some governmental authority listed within the bill. And lastly, within that subsection there's a definition of subcontract which is added to be covered as a service contract. In other words, any work that is subcontracted also has to apply to... has to be covered bit bill. It's suggested by both ACORN and the administration. In subsection 17-1304, there's an amendment that actually establishes the Office of Labor Standards as the authority to give the waivers. And the rest of the amendments are just minor language re-drafting by the Law Department, other than subsection 17-1311 which is being added to the bill to create a living wage advisory committee, as suggested by ACORN. Any questions on these amendments? 22 Commerce/Economic Development - 5/4/05 (No response.) CHAIRMAN GOODE: Seeing none, we will move from our public hearing into a public meeting. The Chair recognizes Councilman Nutter for a motion on amendments to Bill 8 Number 050234.
Thank you, Mr. Chairman. I move that the amendments as offered to Bill 050234 be adopted.
Second. CHAIRMAN GOODE: All in favor of the amendments? (Chorus of "ayes.") CHAIRMAN GOODE: Those opposed? (No response.) CHAIRMAN GOODE: Seeing none, the amendments are adapted. Chair recognizes Councilman Nutter for a motion on Bill Number 050234 as amended.
Thank you, Mr. Chairman. 23 Commerce/Economic Development - 5/4/05 I move that Bill 050234 as amended be reported out of this committee with a favorable recommendation, and a further recommendation that the rules of Council be suspended so as to permit first reading at our reflection session.
Second. CHAIRMAN GOODE: All in favor? (Chorus of "ayes.") CHAIRMAN GOODE: Those opposed? (No response.) CHAIRMAN GOODE: Ayes have it. Bill 14 050234 as amended is reported out of committee with a favorable recommendation; a further recommendation that the rules of Council be suspended to allow first reading at our next Council session. Thank you all very much. This meeting is adjourned. (Public hearing and meeting concluded at 10:40 a.m.) 24 CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public hearing and meeting of The Philadelphia City Council, taken on May 4, 2005, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (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.)