COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LAW AND GOVERNMENT - - - Room 401, City Hall Philadelphia, Pennsylvania Tuesday, June 15, 1999 2:40 p.m. - - - RESOLUTION 980853 - a resolution authorizing the Joint Committees on Law and Government and Commerce and Economic Development to conduct a full and comprehensive investigation into whether and to what extent City contractors and recipients of financial assistant fail to pay their employees a living wage and why and to what extent the City and City-related agencies fail to collect information on the wages and working conditions of such companies. And further authorizing the Joint Committees and furtherance of such investigation to issue subpoenas as may be necessary to compel the attendance witnesses and the production of documents to the full extent authorized under Section 2-401 of the Home Rule Charter. - - - PRESENT: COUNCILMAN DAVID COHEN, Chairman COUNCILMAN ANGEL ORTIZ COUNCILMAN JAMES KENNEY COUNCILMAN MICHAEL NUTTER COUNCILMAN FRANK DI CICCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 (215) 561-2220 I N D E X RESOLUTION 980853 CAROL HEMMINGWAY, ACORN ..................... ROBERT BRAND, Solutions for Progress ........ 3 RESOLUTION 980853
The Committee on Law and Government of City Council of the City of Philadelphia is now in session with respect to a continuing hearing on Resolution No. 980853, which is a resolution authorizing the Joint Committees on Law and Government and Commerce and Economic Development to conduct a full and comprehensive investigation into whether and to what extent City contractors and recipients of financial assistant fail to pay their employees a living wage and why and to what extent the City and City-related agencies fail to collect information on the wages and working conditions of such companies. And further authorizing the Joint Committees and furtherance of such investigation to issue subpoenas as may be necessary to compel the attendance witnesses and the production of documents to the full extent authorized under Section 2-401 of the Home Rule Charter. Since this is a continuing hearing, the quorum is continuing. Councilman Rizzo has joined me, Councilman Ortiz, Councilman Kenney, Councilman Nutter is member of the two Committees. This hearing will be brief. It deals 4 RESOLUTION 980853 with a labor issue as deals will the Council Committee of the Whole when it deals with prevailing wage. The first witness who will be testifying is Carol Hemmingway. Is she here? And Bob Brand. They are the two witnesses that will be appearing today, if they both will come. Thank you both. Whichever one is going to speak first, please identify yourself. Ladies first, Carol Hemmingway, please identify yourself and indicate what organization, if any, you are representing. And I suggest in view of the people who are present, a definition living wage might be in order because the matter that has brought most people here today is a matter involving the prevailing wage so that people are clear that we're not discussing the next bill which will come before the Committee of the whole on the prevailing wage, but is a very important wage issue for working people. Ms. Hemmingway, identify yourself for record, please.
Good afternoon, Councilman Cohen. My name is Carol Hemmingway. I'm 5 RESOLUTION 980853 speaking on behalf of ACORN, Association of Community Organization for Reform Now. We're a grass roots organization --
Ms. Hemmingway, may I interrupt you for a moment. I've been asked to make the announcement that the balconies of the City Council Chambers are going to be opening up now. You approach them through going on the elevator one floor up, and in the middle of the hallway just as the Chambers is in the middle of the hallway, you will find doors, one to the balcony on my right and one to the balcony on my left, so that people won't have to stand. We are very glad that so many come people have come out to our hearings. So please feel free. You can use the elevators on either corners of the building to go up one flight to the fifth floor and then in kind of in the middle of the hallway, you will find doors that lead to each side of the balcony and that should be enough for everyone to be able to have a seat. And you can convey this information to people who are standing in the hallways. We would like them to come hear and participate fully. Ms. Hemmingway, excuse me for the 6 RESOLUTION 980853 interruption.
Let me announce also the presence also of Councilman DiCicco.
As I was saying before, ACORN is a grass roots organization of 5,000 low income families in neighborhoods across 9 Philadelphia. ACORN is a founding member of the 10 job and living wage campaign. It's kind of ironic 11 that we're having this hearing at the same time 12 we're here talking a prevailing wage. I think the 13 distinct different here is that we're talking about a wage that brings people up to the poverty level in the City of Philadelphia, the living wage which is $7.90 an hour that a lot of folks are not getting because companies that do business with the City of Philadelphia don't pay their workers that wage.
You mean the City is benefiting from having companies do City work where workers are getting paid even less than $7.95?
Oh, yes. They're getting paid -- before you, there is a survey that was done, okay, where businesses that do business with the City of Philadelphia who have gotten tax 7 RESOLUTION 980853 incentives and tax breaks, corporate welfare as we call it, are not paying their workers $7.90 an hour.
That that survey, incidentally, took place, Ms. Hemmingway at the demand of this Committee that the City send out a mailing to I think it was some 7 or 8,000 different contractors with whom the City does business and who perform City work. And you're referring to the results of that survey?
I'm referring to a survey that was sent out where 1,782 employers responded; declined to answer; 244 claimed it was 16 not applicable to them. 90 an hour. I want to say that I'm happy to have the opportunity to be here. This is the third time that I'm speaking in reference to the living wage campaign. And then again, I'm not happy to be here. If you look around this room today, you will see that many ACORN members declined to attend this proceeding. Let me say just this. I don't blame 8 RESOLUTION 980853 them. It is not a due to a lack of interest in this issue. It is because we are disillusioned with the City's Government and fed up with what's taking place with this bill. This, as I said before, is the third time I'm here. Yet when we asked about Bill No. 8 970586, we just keep getting the run-around and run-around about this. A year ago City Council heard the first hearing on living wage bill, and we were told -- I was at that hearing -- that there were so many speakers signed up to testify that the hearing would continue at a later date. It's almost a year later and we're still waiting for that date. So when you wonder why people do no vote, why people do not participate in City Government, now you have your answer. Because anytime people come the City Hall for help, they're turned down flat. What you have before you is an important piece of information or investigation did produce. 90 an hour. This is over 3,000 workers. Approximately one-quarter of that 30 9 RESOLUTION 980853 percent are agencies that directly do business that affects the youth and families in the City of Philadelphia, which we're talking some of our vulnerable people that are receiving services from workers that not only don't make a minimum wage, because as we all know, the lower worker is on the totem pole, the less training they get that affects the quality and care of our families and our youth. Think about this: 3,000 Philadelphia's citizens getting poverty wages because the City simply just does not take the time to include in its contracts that they have with these companies and these agencies that employers would pay their workers at least $8 an hour. When you multiply that by 3,000 by a dollar an hour by 40 hours a week by 52 weeks a year, this adds up to $6 million in revenue that taxpayers are missing because the City did not implement a living wage clause in their contracts, 6 million that could go to the local economy in the form of groceries, movies, sneakers, rent, mortgages, and wage tax payments. Because where do low income families spend their money? They spend it in their neighborhoods. If you want to revitalize Philadelphia, 10 RESOLUTION 980853 start with the people who work here every day. But then again, we're told businesses cannot afford it. You mean to tell me the Wyndham Franklin Plaza which has 142 people making under $8 cannot afford to imply a living wage? Are you saying that the Wyndham Franklin Plaza would go out of business if they had to pay people above poverty wages? Have you been to that hotel? Do you know anyone that can afford to stay at that hotel? Yet they can't pay people $8 an hour? Come on, people, this is just lunacy. Then we're told that the City cannot afford it. Yet every week a new tax break goes to some hotel, restaurant, or other piece of contract corporate welfare. That's right, corporate welfare. That is why people are sick and tired of City Hall. In fact, this Thursday City Council will vote to Grant other TIF to another developer for a property at Eighth and Walnut. Have you been to Eighth and Walnut? People in my neighborhood would kill to live on Eighth and Walnut. Yet we are being told that this developer needs a tax break to build apartments there. Come on, give me a break. So to you, Councilman Cohen, and other 11 RESOLUTION 980853 Members of City Council, please read this report. And ask yourself what Philadelphia is doing for its workers.
Why do we allow so much corporate welfare to go but cannot find the time to address this important issue? Why do other cities have a 7 living wage ordinance while Philadelphia sits and 8 burns? What is the courage in a vision of our 9 elected officials? Maybe next time a developer or 10 other business leader comes to you as Members of 11 City Council and ask for taxpayer money, and they 12 will as they always do, then you will take a minute 13 ask them a few simple questions. Questions such as, 14 do you pay your workers above the poverty line? How 15 many of your workers receive a living wage? And if 16 they come for you our money and that answer is no, 17 and I say again our money as taxpayer because I am 18 one, then I suggest you give them a word answer of 19 your own: Next. Thank you. 20
The only disagreement I 24 have with your statement is you said that members of ACORN were justified not being here. If people 12 RESOLUTION 980853 don't come and speak to their legislators, make the appearance, then those who don't want to pay them a fair wage continue to not pay them a fair wage. Whether it's at the low end of the scale or the high end. It's interesting today in the labor field we're discussing really two ends, the prevailing wage which I understand is guaranteed by federal as well as many state laws and even by local laws and we're going to be dealing with a City of Philadelphia law in the second hearing this afternoon; and then you're speaking at the very bottom of the wage scale. This Council has always sought to find away to see that workers of every scale are treated fairly, paid an affordable wage so they can raise their families and everybody understands the dignity of work. I just would suggest to your membership that they ought to be here in large numbers. You see those who are dealing with the prevailing wage, which is fixed at a much higher level, know what they have to do to get right action from Government. They are here in large numbers and we welcome them, and we hope that workers at the lower wage levels will also come out and make the same strong demand. Thank you. 13 RESOLUTION 980853 The next witness is Mr. Robert Brand.
My name is Robert Brand. I'm president of Solutions for Progress in Philadelphia. I think, Councilman Cohen, you're right, more people should be here. And if the City not only had a living wage but prevented bosses from opposing union organization, then low wage workers would be as organized as the building trades and then we'd have a living wage and we'd prevailing wage.
I want to single out the issue of the living wage today because it is the single greatest contribution that the City of Philadelphia can make to fighting poverty this year. There are 10,000 families in this City who live in poverty because they have the misfortune to work for bosses who get their money from the City of Philadelphia, because they work for bosses who get these bond deals and financing deals from the City of Philadelphia and then treat them like dirt, 10,000 families. 14 RESOLUTION 980853 A year ago we submitted documentation on the impact of poverty. It's not just, you know, you don't have a second television set. It's, very simply stated, being poor means that children have an increased chance of malnutrition and permanent ill health that accompanies poor nutrition. Being poor means that children have less chance for normal and full brain development in their first three years of life and carry the consequences of poverty throughout their lives. Being poor means that individuals and families are uprooted constantly, sometimes homeless, live in overcrowded and inadequate housing and are increased risk for exposure to the permanent injuries of lead paint, that they suffer at a higher rate from violent crime, and that they have an increased risk of sickness and premature death from virtually every illness and disabling condition we know. That's what at stake here. And our own studies which we presented a year ago said that there's about 10,000 families who have an adult working under contract to the City of Philadelphia or as a result of a financial enhancement to get some project built in 15 RESOLUTION 980853 Philadelphia, that after it's bill there are 10,000 Philadelphia families who are forced to live in poverty because the City of Philadelphia has not yet said "never, never again. " And again, you were really much too kind because we you didn't mention health insurance. There was an article in Sunday Inquirer about a suburban storekeeper who was having trouble filling jobs at $7 an hour. And I could hear the entire editorial board of the Inquirer, violins in the background because this guy couldn't fill his jobs at $7 an hour. Nowhere in this report, in this news story, does it talk about so maybe he should raise his wages. If you can't fill a job at 7, maybe you fill at 8 or 9 or 10 or if you offer health insurance or if you offer a pension. But the Inquirer has taken the position that poor people exist to serve more affluent people. And so $7 an hour is all this guy wants to offer, people have to come to the job for that no matter that they work, they take care of our children, they take care of people with mental illness, they take care of people with severe developmental disabilities, and they 16 RESOLUTION 980853 still live in poverty. All of this could be changed by one simple ordinance. We know from every other city that has done this that if the City of Philadelphia passing a living wage ordinance, there will be competition, there is still going to be people that bid for every single contract the City puts out. There will be no decrease in services that because they have to bid against other bidders they will be afraid to cut the services they offer and they will, therefore, achieve savings by not hiring every brother-in-law they have to be their accountants, only some of them. This piece of legislation can change the lives of 10,000 families, and it can do it overnight. And by the way, not only would that help those 10,000 families, but it also helps the rest of us in terms of building stronger communities.
It also helps the rest of us in that when you have polarization of income in a community, it's not just that poor people get sick and die at a greater rate than affluent people, but affluent people get sick and die at a greater rate than if they lived in a community where there was a more equal distribution 17 RESOLUTION 980853 of wealth because right now our City spends its money on health care for homeless people. Not enough, but spends money on health care for people who have no insurance. If someone's making a living wage and has health insurance, then our City could be spending its money on other programs that keep the entire population more healthy. So we analyzed the data that was presented to you by the City of Philadelphia, and again, they say that in 1749 companies that reported out of about 8,000 that this questionnaire was sent to, they found 279 companies, 3,080 people who lived in poverty but worked essentially for the City of Philadelphia. If you give them a hundred percent sample, their numbers are no different than ours. 10,000 families. Now the simple fact of the matter is if was only 3,000 families that would be enough to pass this legislation, that is should be enough. No one in the business community gets hurt by this. If they don't want to pay a living wage, then they shouldn't do business with the City of Philadelphia. That's all this says. They can go and sell their goods and pay minimum wage anywhere else, but if they're going to use our tax dollars, then they 18 RESOLUTION 980853 should not be allowed to force people to live in poverty. That's what this is about. You not only have our data, but you have the City's own data which parallels our data saying that this is an easy way without spending a dollar of taxpayer money to take 10,000 families out of poverty. And I guess I have to say I share the frustration of how long it takes us to get a floor debate and passage of this piece of legislation.
Well, I think you both and others that have been fighting for this ought to be congratulated for your persistence. I think you've made a fine demonstration today. I think it's immoral for the City of Philadelphia to permit a policy which pays substandard wages which forces people who work, who do city work to live at poverty wages work without any assurance of any health benefits. And I'm very hopeful that based upon this study that you've analyzed for us that there will be action taken when we get back if the in fall. We thank you very much. Are there any questions by any Committee Members? If not, we thank you very much for your testimony. 19 RESOLUTION 980853 This concludes today the current hearing on living wage situation. And the committee will stand in recess until Tuesday, September at 10:00 5 a.m. 6 The Committee on Law Government is now 7 in recess. Thank you. 8 (Council adjourned at 3:00 p.m.) 9 - - - 10 11 12 13 14 15 16 17 18 19 20 21 20 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of June 15, 1999, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON LAW AND GOVERNMENT ___________________________ Lisa C. Bradley, RPR and Notary Public