A minimum wage ordinance in Milwaukee County could increase the county tax levy by $8.4 million a year and cost taxpayers up to $80 million in the next ten years according to a "comprehensive fiscal analysis" by the county’s nonpartisan comptroller’s office.
Set at $12.45 an hour (or 110% of the poverty income level for a family of four) the wage mandate is expected to pass the County’s Finance, Personnel, and Audit committee on Monday and come to a full County Board vote by Thursday.
Scott Manske, the county’s nonpartisan comptroller, issued a report over the weekend that gives a scary forecast for economic development. With a $12.45 minimum wage mandate, the “minor role” the county currently plays in economic development would likely become “nonexistent,” Manske said.
The new county board proposal has Supervisors Steve Taylor and Jim “Luigi” Schmitt concerned it may pose a major problem for advancing the Couture project, a 44-story apartment and hotel high-rise planned at the underused Downtown Transit Center overlooking the lake.
In a phone interview with the Red Fox blog, Couture developer Rick Barrett wouldn’t say whether the minimum wage ordinance would kill his $160 million development, but said there isn’t a “hotel group around” that would be able to work with such a mandate. Earlier this year, the County Board nearly killed a hotel deal with a similar wage ordinance, but was narrowly saved by the veto pen of County Executive Chris Abele.
Barrett thought the Board’s recent move was discouraging. "This is the exact opposite of what needs to happen for economic development.”
To illustrate the point, Barrett asked, “How many cranes are up in Milwaukee right now? None. They should be looking to spurn economic growth, more development, and more job creation rather than trying to suppress it.”
Yet, the Couture isn’t the only development that could fall to the wayside. Manske estimates that the living wage ordinance will result in 8,700 lost “opportunity cost” jobs and drive down the value of county-owned land by 24%. Such a wage mandate would simply make Milwaukee County a very unattractive place to do business.
What would prompt the County Board to pursue such a bad policy?
Supervisor Jim Luigi Schmitt told the Red Fox blog that SEIU invested a lot of time drumming up support for the living wage ordinance and even wrote the draft in collaboration with Supervisor David Bowen.
“I believe SEIU worked on 16 different drafts,” Schmitt remarked.
Why are they so involved?
Schmitt said SEIU wants to make a statement and that “their goal is to unionize and raise the lowest worker on the totem pole.”
He's right on the first part. Specific language in the resolution carves out an exception for “employees who are covered by a collective bargaining agreement between the employer and a bona fide union.”
Sounds like a pretty good deal for SEIU.
If a company wants to be exempt from the $12.45 minimum wage mandate, all they have to do is sit down with a union and hammer out a collective bargaining agreement for less. The company gets to avoid paying more and unions get to grow their dues-paying membership. Everyone wins, right?
Not if you’re a Milwaukee County taxpayer.
By drafting the county’s minimum wage ordinance, SEIU found a way to swell its ranks without negotiating directly with companies. If they brought increased services and added value to the plate, there would be no reason to do an end-around, playing puppeteer with the County Board.
The Board should spend more time representing all its constituents in Milwaukee County. Holding only one public hearing the same day as their committee vote sends a clear message that third party groups are simply more important than the taxpayers footing the bill.