Raising New York’s Minimum Wage Will Boost the State Economy

1.6 million low-wage workers would benefit; 25,000 jobs created

Raising New York’s minimum wage will boost the economy, helping 1.6 million low-wage
workers and creating 25,000 jobs, according to a new report from the Fiscal Policy Institute (FPI). Currently, New York’s minimum wage is the same as the federal $7.25 an hour. There hasn’t been a substantial increase in New York’s minimum in five years, although it rose by 10 cents in July 2009, when the last step of an increase in the federal minimum took effect.

“This is the right time to begin a phased increase in New York’s minimum wage,” said James
Parrott, FPI Deputy Director and Chief Economist and one of the authors of the new report. “Too many New York workers work hard and play by the rules but are just not paid enough to make ends meet. The recession has made it much harder for many low- and middle-wage workers to get a pay hike. Given that much of the projected job growth will be in low-wage jobs, it is essential that New York update its wage floor.”

“Our lowest-paid workers need a pay raise, and a boost will not only promote economic recovery but will help ensure that the benefits of the recovery are more broadly shared,” Parrott added. Earlier FPI reports show that New York’s economic growth over the past twenty years has been extremely polarized and that the average worker has not been sharing in the productivity growth their labors have achieved. New York State’s income distribution is the most polarized of all the states, and the disparities in living standards have grown even sharper due to the recession.

Eighteen states, from Florida to Washington, Maine to Arizona, and the District of Columbia
already have minimum wage levels above $7.25. The state of Washington leads the nation with a $9.04 an hour minimum, followed by Oregon at $8.80 and Vermont at $8.46. These three states and five others also have built an automatic annual increase into their minimum wage systems so that the wage floor regularly adjusts to consumer price increases.

The FPI report makes the case that New York’s minimum wage should be raised to a level that is slightly above the three-person federal poverty threshold, arguing that for nearly two decades (1962-1979) New York’s annualized minimum wage value averaged 108 percent of the three person poverty level. This would mean an increase in three annual steps to reach $10.00 an hour in 2014. Once that standard is achieved, the FPI report urges that New York’s minimum wage be indexed to consumer prices so that its purchasing power keeps up with rising costs in the future.

The report notes that almost all low-wage workers who stand to benefit from an increase in the minimum wage work in retail trade, food services and other local service businesses that do not compete with businesses in other states. Raising the wage floor across the board will not put any individual business at a competitive disadvantage. The retail sector will be affected the most. More than one third of retail workers would benefit, and one in every four workers affected will come from retail. Large retailers with 500 employees or more will be affected the most since they pay wages that average nearly 25 percent less than smaller retailers.

In its detailed analysis of the characteristics of workers who stand to benefit from a minimum wage increase, FPI finds that women and black and Hispanic workers will disproportionately benefit since they are more likely to be low-wage workers. About one in every six workers in New York City and in other parts of the state will benefit from a minimum wage hike.

Ninety percent of those benefiting will be adults, with teenagers accounting for only 10 percent. Low-income families with children stand to benefit significantly since 54 percent of family earnings in families with a low-wage worker and children are earned by the low-wage worker. In all, 1.1 million children in New York live in families where a worker will see higher wages due to a minimum wage hike.

The report estimates that the increased purchasing power of low-wage workers will pump much needed demand into local businesses and communities and will create roughly 25,000 new jobs in New York State over three years.

The new report is available HERE.

New York State Democrats will propose hike in state minimum wage to $8.50 an hour

Speaker Sheldon Silver confirms automatic increases will be part of proposal

by Kenneth Lovett

Assembly Speaker Sheldon Silver will unveil a plan on Monday to increase the state’s minimum wage from $7.25 to $8.50 an hour.

Assembly Democrats Monday will propose a hike in the minimum wage to $8.50 an hour, the Daily News has learned.

The plan also will include a provision for automatic increases going forward that are tied to inflation, according to sources.

The state’s current minimum wage is $7.25 an hour. It has been increased five times since 2000–the last time in 2009, when it automatically went up a dime-an-hour to meet the federal rate.

Raising it to $8.50 an hour would give New York one of the highest rates in the country, only behind such states as Oregon and Washington.

Supporters say it is needed because salaries for low-wage earners have not kept up in recent years with rising consumer costs, while businesses warn it could further hurt a battered economy.

Assembly Speaker Sheldon Silver wouldn’t provide specifics, but confirmed to he News that his majority would unveil its plan on Monday at the Capitol.

Silver, who first raised the idea on Jan. 4 in a speech just before Gov. Cuomo’s state-of-the-state address, said at the time an increase would affect 14% of the workforce, or 1.2 million people.

He called an increase the top priority this year for the Assembly Dems.

“Frankly, it is absurd to expect anyone – let alone a working family – to afford the cost of living today and be able to invest in their future on a salary of $7.25 an hour; or $15,000 a year,” Silver said at the time.

Cuomo last week had expressed openness to an increase this year.

He said he has long supported minimum wage increases, but held off taking a position on one this year until a specific plan is proposed.

Senate Republicans are considered the greatest obstacle.

They have long opposed hikes to the minimum wage, saying it hurts job growth.
On Sunday, Senate GOP spokesman Scott Reif didn’t take a position.

“Senate Republicans will continue to promote policies that encourage job growth and make New York a more business-friendly state, just as we did last year partnering with Gov. Cuomo,” Reif said.

Mayor Bloomberg, a big-time backer of Senate Republicans, has said he supports a minimum wage hike.

Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, hailed any hike to worker wages, calling it “an important step forward.”

“The way there can be an economic recovery is to put more money into the hands of the people who have very little,” Appelbaum said. “Every penny they get they are going to spend. It comes back to the economy.”

But many business groups have argued it would lead to job losses and make New York less competitive with neighboring states.

Eighteen states, including Massachusetts and Connecticut, currently have higher minimum wage rates than new York.

Final Report on Mandate Relief

Originally posted on December 26, 2011 by Jimmy Vielkind

Jim Odato devoted his column this morning to the final report of the Mandate Relief Redesign Team, which issued its 70-page document, it seems, without all of the team members even knowing it was coming out.

Business and local government groups, in part bubbling through the regional economic development councils, will be making a major push on the subject this year. Lawmakers enacted a property tax cap last year without a corresponding mandate relief package, and it’s thought to be at the top of the list come January.

CLICK HERE FOR THE REPORT

Democrats May Say No Dice to New York Casinos, Sheldon Silver Warns

Democrats may say no dice to New York casinos, Sheldon Silver warns
Assembly Speaker supports idea, but can’t guarantee bill will fly with Dems

BY Kenneth Lovett

ALBANY — The push to legalize casinos in New York is no sure bet to pass in the Assembly, the Daily News has learned.

Assembly Speaker Sheldon Silver (D-Manhattan) supports the idea, but he told the Daily News on Monday that he can’t guarantee such a bill would fly with his Democratic conference, which holds a majority in the chamber.

“I just don’t know,” Silver said.

Gov. Cuomo has said he will call on the Legislature in 2012 to make the first of two needed approvals of a constitutional amendment to legalize casino gambling, which would then require a referendum, no earlier than 2013, before it becomes law.

“The last time it came up in the late 1990s, it was a close vote in the conference,” Silver recalled.

In particular, the speaker said he does not know if there is support in his New York City-dominated conference for a casino specifically within the five boroughs.

The News reported in Monday’s editions that Cuomo opposes a casino in densely populated parts of the city, but is open to one at a place like Aqueduct Racetrack in Queens, which already has a virtual casino. Silver’s views are the same on both points.

But much has changed since the Legislature took up the issue in the 1990s, Silver acknowledged.

Not only is the deficit-plagued state desperately in need of new revenue and job creation, but casinos have sprouted up in surrounding states and even on Indian reservations within New York.

“There may be an attitude of ‘Let’s take some of the revenue and keep it [at\] home,’” Silver said.

In addition, there are now nine virtual casinos at New York racetracks, including at Aqueduct, and their existence may help generate support for full-blown casinos.

Senate Republican Majority Leader Dean Skelos, of Nassau County, has said he supports a constitutional amendment to legalize casinos. But a Skelos spokesman said Monday that the chamber has not taken a position on where casinos should be located.

Assemblyman Karim Camara, a Brooklyn Democrat who chairs the Black, Puerto Rican, Hispanic and Asian Legislative Caucus, says the group has not taken an official position on casinos. But while Camara opposes the idea of casinos in areas with high concentrations of poverty, he is open to legalizing them at existing racetrack “racinos” like Aqueduct.

Silver and Skelos recently promised Cuomo that they would pursue within their respective chambers the first of two needed legislative votes on the constitutional amendment.

Some insiders took that to mean the approvals would be automatic. But Silver and Cuomo both told The News that the speaker promised the governor he would raise the issue with his members, but couldn’t ensure the measure would meet with success.

Cuomo wants the constitutional amendment to legalize casinos in the state, but not necessarily spell out how many casinos would be allowed or where they would be located. Those matters would be decided later on by the governor and Legislature before the needed public referendum.

Silver said it is possible that his members will want the constitutional amendment to be more specifically defined than the one Cuomo has talked about.

klovett@nydailynews.com

Gov. Cuomo Puts Full-tilt Casino in City on Table

Gov. Cuomo puts full-tilt casino in city on table

EXCLUSIVE: In wide-ranging interview, Andy reflects on successes in his first year, and the “eye-catching” moves he wants to make in 2012

BY Kenneth Lovett

Updated: Monday, December 26 2011, 2:00 AM

ALBANY — Looking back on a successful first year in office, Gov. Cuomo vowed to make “eye-catching” moves in 2012 — and for the first time said he is open to rolling the dice on a casino in New York City.

“Do I support casino gaming at a New York City location? . . . Yes,” the governor told the Daily News in a year-end chat.

Like Assembly Speaker Sheldon Silver, Cuomo said he doesn’t want to see a casino in a densely populated part of the city, but would be open to putting one at a place like Aqueduct Racetrack in Queens, which already has a virtual casino.

Cuomo expects to call on the Legislature in his Jan. 4 State of the State address to give the first of two needed votes to a state constitutional amendment to legalize casino gambling in the state.

He stressed he is not “preselecting” New York City or any other area for possible casinos.

“I’m not excluding any locations at this time,” he said, adding that establishing a casino in a part of the city “certainly can” make sense because the operation would capitalize on the massive population.

“New York City is a real location,” he said. “Albany is a real location. Buffalo is a real location.”

Cuomo wants the Legislature in 2012 to pass the amendment without specifying how many casinos would be authorized or where they would be located.

He would spend the year coming up with a casino plan, then finalize details in 2013 — the earliest the issue could go before the voters for a required public referendum.

He argued that the economic boost from casino gambling far outweighs the increase in crime and compulsive gambling and other social ills that critics say the industry fosters.

During the wide-ranging interview, Cuomo reflected proudly on his accomplishments in his freshman year as governor — legalization of gay marriage, the creation of the state’s first property tax cap, a new ethics reform law and an on-time budget that cut state spending.

And while he went back on a no-new-taxes pledge earlier this month by supporting a hike on the rich, he coupled it with a modest tax cut for the middle class.

The freshman Democrat spoke of a newfound spirit of bipartisanship in the Legislature, something he has repeatedly contrasted with the gridlock in Washington. His powerful performance this past year has fueled speculation of a 2016 White House campaign, but Cuomo insisted he never even thinks about running for President.

“Not at all,” he said. “I’ve been around too long. I’ve heard too much talk. I’ve seen the movie too many times.”

Of course, his father, former Gov. Mario Cuomo, was dubbed Hamlet on the Hudson for agonizing about a waging a presidential run — and keeping a plane waiting on the tarmac as he mulled over a last-minute entry into the 1992 New Hampshire primary.

Brushing off his clashes with Mayor Bloomberg, most recently over a compromise on a bill to approve street hails for livery cabs, Cuomo described the flareups as normal “stressors in the relationship” between a governor and New York City mayor.

“We get along well; we communicate well; we communicate often,” he said.

But Cuomo warned that Hizzoner may have trouble getting one of his major priorities done in Albany next year: pension reform.

While the governor has listed it is a priority, he said its fate will ultimately come down to whether the Legislature wants to buck the powerful labor unions in an election year.

“I don’t think the unions are ever going to agree to pension reform,” he said.

And with the state having reached multiyear contracts this year with the two largest unions of state government workers, Cuomo admitted he has very little leverage to get them on board with a pension reform plan.

In his upcoming State of the State address, Cuomo is expected to focus on the need for job creation and the importance of rebuilding the state’s roads and bridges and of reorganizing state agencies and public authorities.

Cuomo said years of budget cuts and neglect have left the agencies in far worse shape than he imagined before taking office.

“The economy is not going to come rebounding back in a way that you can buy your way out of this problem,” he said. “And by the way, you shouldn’t buy your way out of the problem — you’re going to have to manage your way out of the problem.”

That said, Cuomo said not to bet on him having a sophomore slump.

“There are going to be eye-catching things next year,” he vowed, playing his cards close to his vest.

klovett@nydailynews.com

DiNapoli Forecasts Weaker Wall Street Outlook

Economic uncertainty due to the European sovereign debt crisis, a sluggish domestic economy, volatile stock markets, and regulatory changes are among the chief contributors to a weakened outlook for Wall Street profits, jobs and bonuses for 2011, according to an annual report on the securities industry released today by New York State Comptroller Thomas P. DiNapoli.

“The securities industry had a strong start to 2011, but its prospects have cooled considerably for the second half of this year,” DiNapoli said. “It now seems likely that profits will fall sharply, job losses will continue, and bonuses will be smaller than last year. These developments will have a rippling effect through the economy and adversely impact State and City tax collections. As we know, when Wall Street slows, New York City and New York State’s budgets feel the impact and that is a concern.”

The economies and budgets of New York City and New York State are very dependent on the securities industry. According to the Office of the State Comptroller, last year securities-related activities accounted for 14 percent of New York State’s tax revenues and almost 7 percent of New York City’s. In addition, one in 8 jobs in New York City and 1 in 13 jobs in New York State are linked to the securities industry. Given the current weakness, tax collections are likely to fall short of City and State targets in their current fiscal years and may decline by more the following year.

DiNapoli’s analysis also found that:

• The member firms of the New York Stock Exchange earned $9.3 billion in the first quarter of 2011 (almost half of the City’s $20 billion target for the entire year), but profits declined sharply in the second quarter. The Office of the State Comptroller forecasts that profits are unlikely to reach $18 billion for all of 2011, which is one-third less than in 2010.

• After adding 9,900 jobs between January 2010 and April 2011, the securities industry has lost 4,100 jobs through August 2011. Job losses are likely to continue given declines in profitability and recent layoff announcements. OSC estimates that the securities industry could lose nearly 10,000 additional jobs by the end of 2012, which would bring total industry job losses to 32,000 since January 2008.

• Cash bonuses are likely to be smaller in 2011, the second year in a row in which they have declined.

• The average salary in the securities industry in 2010 grew by 16.1 percent to $361,330, 5.5 times higher than the average salary in the private sector of $66,120. The disparity between average salaries in the securities industry and the rest of the private sector narrowed in 2008 and 2009, but widened in 2010.

• In 2010, the securities industry accounted for 23.5 percent of all wages paid in the private sector despite accounting for only 5.3 percent of all private sector jobs.

• The State Comptroller’s Office estimates that each job gained (or lost) in the securities industry leads to the creation (or loss) of almost two additional jobs in other industries in the New York City and another job elsewhere in New York State.

“Excessive risk-taking on Wall Street was a major factor leading to the financial crisis and the recession,” DiNapoli said. “Regulatory changes that reduce risk and focus attention on long-term profitability rather than short-term gains will enhance stability. Despite the weaknesses we are seeing, the securities industry remains profitable and is a key component of the economies of New York City and New York State.”

Click here for a copy of the report.

Unions File Multi-Million Dollar Racketeering Lawsuit Against Major Developers Who Conspired to Cheat Workers Out of Wages And Benefits

Unions File Multi-Million Dollar Racketeering Lawsuit Against Major Developers Who Conspired to Cheat Workers Out of Wages And Benefits; Suit Signals Unions’ Stepped Up Efforts to Prosecute Companies That Violate Collective Bargaining Agreements

Today, leaders and members of the Metallic Lathers Union Local 46 and the Mason Tenders District Council of NYC gathered to announce the filing of a multimillion dollar racketeering lawsuit against major NYC developers for illegally conspiring to bilk union construction workers out of millions of dollars in wages and benefits. If found guilty, the defendants, Lalezarian Developers, JMH Development and the principals of HRH Construction, will be forced to pay out more than $21 million under the federal Racketeer Influenced Corrupt Organization (RICO) Act. The suit was filed in Federal Court in Westchester.

The unions announced the lawsuit in front of “The House That RICO Built,” a new residential building at 350 West 37th St where union construction workers were cheated out of millions in wages and benefits.

According to Robert Ledwith, Business Manager of Local 46, “Today NYC unions are sending a strong message to the real estate industry that we are stepping up our efforts to monitor and prosecute illegal behavior that harms working people.” Ledwith added, “We think that this case is merely the tip of the iceberg. We know this kind of illegal activity is widespread throughout our industry.”

According to the suit, from 2007 through 2011 NYC builders Lalezarian Developers and JMH Development conspired with unionized construction manager HRH Construction to knowingly violate the company’s collective bargaining agreements and illegally perform millions of dollars of construction work under the guise of a phony non-union alter-ego firm named Leviathan Construction Management. The projects identified in this suit are:

• The Townsend at 350 West 37th St, built by Lalezarian Developers;
• Brooklyn Gold at 235 Gold St in Brooklyn, built by Lalezarian Developers; and
• 184 Kent Ave in Brooklyn, built by JMH Development.

As a result of this conspiracy, the developers along with HRH’s principals, cheated workers out of more than seven million in wages and benefits that should have been paid to union members and their funds under HRH’s collective bargaining agreements. If found guilty under federal racketeering law, these developers will be forced to pay triple damages which could total more than $21 million.

Local 46 discovered this ruse while investigating the ongoing bankruptcy of HRH construction. The union uncovered specific documents and communications between the various developers and HRH which demonstrate the ongoing conspiracy to perform HRH’s work under the phony alter ego Leviathan, to illegally transfer money from HRH to Leviathan and to defraud union members out of millions in wages and benefits.

“It’s very clear that HRH joined with these developers to fraudulently avoid the obligations of the collective bargaining agreements it signed,” said Tom Kennedy, partner in the law firm Kennedy, Jennik and Murray, who is bringing the case on behalf of the unions. “The dummy corporation, Leviathan, is owned and controlled by the same family, the Singers, who own HRH, and Brad Singer, the CEO of HRH, even admitted this under oath. It’s a particularly shameful ploy at a time of great economic turmoil and hardship for American workers,” he added.

At the press conference, the unions were joined by supporters, including Councilmember Steven Levin, whose district includes JMH’s 184 Kent Avenue. “Developers like Lalezarian and JMH need to respect the rights of working people,” said Councilmember Steve Levin. “I am standing with Local 46, the Mason Tenders and all NYC unions to confront this kind of illegal behavior,” he added.

The suit explains the carefully plotted “Singer Criminal Enterprise,” including transfers of money to the dummy Leviathan Construction Management, the signing of phony agreements, and how the family retained ownership and control of the shell corporation. A chart detailing the conspiracy and the “Singer Criminal Enterprise” was unveiled at the press conference. (The same chart is available for download at Local 46’s website.)

This isn’t the first time the Singer family has been involved in questionable activity. In 2007, an arbitration panel ordered HRH to pay the MTA $6.5 million for overbilling the agency for no show jobs on a major construction project. Gary Singer, who is named in this suit, was sentenced to two years in prison in 1994 for fraud, money laundering and racketeering related to a junk bond insider trading scheme. As a result, Mr. Singer has been barred from being involved with any publicly traded company.

“After helping to investigate this case, we are sure that this kind of activity is happening throughout the industry,” said Mike Locker, President of Locker Associates, a consulting firm that specializes in corporate and industry analysis for unions. “This lawsuit is just the beginning of a more aggressive campaign to weed out this kind of corruption and to ensure that workers get the pay and benefits they deserve,” he added.

Local 46 and other building trades unions are pursuing all avenues available to protect their wages, benefits and market share and to challenge the growing threat of non-union work in the NYC construction industry.

Copies of the lawsuit, a factsheet about the case, and charts detailing the conspiracy are available at Local 46’s website at http://www.ml46.org/.

Statement: Robert Greenstein, President, on New Debt Ceiling Agreement

“The new debt ceiling agreement will achieve the essential goal of avoiding a potentially catastrophic default in the days ahead. But to say that the deal is likely to lead to highly unbalanced results would be an understatement. The deal places the nation on a disturbing policy course and sets what may become important precedents that are cause for serious concern.

“The agreement starts with nearly $1.1 trillion (or $840 billion, depending on the budget baseline used) in discretionary (i.e., non-entitlement) spending cuts over ten years, enforced by binding annual caps through 2021. It also calls for a Joint Select Committee on Deficit Reduction to propose, by November 23, steps to reduce the deficit by at least another $1.5 trillion over ten years, and for the House and Senate to consider the proposal under fast-track procedures that guarantee an up-or-down vote in both bodies, with a simple majority needed for passage. If policymakers achieve less than $1.2 trillion in deficit reduction through this process, an automatic across-the-board cut in non-exempt discretionary and entitlement programs will take effect to make up the difference between what they accomplished and the $1.2 trillion target.

“Multi-year discretionary caps were included in the major 1990 and 1993 deficit reduction agreements — but as part of larger deals that also included revenue increases. As we have noted repeatedly in recent years, establishing multi-year discretionary caps without an agreement on increased revenues makes it even harder to secure revenue increases for deficit reduction in the future. That’s because the only way to secure a bipartisan agreement that includes increased revenues is to provide anti-tax policymakers with significant spending cuts in return, likely including substantial savings from imposing discretionary caps. With 10-year discretionary caps already in place (and with the potential for across-the-board cuts that would further cut discretionary programs), there will be little prospect to exchange substantial discretionary cuts in return for revenue increases unless policymakers who support a meaningful federal governmental role are willing to accept even deeper, more draconian cuts in discretionary programs than the $1.1 trillion in such cuts that the agreement already requires.

“To be sure, the joint committee will have the legal authority to produce a balanced package that includes revenue increases as well as program cuts. But House Speaker John Boehner, in an effort to secure votes for the deal, is undermining the joint committee before it’s even established. Boehner has circulated documents to his caucus claiming the agreement requires the use of a “current-law revenue baseline,” thus “making it impossible for Joint Committee to increase taxes.” That’s not true. Even with such a baseline, policymakers could choose from among numerous tax proposals — such as the President’s proposals to end special tax preferences for corporate jets and tax breaks for oil and gas companies — that would produce deficit reduction. Moreover, the agreement does not require the joint committee to use a current-law baseline. The legislation to implement t he agreement would allow the joint committee to elect to use another baseline, such as the “plausible” revenue baseline that the President’s 2012 budget, the Bowles-Simpson commission, the Rivlin-Domenici commission, and the Gang of Six all used, or the current-policy baseline that was used in the earlier negotiations between the President and Speaker Boehner. This would allow the joint committee to consider tax reform such as the Senate’s Gang of Six proposal, which would not raise revenues relative to a current-law baseline but would raise revenues relative to either the “plausible” baseline or a current-policy baseline.

“That one party is being led to believe that the deal does bar the joint committee from raising tax revenue is not helpful, to say the least. Coupled with Speaker Boehner’s pledge not to name any members to it who will raise any tax revenue at all and to defeat any joint committee-produced package on the House floor if it raises any revenue, this interpretation of the agreement seems to give the joint committee only three places to go — severe cuts in entitlement programs, deep cuts in entitlements coupled with even deeper cuts in discretionary programs (i.e., cuts on top of the at-least $1.1 trillion in discretionary cuts that the annual caps will produce), or a failure to meet its target.
“If the joint committee were only to cut entitlement programs to reach its target, how deep would those cuts be? The deal that President Obama and Speaker Boehner were negotiating several weeks ago would have raised Medicare’s eligibility age, raised Medicare cost-sharing charges, shifted significant Medicaid costs to states, modified cost-of-living adjustments in Social Security and other benefit programs (and in the tax code), and instituted other entitlement savings. Those steps would have saved $650 billion to $700 billion over ten years. The joint committee would have to produce cuts twice as deep — and roughly twice as deep as those in the Gang of Six plan.

“Democrats on the joint committee would not conceivably agree to entitlement cuts, or a mixture of entitlement and deeper discretionary cuts, that deep. Hence, if Speaker Boehner honors his pledge to keep revenue increases off the table, the committee will surely fail — and gridlock and policy warfare will continue.
“The joint committee could agree on a much smaller amount of savings without revenues, but nothing close to $1.2 trillion to $1.5 trillion. Thus, unless Republicans back off their refusal to consider any increase in revenues, the joint committee will fail to produce savings anywhere close to $1.2 trillion — triggering across-the-board cuts that are of unprecedented depth and will remain in place for nine years.

“In key respects, then, this deal postpones the biggest battle over deficit reduction, creating an even more cataclysmic clash that would occur most likely in a lame-duck congressional session after the 2012 election. At that point, three huge events will loom: 1) across-the-board cuts in January 2013, with half of them coming from defense (amidst likely charges that they will jeopardize national security); 2) the scheduled expiration of President Bush’s tax cuts at the end of 2012; and 3) the renewed specter of default if policymakers do not raise the debt ceiling quickly again by early 2013. Where all of that will lead policy debates and outcomes is impossible to predict at this point.

“Anticipating the policy battles to come, we should not lose sight of an alarming development. Those who have engaged in hostage-taking — threatening the economy and the full faith and credit of the U.S. Treasury to get their way — will conclude that their strategy worked. They will feel emboldened to pursue it again every time that we have to raise the debt limit in the future.

“They also will likely continue insisting, in future hostage-taking efforts, that for every dollar we raise the debt ceiling, we must cut spending by a dollar, with no revenue allowed. When one considers that even the harsh budget plan of House Budget Committee Chairman Paul Ryan would require policymakers to raise the debt limit by nearly $9 trillion over the coming decade, one begins to understand the extraordinary results such a policy path would produce over time. Substantial parts of the federal government, including important parts of the Great Society and even the New Deal, would be cut sharply or eliminated. That would put us on a path toward achieving anti-tax activist Grover Norquist’s vision of shrinking government to the point where ‘we can drown it in the bathtub.’

“Having said all this, the agreement has some partially — but important — redeeming features. For one thing, the Administration ensured that half of the automatic cuts that could be triggered will come from defense programs, and that basic entitlement assistance programs for low-income Americans, as well as Social Security, will be exempt from such cuts. This could provide helpful leverage for a more balanced solution in the showdown likely in the 2012 lame-duck session. For another, the deal raises the debt ceiling until about early 2013, so the nation’s credit will not be threatened in coming months by election-year politics. (On a smaller front, the Administration secured beneficial provisions related to Pell grants.)

“Our grim assessment of the agreement, its very disturbing implications, and the policy and political trajectory that we now face are not arguments for defeating the agreement on Capitol Hill. There is an adage that, as bad as things get, they can always get worse. If Congress defeats the package, one or both of two very troubling developments may well occur: we may experience a default, with potentially catastrophic consequences for the economy and the nation’s future; or policymakers may quickly rejigger the deal, making it still more unbalanced in order to secure more arch-conservative votes. These are risks that are simply too dangerous to take — despite the deeply troubling problems that this deal poses.”

Building Congress Forum with Kenneth Adams

Empire State Development (ESD) President, CEO and Commissioner Kenneth Adams said that he and Governor Andrew Cuomo are determined to make New York State more business friendly, during a June 8 New York Building Congress breakfast forum at the Hilton Hotel.

Mr. Adams updated the design, construction and real estate leaders in attendance on a series of important local projects in which ESD is playing an important role. These projects include Columbia University’s $6.3 billion expansion of its Manhattanville campus; the ongoing renovation and expansion of the Javits Center, which will include the East Coast’s largest green roof; and the $5 billion Atlantic Yards project in Brooklyn. He noted that construction of Barclays Arena is slated to open in August of next year, while the development’s first residential tower is slated to break ground by the end of this year.

For a more complete summary and event photos, click here: NY Building Congress

UNIONS FIGHT ZELL

Sam Zell, Founder of Equity Residential Properties

Sam Zell had another tough greeting from construction workers as he arrived at a speaking engagement in Manhattan April 7. “Whose City? Our City!” called out roughly 400 union members outside the Taj Pierre Hotel. “Whose Jobs? Our Jobs!” Recently, union workers protest whenever Zell steps up to a speakers podium in New York City. Demonstrations began after negotiations broke down last year between unions and Zell’s Equity Residential Properties Trust to build 111 luxury apartments at 500 West 23rd Street. “We are not going away,” said Bill Hohlfeld, labor-management coordinator for the Metallic Lathers Union, Local 46, which organized the protests and is carefully tracking Zell’s schedule. When Zell spoke at the Harmonie Club in Midtown Manhattan on an icy winter morning December 14, two dozens construction workers lined the sidewalks, blowing traffic whistles and chanting slogans. When Zell spoke at the New York Public Library November 4 as part of the Bloomberg Real Estate Briefing, 100 workers turned up in the rain.

At the Taj Pierre, protesters wore the jackets and hardhats of several construction unions, including Bricklayers and Allied Craftworkers, the Laborers International Union of North America, and the Ironworkers, including Local 46. Union members handed out leaflets describing Zell’s “shocking record of irresponsible practices,” including “Hazardous Buildings and Tenant Abuse at Equity Residential.” Zell had come to town to sit on a panel at New York University’s 16th annual REIT Symposium. Traded on the New York Stock Exchange, real estate investment trusts like Equity Residential include many of the largest developers in the country and have become increasingly important players in New York City, buying hundreds of existing buildings and development sites. For example, 500 West 23rd Street was a stalled development begun by local developer Shaya Boymelgreen until Equity bought the site.

Zell’s development companies have used union labor in the past. For 500 West 23rd Street, unions offered a 20 percent savings on usual union labor costs, including wages, benefits, and other work rules. But Equity Residential backed away from the deal. Non union contractors are now finishing the apartment tower, which topped off in January. Zell’s company has several other construction projects planned for the City. Local 46 has pledged to keep up pressure on the developer. Labor activists have also started a website equityresidentialwatch.info to document Equity Residential’s “record of poor conduct, tenant abuses and building safety issues.” The website is full of headlines like: “Chicago Better Business Bureau Gives an F Rating to Equity Residential,” and “Tenant Survey Results… Inadequate Security.”

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