Printer Friendly version

Published: April 30, 2007

DAILY NEWS
Be Our Guest
BY JAMES PARROTT and BILL THOMPSON

The city and state are reportedly in negotiations with JPMorganChase, the banking giant, over possible state and city subsidies to build a new downtown headquarters.

Local and state government should make this much absolutely clear, without delay: under the current circumstances, JPMorganChase will not get an additional dime from the taxpayers of New York.

More than that, we should seize this opportunity to set a brave new course: This and all future corporate subsidies will depend not only on a company's overall economic contributions to the city - but also on the way that company treats the working-class men and women who go to work every day in the glimmering towers the city and state help build.

JPMorganChase - which reported record net income of $4.8 billion in the first quarter of 2007 - already qualifies for generous subsidies to build in lower Manhattan, as any company choosing to do so would.

Considering the white-hot condition of the Manhattan real estate market today, it is astounding that anyone could even for a moment entertain the notion that, on top of these "as-of-right" subsidies, taxpayers should lavish still more public money on a corporate giant for making a real estate investment that simply moves jobs from midtown to downtown.

The fact that there is discussion of this at all under these market conditions suggests that a strong signal must be sent to business that we need new rules of the game.

It's time for the city and the state to make sure that when businesses are subsidized, the jobs created pay decent wages and benefits.

It is simply unacceptable that the highest-paid workers in some of New York's most valuable office towers are fed by cafeteria workers or protected by security guards who are paid poverty-level wages and receive inadequate benefits. The city and the state should discourage this practice. Yet JPMorganChase's current building security company (at its Park Ave. headquarters) pays its workers as little as $8.50 an hour - a sub-poverty wage - without decent benefits.

With more and more corporations contracting out support services, we need to make it clear that the employees of service contractors are not second-class citizens.

Then, to fix the problem going forward, the city and state must start linking corporate subsidies to requirements that good wages and benefits are paid to all affected by a subsidy deal. We should start by altering two of our major economic development programs - building in job standards as part of a broader reform of local Industrial Development Agencies and as part of legislation extending the Industrial and Commercial Incentive Program.

While it's too late to attach job standards to the various as-of-right lower Manhattan incentives, the Port Authority, which owns the building site in question, could persuade JPMorganChase to commit to responsible employment standards as a condition for purchasing or leasing the land. This is not a lot to ask for a multibillion-dollar company that stands to get at least $100 million in tax breaks just by calling downtown home.

In cases like this, fairness demands that our leading businesses should be asking not only what New York will do for them, but also what they can do for New York.

Parrott is deputy director and chief economist at the Fiscal Policy Institute. Thompson is the controller of the city of New York.

Printer Friendly version