Austin City Council Passes Landmark Wage Requirements for Development Incentives

Last week, the Austin City Council voted 6-1 to require that construction workers be paid the prevailing wage by companies who seek economic development incentives from the city. Austin is now the second and largest city in Texas to have such requirements. The resolution was sponsored by Councilmembers Mike Martinez, Kathie Tovo and Laura Morrison, and supported by the remaining members with the exception of the Mayor.

The action is a substantial victory for those who are concerned with the rising state of inequality as the city's economy continues to burn red hot. Unfortunately, Austin's economic success hasn't been universally felt by those helping to build it, which is why with over 100 new people moving to Austin everyday, it is imperative to ensure that those building and making space for them are also able to afford to live here as well.

There is a moral imperative that those who work hard should be able to afford to support themselves, but there is also a simple fiscal equation that puts those making less than a livable wage on the public dole, which amounts to another form of corporate subsidy.

The resolution does provide an exemption to certain requirements (Section 1. F-H) for companies based on a two-thirds vote from City Council and includes the living wage portion, domestic partner benefits and health insurance for full-time employees.

The new FBIM can be found here and includes the following:

The Firm will ensure that all construction work funded by the Firm complies with the City's established prevailing wage program that is used on City of Austin public works projects. Unless living wage is exempted through the exception process, the City of Austin's living wage will apply to any prevailing wage classification that falls below the living wage.

Representatives from labor, the faith community and social justice organizations were on hand to lend their support.

"Texas is the deadliest place in the country for construction workers. Poverty rates are on the rise, even for families with two parents working full-time. We can begin to address these challenges by asking companies that receive massive subsidies to treat their workers fairly," says Gregorio Casar, the Political Director at Workers Defense Project.

The vote was taken after about several hours of testimony with 254 individuals signing on in favor of the resolution and just four opposing it. One of those speaking against included David Ford, President of the Associated Builders and Contractors for Central Texas, who testified that, "ABC strongly opposed the mandatory requirement of prevailing wage and living wage as a requirement for the incentives," and that it will, "hinder the Austin City chamber the ability to bring companies to Austin."

Council Martinez wasn't taking this claim at face valuing asking, "If it is so difficult to go back and forth (with varying wages), why are your members continuing to apply for public contracts as well as private?"

Coincidentally, on the same day the new measures passed, Business Journal declared Austin's economy the strongest in the nation of 102 major metropolitan areas.


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