San Marcos Mercury | Local News from San Marcos and Hays County, Texas
Email Email | Print Print --

December 15th, 2008
Freethought San Marcos: Incentives for low-wage jobs makes bad policy

Freethought San Marcos: A Column
Mercury Columnist

In the discussions about economic development incentives, most of the focus is on the businesses and development projects that might locate or relocate in San Marcos. While there may be promises to create a certain number of jobs for each of the projects, what is missing from most discussions is concern about the quality of those jobs. That is, do they pay a living wage?

The significance of this question is apparent if one looks at what a living wage is. The Living Wage Project, created by research funded through Penn State and the Ford Foundation, helps understand the issue. The project created the Living Wage Calculator, which estimates the cost of living in every community or region in the US, and determines the wage necessary to satisfy that cost. The calculator can be found at <>.

The calculator lists typical expenses, the living wage, and typical wages for various locations in the country. The idea that the prevailing wage offered by the public sector and key businesses in a community should reflect a wage rate required to meet minimum standards of living is not new, but it has been widely ignored by public officials as a measure of the success of public efforts to attract and keep business and industry in a community.

For Hays County, a living wage for a family made up of one adult and one child is $17.37 per hour. This is the hourly income needed to pay for food, housing, transportation, health care, childcare, and the other expenses essential for a minimum standard of living. The sorts of jobs that pay wages below the living wage for Hays County include sales, office and administrative support, food preparation and serving, building and grounds cleaning and maintenance, installation, maintenance and repair, personal care and services, transportation and material moving, and entertainment. With a few exceptions, these are the kinds of jobs for which the San Marcos City Council has been providing development incentives for the past 20 years.

I am not suggesting that these low-wage businesses should not exist. They provide services needed in every community. My objection is that public funds are being used to encourage businesses that do not pay a living wage. To me, this is the worst sort of public policy. It is a policy that benefits the landowners, the contractors, the real estate community, the building supply companies, and the land speculators. But the policy does not support the needs of the average San Marcos resident who needs a job that pays a living wage.

The political problem, of course, is that the business community is organized into chambers of commerce, economic development groups, professional associations, and the like, while low-paid workers are not organized. Politicians respond to organized efforts to influence their votes. If you are not organized, most politicians won’t give you the time of day.

The incentives policy adopted by the San Marcos City Council, called the “Economic Development Objectives and Goals,” does mention jobs in several places. It even provides that additional incentives are available if developers satisfy five special criteria out of eleven options. One of those eleven criteria is the creation of jobs above $17 per hour. But the emphasis of the basic incentives policy is on sixteen factors, only one of which is about jobs, and that jobs factor is vague: “Creation of permanent employment opportunities. The number and types of jobs to be created or retained (full-time vs. part-time) and whether or not benefits for employees will be provided.”

There are no standards in this policy, only the unbridled discretion of members of the city council as its members review projects that want incentives.

The city’s incentives policy is focused almost entirely on the amount of the incentives that will be offered based on criteria other than the quality of the jobs created. There is more concern for the size of the increased tax base that will be created, with little concern for those who will take the jobs that will be created in San Marcos.

In one sense, local development incentives are offered from the same frame of reference as national policy on assistance to financially troubled lenders. In that case, concern is for the stockholders and executives of those companies, rather than for the average worker of the companies and those average people with whom they do business – the mortgagees. When the banks and mortgage lenders, guarantors, and stockholders were bailed out recently, there were no protections provided for workers of those companies or for mortgagees. If the bailouts had been aimed at the mortgagees and the protection of the jobs of workers, the lenders would have been saved as well. Instead, the lenders could lay off employees and foreclose on mortgages at will, which they have done.

This same “tinkle-down” theory (as Jim Hightower calls it) is at play in San Marcos, to the detriment of the average worker. If the local incentives policy placed the main emphasis on the quality and permanence of jobs that would be created, the developer would benefit, but workers would not have to rely on public benefits “tinkling down” to them through development projects. They would benefit from receiving a living wage for their work.

The city council’s main focus on the size of the taxable property to determine the amount of the public incentives offered theoretically helps taxpayers down the road, after the incentives cease being given. But those who hold the jobs offered by the projects are never assured permanent, living wage jobs.

Having more families spending living wages here in San Marcos would make this economy more robust than giving public benefits to developers, and it helps the working class in a way that focusing on helping the business class never does. Encouraging projects that pay mostly sub-living wages is the wrong way to spend public resources.

Email Email | Print Print


One thought on “Freethought San Marcos: Incentives for low-wage jobs makes bad policy

  1. Lamar, you really have it nailed. Exactly.
    A lot of the development I see is a business with a manager or two per shift and a bunch of part-time, low wage, no benefits staffers. A person can work a lot of hours at 2 or 3 of these jobs and have no life at all. We don’t need more jobs like these. We need businesses that hire at a decent wage and are willing to support their people & offer them a future. I believe we should not try to entice low wage businesses to come here.

Leave a Reply

Your email address will not be published. Required fields are marked *