As more cities reach the harsh realization that public financing for sports venues is always a losing proposition for taxpayers, Philadelphia has now passed a bill aimed at recouping some its money via mandated higher wages at stadiums and arenas.
This week, Philadelphia City Council unanimously voted to expand prevailing wage laws to employees or contractors working in “city-subsidized” buildings such as the convention center, hospitals, and stadiums. This also includes many university buildings. The bill will raise the average wage for service workers, such as security guards or janitors, by several dollars an hour.
Per the language of the bill, the following workers will soon see pay raises: “watchman, guard, doorperson, building cleaner, janitor, custodian, porter, maintenance person, handyperson, elevator operator or starter, window cleaner, desk clerk, housekeeper, gardener, [and] groundskeeper and cleaner of public property or the public right-of-way.”
What makes this new law particularly interesting is that Philadelphia was already one of the few municipalities in the country with a prevailing wage law for building services workers. Now, however, more properties and facilities will fall under the purview of a mandatory wage.
This means that any facility that received a tax break or direct financial assistance from public funds must now pay higher, and potentially above-market wages, to its service employees. In Philadelphia, the law could certainly harm the bottom lines of the publicly-financed Citizens Bank Park and Lincoln Financial Field.
As PlanPhilly reported, the current prevailing hourly wage for unarmed security guards is $13.28 plus $4.27 for benefits. The prevailing wage for janitors is $16.89 plus benefits. Undoubtedly, many workers at Penn, Temple, and the pro stadiums are about to see significant wage increases.
Yet, higher operating costs almost always translates to higher prices for fans, whether at the concession stand or box office. It could also lead to a reduction in positions and hours as this new wage law will apply to both union and non-union positions.
Of course, the theory is that higher wages means more money in employees’ pockets, less reliance on government benefits, and more tax revenue for the City. Remember, Philadelphia has a 3.9 percent wage tax for city residents. Let’s say a security guard at Eagles games receives a $2 per hour raise. That is almost eight cents per hour coming back to the City. Multiply that out over the course of the year and it is a nice haul for the City’s coffers.
Essentially, City Council passed a new tax on businesses in the name of supporting workers — a tried and true strategy of a one-party town. At this point, though, it is too early to know how this increased tax revenue will actually benefit the taxpayers who originally provided these stadiums with public assistance.
If City Council keeps with tradition, it will look for a new way to tax its businesses, property owners, and residents. Higher wages just means more to tax. Consider it the government’s Brotherly Love.