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Companies with NIZ loans may be prodded to pay workers around $12 hr

By Joe McDonald, WFMZ.com Reporter, news@wfmz.com
Published On: Sep 11 2013 11:03:38 PM CDT
Updated On: Sep 12 2013 05:28:35 AM CDT
ALLENTOWN, Pa. -

Developers who secure taxpayer-financed loans for projects in Allentown's Neighborhood Improvement Zone could soon be asked for a pay back that would directly benefit the workers employed by the businesses they bring in.

The authority overseeing the development of the NIZ decided Wednesday to study a proposal that would offer extra subsidies to developers willing to set a floor on the lowest hourly wage paid to workers at about $12 -- around 60 percent more than current minimum wage of $7.25.

The proposal came from authority member Alan Jennings during a discussion of revised guidelines that the Allentown Neighborhood Improvement Zone Development Authority would use to determine which projects will be eligible for financing help.

The authority ultimately decided to adopt the revised guidelines without Jennings' proposal, but agreed that a committee should study the idea, which could be the basis of amending the guidelines at a later date.

Jennings did not mention specific ways developers could be enticed to set the wage floor, but he was adamant the authority should "strengthen the hand of prospective employees" in the NIZ with "a floor [they] can survive on, feed [their] family and pay the rent."

The NIZ, Jennings noted, "is a massive manipulation of the marketplace ... and the best thing we can do is manipulate the marketplace for the people getting the jobs [and] elevate the quality of life for the people of Allentown."

Chairman Seymour Traub said the authority guidelines make reference to "the number and types of jobs ... and the degree to which developers should hire applicants living near the NIZ."

But authority member Ethel Drayton-Craig asked, "How would you monitor that? The spirit is here [in the guidelines], but it can mean absolutely nothing."

Jennings added, "The language [in the guidelines] is very soft." The authority would be do better "offering [specific] special incentives for better paying jobs in Allentown."

Jennings said he would be agreeable to having the minimum wage floor take effect in 15 months "so as not to scare off initial investors."

"Why wait 15 months if you're going to restrict what people can do?" Traub countered.

Before the authority adopted he guidelines, a change offered by Jennings was accepted.

No NIZ loan money may be used to pay for business relocation costs, or the costs of relocating a business' employees.

However, a NIZ loan money can be used to relocate people who might be displaced by a NIZ project.