AUSTIN, TX — Just days before council votes on an ordinance that would require local employers to provide their workers with paid sick leave — a historic measure if passed, making Austin the only city in the South with such a mandate — critics of the move have intensified their opposition.
Two days before the Feb. 15 council vote that would compel Austin employers to provide their employees paid sick leave, the Austin Chamber of Commerce released a study detailing the impact such a measure would have on companies — particularly what they say would be a disproportionate impact on micro and small business owners.
The chamber also disputes data released by proponents of the ordinance — not just claims made by council member Greg Casar who first proposed the ordinance but his like-minded colleagues on the council dais and officials of nonprofits advocating for the working class who are pushing for the measure to pass.
In their rebuttal to proponents of the ordinance, chamber officials take issue with some of their most fundamental talking points. They single out a claim by the nonprofit Austin Strong that 223,000 workers in Austin work at companies lacking a formal paid sick leave policy: “We cannot find an actual study of Austin employers,” chamber officials wrote succinctly.
Against this backdrop of local drama pitting grassroots advocates of the measure against powerful business interests opposing it altogether or asking for a vote delay, the billionaire Koch brothers have indirectly entered the fray all the way from their Wichita, Kansas, base. As reported in The Guardian, Charles G. Koch and David H. Koch — commonly referred to as the Koch brothers — have unleashed their personally financed National Federation of Independent Business (NGIB) to enter into the local fray to kill paid sick leave momentum in Austin. (See: Koch-backed group fights paid sick leave laws as flu sweeps US).
Based in Wichita, Kansas, the Koch brothers’ interest in the local initiative was piqued given their long history of lobbying against what they view as government intrusion in the private sector. The billionaire brothers gained prominence in their well-orchestrated fight against the Patient Protection and Affordable Care Act — commonly known as Obamacare.
More recently, the brothers’ NFIB marshaled its forces in Maryland, where similar action was being mulled. Lawmakers there had moved to override the governor’s veto of a bill allowing 700, — workers to receive sick leave, as The Guardian reported. The NFIB emerged amid the local debate, complaining the initiative would create job-killing costs and mandate “devastating sanctions” for failure to comply, The Guardian reported.
Last Thursday, the NFIB backed a failed attempt to delay the Maryland law, which went into effect on Sunday. Once camped out in Maryland where they engaged in battle, NFIB forces have now pivoted their focus in Austin, where rhetoric for and against a local version of the employer requirement is reaching a fever pitch.
The Work Strong Austin Coalition endorsing the mulled ordinance issued a rebuke to the Koch brothers’ meddling in local affairs: “We strongly condemn activities conducted by groups linked to the Koch Brothers and their attempts to stop over 200,000 Austin men and women from earning paid sick time,” officials wrote in a prepared statement. “Members of Austin City Council face a clear, moral choice to support working families and we urge them to reject the politics of fear and lies peddled by national business groups meddling in our community.”
With heightened interest nationally on what’s going on in Austin, the paid sick leave fight is no longer just a local squabble. Free market mavens see a threat in passage, envisioning the progressive ripple effects such ordinances might have elsewhere in the country as other communities emulate the moves. Given those dynamics, the city is now cast in the national spotlight with the proposed employer mandate, bringing out opposing forces from far-flung places to join battle with local combatants in a shared mission to kill the ordinance.
Indeed, as debate rages in Austin two days before the historic vote, the dynamics of the debate have taken on unforeseen nuances. Unlike the Koch brothers, we’re not in Kansas anymore — figuratively speaking.
The Austin Chamber re-entered the arena on Tuesday, reiterating concerns over the detrimental impact might have on local businesses. Chamber officials cited a recent University of Washington report showing how Seattle employers have responded to a 2012 paid sick leave mandate there:
8.2 percent of employers raised prices on consumers.6.4 percent of employers decreased pay raises or bonuses.5.3 percent of employers cut vacation time.2.7 percent of employers reduced their number of employees or moved employees out of the city.
“The Chamber conducted a similar estimate of the initial paid sick leave proposal using the figures quoted by advocates for paid leave and found the impact to be nearly five times higher — approximately $140 million annually,” chamber officials wrote. “Public policy should be made with actual data and analysis.”
To buttress their premise, chamber officials outlined what they view as the potential economic impact of a paid sick leave requirement in Austin:
“WorkStrongAustin states that 223,000 workers in Austin work at employers who lack a formal paid sick leave policy. We cannot find an actual study of Austin employers. Coincidentally, the U.S. Bureau of Labor Statistics published an estimate that 37% of all U.S. employers lack a formal paid sick leave policy.””For the definition of part-time employees, we used the U.S. BLS national average of 1,700 hours annually.”Average cost to private sector employers who do not have a formal paid sick leave policy is estimated to be $0.37/hour and $0.92/hour for public sector employees.
But advocates for the ordinance have their own set of data used to support the measure, some of it extrapolated from the same sources cited by opponents. Local nonprofit Austin Strong is among a coalition of like-minded groups — Workers Defense Project and Grassroots Leadership among them — that focus instead on the benefits a paid sick leave ordinance might have on the local economy.
Across the country, proponents note, 41 one paid sick time ordinances have passed at various cities, counties, and states yet managing to maintain thriving economies and a robust small business base.
In Massachusetts, employment in the hospitality industry has increased from 351,500 to 367,900 — a 4.67 percent increase — since implementation of its own paid sick leave measure in July 2015. Supporters of the ordinance cite U.S. Department of Labor figures here to buttress their point.In Philadelphia where a paid sick time ordinance passed in 2015, the Koch brothers-backed NFIB made dire predictions the mandate would reduce employment by 4,000 jobs. Instead, employment in the leisure and hospitality industry there grew from 66,200 in March 2015 to 78,200 in October 2017 — an increase of 18.1 percent. Ordinance proponents again cite DOL-cited figures backing the assertion here.In Seattle, where a paid sick ordinance was passed in 2011, fears of resulting job-killing costs haven’t come to pass, according to a University of Washington study. Instead, “All three measures of employment robustness – the number of Seattle firms with more than four employees, total number of Seattle employees, and total Seattle wages – grew in absolute terms over the first year of the ordinance,” researchers fund. Data failed to support detractors’ predictions of a corporate exodus, and instead a higher, post-ordinance number of employers emerged instead, according to the study.
Yet in their Tuesday report, chamber officials continue to insist a local ordinance would be detrimental to local businesses. But even officials there have previously conceded the unknown repercussions of a paid sick time ordinance, previously calling on council to delay its vote for more study into predicted “unintended and unknown” impacts.
The nebulous future under such an ordinance is telegraphed in the chamber’s latest clarion call against it, officials acknowledging use of basic “back of the napkin” math in estimating the potential private sector impact: “223,000 employees x 1700 hours x $0.37/hour = $140 million economic impact, which will fall disproportionately on micro and small business owners annually,” chamber officials wrote. “Potential public sector impact also included as we expect this discussion to continue in the largest employment group in our area: we estimate an additional $9.4 million in currently unbudgeted expenses. Keep in mind, this does not include additional staffing replacement costs for shift work.”
To illustrate their point, chamber officials provided a chart detailing the likely impact in the corporate landscape, using the aforementioned non-budgeted expenses at Travis County, the City of Austin and Austin ISD as a gauge of envisioned financial impact:
There’s lies, damned lies and statistics, Mark Twain once mused. The dizzying onslaughts of statistics used by both sides of the debate to fortify their arguments can make a mere spectator to the fight go cross-eyed. But come Thursday, Feb. 15, only one victor will emerge. And therein will come the moment of truth.
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