Shadow-boxing

Comments in response to: http://cityroom.blogs.nytimes.com/2011/05/12/bloomberg-administration-is-criticized-on-wages/

1.
Larry Eisenberg
New York City
May 12th, 2011
5:05 pm
Developers, subsidized, are
So fragile, so easy to jar,
Four hundred a week
Such great havoc would wreak,
And lifestyles would grow so bizarre.
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2.
Paul '52
New York, NY
May 12th, 2011
5:07 pm
I'd like to propose a "win-win" for the Council:

Get the City Council in a room with the Kentucky State Legislature. The Council can "win" by convincing the Legislature that its powers don't encompass amendments to the laws of geology, physics and biology. The Legislature's "win" is convincing the Council that its powers don't include amending laws of economics.

Both sides can then come away happy.
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3.
Edward
New York
May 12th, 2011
8:44 pm
I believe there is a disconnect. The real estate developers are the owners of the mall or shopping center but they lease space to retailers. The wage bill is to be imposed on the retailers that lease space in the mall/shopping center. The retailers are not receiving any benefits that I am aware of, unless I am missing something in the overall transaction.

The retailers can be granted a sales tax credit for the increase in wages over the federal minimum wage so they are not at a competitive disadvantage to other retailers in other malls/shopping centers.

I do not appreciate the angry tone of the elected officials. Many residents in working class communities would welcome the jobs and new shopping opportunities in their neighborhood instead of traveling to Rockland, Nassau and Westchester counties to shop.
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4.
followingsylvis
New York City
@Edward I appreciate your sincerity on this issue, unlike some others (I'm looking at you, @Paul52) I believe you really are trying to find a just solution to this issue.

Even though the wage mandates will show up on the retailers' payroll, it is the owners of the mall property who will ultimately have to \"eat\" the difference.

Look at it this way - the goods and services provided in a mall have to correspond to local market prices. So total revenue is fixed within a fairly narrow range by the pricing structure of the retailer. After inventory is paid for, this money must be then divided up among employees, retailers, and the mall owners. Retailers, although they vary in the amount that they are able to lay claim to, operate within a relatively fixed margin, again depending on their business model.

Rent, on the other hand, is peculiar in that it has no costs associated with it (taxes being only an after-the-fact subdivision of profit in the case of commercial property) - it is pure ownership income. So when push comes to shove, it is the rentier who must lower his price.

To put it simply - the landlord will take as much of a retailer's profit as he can, but he doesn't want to kill the golden goose, except, occasionally, as a symbolic gesture to frighten goslings like our friend Paul52.