screen-shot-2015-09-23-at-11-18-42-am-150x150-3108433A Syracuse Common Council member says he’ll introduce a city ordinance forcing city government contractors to hire one-fifth of their workers from city neighborhoods.

Councilor Khalid Bey’s proposal reflects an understandable desperation to jump-start employment growth in a city with 33.2 percent poverty rate.

It’s also a really bad idea.

Like other struggling upstate New York cities, Syracuse has a huge problem with old, rundown infrastructure—and a lack of money to fix it.  Among other things, as Mayor Stephanie Miner has pointed out, the city has 556 miles of aging (and at times collapsing) water mains, which would cost more than a half-billion dollars to fully rebuild and replace.

Syracuse urgently needs high-quality capital improvements, delivered as cost-effectively as possible, to help create an environment that can attract and retain more jobs while expanding the tax base. But the pursuit of those goals would actually be undermined by a focus on job set-asides, rather than on squeezing maximum value out of scarce capital dollars.

As reported at Syracuse.com:

The so-called local hiring ordinance would require companies that have city contracts worth at least $100,000 for construction work, public works projects and certain other services to recruit Syracuse residents to perform at least 20 percent of their labor. And half of those laborers must be referred by local employment agencies or reside in high-poverty Census tracts.

According to one prominent supporter, Bey’s idea is modeled after an existing city ordinance in Cleveland, Ohio. But that city’s policy doesn’t seem to have yielded positive results: Cleveland’s poverty rate has actually gotten worse since the hiring preference was instituted, growing from 31.1 percent in 2003 to an average of 35.4 percent between 2009 and 2013, according to the latest Census data.

Similar policies have proliferated widely enough among other Ohio cities to inspire a legislative proposal to ban local preferences in the Buckeye State. Commenting on the bill, a recent Columbus Dispatch editorial made some important points that could be equally applicable to the Syracuse proposal:

Just like its cousin, “buy local,” the “hire local” quotas can end up hurting the very people they’re meant to help. Once one city passes such a quota, a neighboring community is apt to do the same. Then another. Pretty soon, people are disqualified for good-paying jobs outside of their ZIP code.

What’s more, companies that might otherwise bid on a job might not have enough local employees to meet the quotas. As bid pools become shallower, taxpayers are more likely to get soaked.

To the extent that a Syracuse hiring preference does steer jobs to city residents, it will come at the expense of workers living outside the city—including other Central New York residents whose state and local tax dollars will go to subsidize the work.

The New York State chapter of Associated General Contractors of America immediately attacked Bey’s proposal as “plainly unconstitutional,” noting the industry’s efforts to create job training programs for inner city residents, and making this important point:

… Construction work is transient; a firm and its workers who are this month working in Syracuse may next be performing work in Rochester.  What happens to those Syracuse workers who, because other communities adopt similar local hire provisions, are left home without work?  No one wins.

Construction, by its very nature, requires a trained, skilled workforce—and one doesn’t arrive at that status overnight.  That’s why real workforce development in all of our communities is the right solution for both meeting the workforce needs of the construction industry and expanding economic opportunity for all.

Serious legal questions and economic inefficiencies aside, a hiring preference would be deeply unfair —just like long-standing federal and state policies imposing “goals” and preferences for minority-owned and women-owned businesses. By definition, such mandates lead to higher costs while denying work to firms owned by people who don’t fall into the preferred racial, ethnic and gender categories.

The Bey proposal in Syracuse emerges from the same sort of magical thinking that has inspired anti-poverty advocates to embrace a job-destroying, statewide $15 minimum wage.

Syracuse residents—especially its poorest—need and deserve better.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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