The trouble with trickle down

June 28, 1993

Trickle-down economics -- the idea that large, publicly subsidized development projects eventually benefit the poorest members of society in the form of steady employment and decent wages -- is not a popular notion these days among members of Baltimoreans United In Leadership Development. The advocacy group, whose agenda in the past has included such issues as school reform and capping auto insurance rates, is rallying the troops to take on the city's big hotels over what it calls the deplorable treatment of those who clean up downtown each night after the yuppies go home.

BUILD has noticed what is, in fact, a growing trend nationally among businesses: contracting out for such services as janitorial work and security guards. The result has been the rapid rise of PPTC two-tiered work force, one comprised of full-time, upwardly mobile white-collar workers, the other of poorly paid part-timers and temps enjoying few benefits or prospects for advancement.

Like other cities, Baltimore has sought to replace lost factory jobs with new service industries. But service-sector jobs usually don't pay as much as those they replace, nor do they offer the health and other benefits that came with factory employment.

BUILD argues, rightly in our view, that the public expects projects receiving large public subsidies to return real benefits to the community in the form of good jobs. Yet while millions of taxpayer dollars have subsidized downtown development, many of the people who work there as janitors, cleaning ladies and security guards end up at area soup kitchens and shelters because they can't live on what they take home.

BUILD's solution is to force hotel owners to stop using part-timers and temps and increase wages and benefits packages. If necessary, it would use its political clout to block any public subsidies until the hotel companies agree to such a plan.

Over the years BUILD has come up with creative ways to spur lawmakers to address urgent problems they'd rather ignore. But in the current tottering economy we don't see how the latest proposal can succeed, especially since the hotel industry, BUILD's major target, is already on shaky footing. The local job market reflects shifts in the global economy that aren't likely to be affected by what a small group of employers do.

What groups like BUILD can do is work with local businesses to improve conditions for part-timers and temps by investing in affordable housing, food co-ops and community child-care sites, and by helping workers upgrade their skills. No one pretends that's a perfect solution. But surely it is a more practical approach than coercive methods that could easily turn out to be counter-productive.

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