A Memphis City Council committee discussed Tuesday raising the minimum pay for those working at companies incentivized to do business here.
Councilmember Martavius Jones wants to raise the minimum hourly wage to $21 at businesses that receive pay in lieu of taxes (PILOT) incentives through the Economic Development Growth Engine (EDGE) for Memphis and Shelby County.
“This is not that I’m against incentives,” Jones said. “I know we have to play the game. This is about what we incentivize and what dollar amount we incentivize.”
Currently, the minimum wage requirement for PILOT projects is $13 an hour, which Jones said is less than a livable wage.
PILOT projects give temporary tax abatements in return for a commitment to contracting local minority- or women-owned businesses, creating jobs, and making other community investments.
To date, EDGE has incentivized 128 PILOT projects. Recipients include large companies such as ServiceMaster and Amazon to local companies, such as Hollywood Feed and Superlo.
Reid Dulberger, president and CEO of EDGE said while he would like to see wages increased, the resolution “has the realistic probability of hurting the people we say we want to help.”
Dulberger said EDGE must compete with neighboring communities that offer tax abatements.
“It’s a competitive world,” Dulberger said. “We have wage requirements now that our competitors don’t have. We have a health insurance requirement now that our competitors don’t have.”
These additional thresholds are good public policy, Dulberger said. But if the standards are set too high, good public policy becomes “ineffective,” he said.
Councilmember Worth Morgan opposed the resolution, saying that Memphis does not have the leverage to require more without incentivizing more.
“It’s pretty clear that if this resolution were to pass, we would potentially lose out rather than gain more,” Morgan said.
Councilmember Patrice Robsinson said if businesses don’t want to come here, “then so be it.”
“We want them to make an investment in us and we have an opportunity to make an investment in them,” Robinson said.
Robinson suggests having a sliding scale, offering greater incentives for companies that pay higher wages.
“We have got to be intentional about working on poverty in our community,” Robinson said. “If we reduce poverty, we reduce crime, we increase educational rates.”
Though the base pay requirement is $13, Dulberger said for projects approved in the last five years the average wage is $58,000.
If EDGE was to increase the base pay today based on the 2020 Shelby County annual average wage, Dulberger said it would only raise it to $15.
Councilmember Cheyene Johnson proposed amending the resolution to allow companies to pay $21 an hour if they first receive city council approval.
“At least people can come in and explain why they can’t pay $21 an hour,” Johnson said. “They may have a reasonable explanation for it.”
Dulberger said requiring companies to come before the council would be a “significant hurdle,” possibly costing Memphis a number of projects.
“They don’t want to come before any public body,” Dulberger said. “They want to know if they’re getting an incentive or if they’re not getting an incentive. They prefer it all be done confidentially.”
The council will return to the discussion at their next meeting on Tuesday, September, 7.