Why didn’t a proposal to raise the bar for tax breaks receive support at City Council? – mlk50.com

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Why didn’t a proposal to raise the bar for tax breaks receive support at City Council? – mlk50.com

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The Amazon Distribution Center at Holmes and Tchulahoma roads in Southeast Memphis received an Economic Development Growth Engine for Memphis & Shelby County tax break in 2017. EDGE incentives are commonly used to lure warehouse jobs to the city. Photo by Andrea Morales for MLK50 

After hours of debate spanning six months, Memphis City Councilman Martavius Jones couldn’t convince any of his colleagues that the city should stop giving tax breaks for jobs that pay less than $21 per hour.

Currently, companies with jobs that pay more than $13 per hour and provide some form of employer-subsidized health care can qualify for incentives from the Economic Development Growth Engine for Memphis & Shelby County that cut their property taxes by 75% for up to 20 years. 

To Jones, the proposal was an obvious way to raise wages for impoverished Memphis workers. While $13 is a living wage for a Memphian living alone — according to the Massachusetts Institute of Technology’s Living Wage Calculator — it’s only half of the living wage for a single parent. Jones doesn’t see why the city is incentivizing jobs that can’t support someone living with a child or a second adult.

Despite receiving some support from colleagues earlier in the process, Jones ended up as the only vote in favor of his proposal at the council’s economic development, technology and tourism committee meeting on Tuesday. 

Near the end of the meeting, Councilman Edmund Ford Sr. said he wanted to — as chairman of the committee — table the proposal again since it didn’t seem like the discussion was going anywhere. Instead, Jones asked that the proposal be voted on, despite it seeming clear he would lose. After the meeting, he said he made that decision because he didn’t want the current wage floor to continue into 2022.

“I thought my colleagues would say we’re tired of living in (one of America’s poorest cities).”

Memphis City Councilman Martavious Jones

Still, Jones said the council surprised him.

“I thought my colleagues would say we’re tired of living in (one of America’s poorest cities),” Jones said. 

Those colleagues didn’t see it that way. They were more convinced by the arguments of the president of the Economic Development Growth Engine for Memphis & Shelby County and two leaders from the Greater Memphis Chamber. 

Councilman JB Smiley Jr. — who recently announced his campaign to be the Democratic challenger to Gov. Bill Lee — said he was inclined to trust the EDGE and chamber leaders, just like he trusted doctors on whether or not to implement a mask mandate.

“All of the experts tell us, if we do this, we’ll lose jobs,” Smiley said. “If we have to choose between jobs and higher wages, I’m going to choose jobs.”

EDGE president Reid Dulberger — who has consistently opposed the increase  — argued that the proposal would cost Memphis thousands of jobs and that more jobs of all types would eventually lead to higher pay. Wages rise when there are more jobs than available laborers, he said, which means workers have plenty of options. Councilman Chase Carlisle said this point has been proven during the current “labor shortage.”  

Economic Development Growth Engine for Memphis & Shelby County president Reid Dulberger said Jones’ proposal could cost Memphis thousands of jobs, including high-paying ones. Photo courtesy of the Economic Development Growth Engine for Memphis & Shelby County. 

“We all want the same thing, for Memphians to have a high standard of living, to earn a living wage,” Dulberger said during a previous council meeting. “We just believe this is not the way to do it.”

Smiley said he was particularly convinced by Ted Townsend, the chief economic development officer for the chamber. Townsend said the new policy would stop the city’s ability to incentivize an unnamed local Black-owned business that is about to embark on a $26 million expansion.

“(The black-owned firm) is not going to be able to start wages out as $21 per hour,” Townsend said. “We want to encourage that kind of job creation in our community.”

Jones questioned why Smiley and the others would trust Townsend when the chamber is funded by businesses and, therefore, inclined to care more about them than workers. As for Dulberger’s argument about more jobs creating higher pay, Jones said he doesn’t disagree in theory, but he doesn’t think the $21 floor for incentives would lead to Memphis attracting significantly fewer jobs.

During past council meetings, Smiley, Ford, councilwoman Cheyenne Johnson and councilman Jeff Warren — who all voted against Jones’ proposal — had expressed some support for raising the qualifying wage from $13 but not necessarily as high as $21, given the Chamber and EDGE arguments that $21 would make Memphis uncompetitive in its effort to attract jobs. 

Memphis City Councilman Martavius Jones (top left) argued passionately against incentivizing jobs that pay less than $21 per hour, while a woman translated it into sign language for the viewing public. Ultimately, points made by Greater Memphis Chamber chief economic development officer Ted Townsend (bottom left) and chamber president Beverly Robertson (bottom right) were more convincing to Jones’ colleagues. Screenshot by Jacob Steimer for MLK50

Jones said he would have been content with an increase to $17 per hour — which may have been more palatable to his colleagues — had the McDonald’s locations in Memphis not posted banners in recent months advertising starting salaries as high as $17 for managers. If that’s the wage fast-food establishments are now paying, he said, then it shouldn’t be a wage incentivized by tax breaks. He also said his $21 wage is needed, based on the Living Wage Calculator showing that about $21 per hour is necessary to cover the expenses of two Memphis adults, if just one is working. According to the calculator, $18 per hour is required for a family of four where both parents work and $26 is required for a single parent of one. 

Many of Memphis’ tax breaks are given to companies bringing warehouse jobs to the city. In interviews after Tuesday’s vote, local warehouse workers said they agreed with Jones that $13 per hour wages shouldn’t be encouraged, as they aren’t enough to live on.

Reggie Williams, who works at the Yazaki warehouse on Holmes Road, said that back when he made $13 and his wife was pregnant, he was constantly having discussions with her about when exactly certain bills were due and whether or not he could work overtime to pay them.  

“The lights got turned off a couple times. It was rough,” Williams said. 

Now making closer to $21, Williams said he never stresses when he receives a bill and he’s even able to take his wife on vacations.

Dietrik Looney said he started out at Yazaki, which hasn’t received a tax break according to EDGE’s archive, 10 years ago making $9 per hour and slowly worked his way up to supervisor, where he now makes more than $70,000 per year. In those early years, he said it was “extremely difficult” to make ends meet for his family of four, even with his wife working and the pair renting a cheap apartment in West Memphis.

Looney said he still remembers what it felt like seeing eviction notices on his door.

“Being the man of the house, I had to keep a roof over our head,” Looney said. 

Michael London, who works at a local Amazon facility that received a tax break in 2017, said it would make a huge difference for him and his household if he made $21 per hour instead of $15.50.

“The American dream would be to live in a big house. … I don’t need all that. But, I would like to at least be able to pay my bills and have more (left over),” he said.

Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at Jacob.Steimer@mlk50.com


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