Wage bill may mean pricier shops: Push by Mayor Bill de Blasio, City Council could scare off discounters

Crain's New York Business reports:

New York City has always had its share of pricey boutiques and upscale shops. And if a proposed expansion of the city's living-wage law moves forward, it might see even more—hardly the result its proponents intended.

In his State of the City address last week, Mayor Bill de Blasio pledged to extend the existing law, which currently excludes tenants of city-subsidized development projects, to cover "tens of thousands of additional New Yorkers." The law, enacted in 2012, forces developers receiving substantial city subsidies for projects to pay its workers at those sites at least $10 an hour plus benefits, or $11.50 without benefits. But commercial tenants—notably retailers—are exempt, a major carve-out that now faces elimination.

Experts say that would make projects harder, if not impossible, to put together, as stores would avoid leasing space where the additional labor costs are required. Developers would have to turn to retailers that already offer higher wages: luxury shops and high-end mass-market retailers, rather than the discounters that sell the items that ordinary New Yorkers can afford.

Just a reminder: the demand for labor is a downward sloping curve.