10 February 00

Alexander Speaks

Against Living-Wage

Pat Alexander, President of Security Nation Bank spoke to the Manhattan City Commission against the Living
Wage Ordinance at Tuesday's Work Session. Here are his remarks:

Advocates of the ordinance being discussed today are implying that lower than average wages which exist in
Riley County today are the result of private business making excess profits at the expense of employees and that
there is not enough governmental influence being exerted to pay a ‘fair wage’.

I would advocate that the reason overall wages in Riley County are lower than surrounding counties is due to the
lack of robust economic growth and undue governmental influence on the community wage structure.

Today, even after the last three years of success we have experienced in attracting new jobs and businesses to
our community, there are still only 60 percent of the community’s jobs being provided by the private sector. This
compares to 72% in Lawrence and 78% in Topeka.

This community made a decision five years ago to actively compete in the market place to attract private sector
jobs. The economic development sales tax was not passed to provide a windfall bonanza to private business. The
tax was passed to allow the Manhattan community to overcome geographic and transportation disadvantages and
attract private sector jobs. This plan is working.

The local unemployment rate in November was 3 percent at the county level and 2.7% in Manhattan. In the last
couple of years we have seen a scarcity of qualified workers and entry-level wages have escalated between$1
and $2 per hour. The laws of supply and demand are still intact and working well.

The original objectives of the community, quality jobs and economic opportunity are being met. Not only is this
proposed ordinance contrary to the workings of the free market which has served us well, it is bad policy and will
work contrary to the goals and objectives of creating economic opportunity for our citizens.

This ordinance is hostile to business and will reduce jobs in our community. The definition of CEDAR includes
any business that enters into a service contract with a CEDAR and employs 10 or more employees. Under this
definition, any firm or organization that provides telephone service, electric services, water services, banking
services, legal services, security services, etc. is also a CEDAR.

I find it offensive and intrusive to think the proponents of this legislation feel it is appropriate that the city dictate
the wage levels that businesses pay their employees and have the right to require businesses to produce all their
payroll records for inspection and copying. Do we really think that we will dictate wage structures to
Southwestern Bell, Western Resources, or any other business that operate in other communities and provides
services to a Manhattan CEDAR?

Will the city only enforce this law against local businesses that only do business in Manhattan and do not have
the luxury of doing business in other communities? If you were a business owner would you locate your business
here if this legislation were enacted? I would like to reiterate, it is bad policy and an even worse law.