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Business community focused on raising skills that responsibly raise wages

CLEVELAND—The Greater Cleveland Partnership (GCP) Board of Directors recently voted to endorse a four-year renewal of the 15-mill operating levy that supports the Cleveland Metropolitan School District (CMSD) – with 1 mill set aside for partnering with high-quality charter schools. The GCP anticipates CMSD will pursue this form of a renewal, which is not a tax increase, on the November 2016 ballot.

The GCP has been an active supporter, partner and advocate in the efforts of city leaders to improve the quality of public K-12 education within the city of Cleveland, through execution of “The Cleveland Plan.” Through the endorsement vote, GCP and its members continue the deep engagement between the business community and the most populous school district in the region.

The Cleveland Plan is increasing the number of high performing schools, increasing accountability, and improving college and career readiness. CMSD’s graduation rate is improving while the college remediation rate declines. Students are achieving more. Reading and math scores are up and CMSD enrollment is growing.

“The Cleveland Plan is working,” said GCP President and CEO Joe Roman. “These successes warrant our community’s continued support to ensure the Cleveland students of today are ready for the jobs of tomorrow.

“The business community has long recognized that key to our economic future is to develop the skilled workforce that can help us grow the companies that are here and create an environment to start new companies.”

The GCP believes that this continued support for and engagement in CMSD will lead students to better careers with higher wages – a perspective that has led the GCP to also take a stand on the Cleveland minimum wage issue.

Board vote reflects concerns about minimum wage increase timeline

The GCP Board also voted to strongly oppose the almost overnight 85 percent increase in Cleveland’s minimum wage. The Board does not have a philosophical objection to minimum wage increases but has overall concerns with the comparative size of Cleveland’s increase, the speedy timeline for implementation and the focus on the city of Cleveland versus the state of Ohio as a whole.

This change will lead to the loss of businesses and send a strong signal to investors and employers who are considering expansions in our town. The combined impact could destroy the momentum the city is experiencing.

“The most aggressive minimum wage increase in the country is certain to have a devastating impact on our ability to create jobs in Cleveland,” said Roman. “Enhancing skills is the right way to raise wages and that is why our commitment to continue to support the Cleveland Plan and its operating levy is at the top of our list.”

If enacted, Cleveland would have the highest generally applied minimum wage in the country on January 1, 2017.

“This is a misguided proposal which bears no understanding of how markets actually work and how employers make competitive location decisions, and the only outcome is fewer jobs in the city and more jobs in locations that are farther away from city residents.”

This is the first time, to GCP’s knowledge, that a local minimum wage effort is proposing an extreme increase – 85 percent - over such a short period of time. And starting in January 2018, that minimum would be adjusted for inflation. The GCP believes the wage hike is wrong-headed on several counts:
  • Minimum wage hike legislation in other cities has called for a phased-in approach over several years, some with increases differently based on the size of a business and where it is located. The proponents call for Cleveland’s change to take effect January 1, 2017, only seven months from now.
  • Most of the cities involved in targeted increases - including Portland, Seattle and Los Angeles - have significantly higher costs of living than Cleveland. Multiple cost-of-living calculators show living in Seattle or Los Angeles typically costs nearly 28 percent more, and in Portland, almost 22 percent more than in Cleveland. It doesn’t make sense, then, to call for the same hourly rate in Cleveland as in those cities.
  • Because this is a Cleveland-only proposal, the GCP worries about its impact on the business competitiveness of the city. It is concerned the increase would drive business to neighboring cities and force those who remain to make do with fewer workers.
The GCP will work with city leaders, civic organizations and other stakeholders to build a coalition to oppose this minimum wage increase.

“The business community believes in education and skill development as the sustainable and life long way to build wages in a community and that is why our support for the Cleveland plan remains steadfast and unwavering,” said Roman.

“The $15 minimum wage hike respects no true market conditions and will force many organizations to reconsider their employment footprint in Cleveland.”

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The Greater Cleveland Partnership mobilizes private-sector leadership, expertise and resources to create attractive business conditions that create jobs, grow investment and improve the economic prosperity of the region. www.gcpartnership.com.