Boston’s Mayor Thomas M. Menino is poised to extend the recycling contract of a company that refuses to abide by a city law requiring it to pay employees a ''living wage,'' according to city officials.
The decision, which could come as early as today, would be the first significant departure from Boston's landmark 1998 living wage law - one of the administration's hallmark efforts to help the working poor.
Menino has labored for months over whether to withdraw the city's contract with the recycling company KTI of New England because of the company's failure to abide by the law, which requires city contractors to pay employees at least $10.54 per hour. Since no other company was willing to take over the contract with the living wage provision, the city would have had to commit an extra $1 million a year to cover the higher labor costs.
City Hall officials say the economic crisis, as the city mulls layoffs and other budget reductions, has pushed Menino into a corner, leaving him little choice but to grant a waiver to the recycling firm, allowing it to pay workers as little as the federal hourly minimum, which is $6.75.
Organized labor and other advocates of the law, who have organized a protest to be held outside KTI's Charlestown plant today, said a waiver would open the door for other contractors to negotiate their way out of one of the city's bedrock programs designed to boost the income of hundreds of working poor. About 300 city contracts are governed by the living wage.
It is the most significant challenge to the living wage law since its adoption and for months has locked the city in a standoff against three recycling firms, including finalist KTI, that steadfastly insisted that they couldn't afford the higher wages.
Besides the financial burden of taking over the recycling duties, the city is confronted with the fact that KTI is one of the few firms with the capacity to process Boston's waste. That fact, city officials have said privately, gave KTI the leverage to hold its position.
''In this [economic] climate, it makes sense to continue recycling,'' said Sam Tyler, of the watchdog Boston Municipal Research Bureau. ''It would have cost the city $3.2 million over the last 21/2 years to treat it like any other refuse that the city collects and disposes of. So it is a benefit to the city and it's a program that is paying for itself.''
The City Council, anticipating that Menino would soon capitulate, yesterday unanimously implored the administration to enforce the law, though the decision rests with Menino.
''They have no intention of paying $10.54 per hour,'' Councilor at Large Stephen J. Murphy said of KTI. ''The rising tide should lift all boats. They're working under horrendous conditions. We shouldn't be passing waivers.''
For months, while the city held two hearings and deliberated, KTI has continued the city's recycling on an extension of its old contract. Living wage advocates have contended that KTI has consistently failed to support its hardship claim with financial documentation, compared with evidence presented by four small child-care providers that earned waivers.
KTI is a subsidiary of Casella Waste Systems Inc., the 32d-largest waste management group in the United States. The city also took bids from subsidiaries of Waste Management Inc. and Allied Waste Industries Inc., two of the biggest solid waste disposal operations in the nation, with annual sales in the billions.
''I think that KTI is holding the city of Boston and the workers at KTI hostage,'' said Kathleen Casavanti, of the Massachusetts AFL-CIO. ''KTI can well afford to grant a living wage to these workers. But the city has been stalling on the decision. We don't understand why they're stalling.''
Most of the 85 KTI employees, who haul and sort mounds of glass, paper, and plastic, are immigrants working two and three jobs to support families, according to their advocates.
KTI officials did not return calls yesterday seeking comment.
Mimi Turchinetz, the city's living wage administrator, said KTI furnished financial records during the first hearing last year but declined to supply additional information at the second hearing in January. ''There is documentation on the record,'' she said. ''Obviously, there are a lot of issues here and the city wants to resolve them the best it can.''
KTI's refusal to raise workers' pay follows similar challenges to living wage laws by recycling firms in Cambridge and Somerville, where the cities exempted the companies. Menino has said his decision would take those challenges into account.
Workforce analysts have said the recycling companies have mounted the challenges to avoid paying the living wage in other cities where they operate.
Nationally, living wage ordinances have become a tool for muncipalities to address the concerns of unions and advocates of the working poor. In the past decade, about 80 local governments and colleges have adopted variations of the policy, while opponents warning of potential job losses have persuaded half a dozen states to ban the laws. Boston Globe