By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
Another company, Renovations by My Home Inc., collected $61,200 from SBS, although it only refurbishes apartments worth more than half a million dollars, specializes in $40,000 bathrooms, and was recently listed among the country's 500 fastest-growing companies. Net-A-Porter, the online fashion company that sells $4,000 Bottega Veneta handbags, $500 Dolce & Gabbana sunglasses, $860 Jade Jagger booty shorts, and once filled a $40,000 dress order, received $78,750 from SBS. (The SBS approval form noted that Net-A-Porter had achieved "100 percent revenue growth over the last year.") Similarly, Ricoh—a $10 billion company providing major automated equipment and electronics—was granted $100,837 to upgrade staff skills before a new multimillion-dollar Oracle software system was installed. (Margalit, who oversees the SBS Business Solutions unit, came to the agency from Oracle.) The Fitch Group, which operates a state-of-the-art reproduction facility for top law firms, collected $21,440. The Pierre Hotel and Les Halles, the French restaurant on Park Avenue, were approved for grants of $11,000 and $55,000, respectively, but decided not to go forward with their projects.
Mana Products, a Queens cosmetics company that manufactures Erno Laszlo mascara and sells a variety of "prestige beauty products" to Saks and Neiman Marcus, got $164,790. Though the Times reported in 1999 that 65 percent of the company's largely Latin and female workforce had signed union cards, Teamster 804 business manager Frank Laquidara tells the Voice that "the owners and management intimidated the hell out of the people that worked there" and blocked unionization. Mana's application projected profitability gains of up to 15 percent due to the training.
Online grocery store FreshDirect, which was awarded a $253,125 grant, last year earned the ire of Comptroller Bill Thompson and Congresswoman Nydia Velázquez, who accused the company of anti-union tactics that created "an environment of fear." FreshDirect notified employees about a federal audit of immigration documents just as they were about to vote on unionization, causing a hundred employees to flee. SBS said it had approved the grant in part because it would "increase profit margins."
Research Assistants: Samuel Breidbart, Sarah Lavery, Shaunna Murphy, Shea O'Rourke, and John Wilwol
Walsh boasted about this "proactive approach to training" in his recent budget presentation at the City Council, claiming that it helped employers to "grow and remain competitive." In fact, there's no requirement that the companies receiving these grants "grow" or hire new workers; there's not even a requirement that they "project wage gains" for more than "half of all trainees." Employers who do promise new hires and promotions, according to SBS records, are reluctant to commit to them even "within a six-month to one-year time frame."
When the program started in 2005, employers had to split the cost of training with the city—but when employers complained about that 50 percent contribution last summer, the agency lowered it to as little as 30 percent. SBS insists that it verifies that employers actually pay their share and deliver whatever salary increases have been promised, but the agency refused to disclose the details to the Voice. Some recipients, like Der-Dau, do their training in-house rather than retain an outside contractor, making it very difficult to calculate the employer's actual contribution. Incredibly, Bloomberg is using city funds he set aside for anti-poverty projects to cover part of the cost of this program.
Another unusual program puts SBS in the role of an employment agency, pre-screening job applicants for new positions that major employers—including JetBlue, Banana Republic, FreshDirect, Whole Foods, Applebee's, and others—are planning to fill. When SBS placed 80 of IHOP's 111 new hires for a downtown Brooklyn pancake house, Walsh boasted in a memo to Bloomberg that the agency had "saved the company time and money," which apparently has become a governmental purpose in Mike Bloomberg's New York. According to Walsh, SBS was also responsible for 350 placements ("the largest-scale recruitment effort ever," as Walsh described it in a 2007 memo to the mayor) at the Whole Foods on the Lower East Side—but only eight of 36 workers at the store randomly interviewed by Voice said they went to SBS centers.
In other words, Walsh is financing career centers all over the city whose primary function is to funnel one person instead of another into a job that an employer is already offering, simply because the first person came to SBS and the second one didn't. Walsh says that his streamlined applicant pool has "made it easier for companies to do business in New York." It has also made it easier for Walsh and Bloomberg to boast that they've placed 50,000 New Yorkers in jobs—a success ratio that SBS loves to compare with the paltry placement numbers the city achieved when it actually tried to train the difficult-to-employ and match them with jobs.
David Fischer of the Center for an Urban Future critiqued this approach at a council hearing this year, calling it a "creaming model" that takes "the people who are most job-ready" and connects them to employers with a "Help Wanted" sign on the door. Julie Shapiro, the senior vice president for a contractor that runs an SBS Workforce Center, testified that "we are serving people who would end up finding jobs on their own." Fischer blames much of this on the federal workforce-funding formula's "crooked game," which demands numbers. And Walsh told the Voice that he agrees: "Fischer is right. You have me thinking about this cherry-picking conversation. Fischer is right that for the longest time, we've ended up chasing numbers. We did it."