What I Say

Freedom and Dignity

by Frank Gruber

"Caught in the labyrinth of modern industrialism and dwarfed by the size of corporate enterprise, [the employee] can attain freedom and dignity only by cooperation with others of his group."

-- From remarks of Senator Robert Wagner on the floor of the Senate in support of the 1935 National Labor Relations Act (also known as the "Wagner Act"), as quoted in C. Morris, The Developing Labor Law (1971).

The plight of the working poor is the most dire crisis affecting our region.

As pointed out by the Southern California Studies Center at USC in "Sprawl Hits the Wall: Confronting the Realities of Metropolitan Los Angeles," the Center's recent report on the state of the region, the numbers of working poor are rising faster than both the population as a whole and the numbers of non-working poor:

"Between 1990 and 1998, the number of people living in working poor households ... grew from 1.6 million to 2.5 million, a 51 percent increase. During this period, the population grew 16 percent and the number of people living in non-working poor households grew by 24 percent."

The difficulties low-wage workers face worsened during the recent boom. There are more jobs, but wages at the low end increased only slightly, while the costs of many essentials, most notably housing, increased dramatically.

Santa Monica is, at the moment, grappling with this issue in its own way. Labor and political activists have proposed that the city adopt its own minimum wage for at least some businesses (those of at least a certain size), in one portion of the city (the "Coastal Zone"). This "living wage" would about double the national and state minimums.

In 1999 City Council expressed general support for a living wage ordinance and commissioned an economic study of what effects it might have. Business interests commissioned their own study, and the city also hired two economists to review its study.

The economists did not agree on much.

Businesses, principally the big hotels near the beach, then spent more than a million dollars on Prop. KK, a politically suicidal attempt to abort the living wage. Presumably the hotels are prepared to spend equivalent amounts to challenge in court any ordinance City Council passes.

Next Tuesday staff will ask City Council for more direction, not on an ordinance to draft, but on what further research and public process Council believes necessary before it can stop cutting bait.

I am not surprised staff believes further study is required. The issue is complex. Drafting an ordinance will be even more complex, as there are many variables -- economic, geographic, demographic, legal -- to consider.

At this moment, I am as confused as anyone else. I have read the reports. I know a little about the law. I generally respect expertise, but in this case I believe neither that economists can predict what will happen nor that lawyers can predict what will survive judicial scrutiny.

Consequently, I have no views at the moment on any specific ordinance.

But I believe more than anything that this dispute is about unions. Specifically, it is about management's aversion to unions, and is caused by, more than anything else, the disintegration, in the face of constant attack from the right-wing, of the American system of industrial relations.

This system, which since the passage of the Wagner Act in 1935 has played a crucial role in America's amazing prosperity and our political liberty, is based on the fundamental principle that workers themselves have the right to decide whether to organize.

The genius of the Wagner Act was that, while the rest of the industrialized world resorted to top down bureaucracies (whether fascist, socialist, or communist, whether democratic or totalitarian) to deal with the social dislocations of industrialization, America chose a pluralistic and democratic model that relied on labor and capital resolving their differences over the bargaining table. Concurrently, under the vision of Senator Wagner, unions and management would solve other problems created by modernization, such as the delivery of medical care and the financial needs of retirees.

The key is worker choice. Many workers may not want to join unions, and unions have lost many certification elections, but if workers do not have choice free from employer interference, there is no brake on the employer's power over workers.

Ever since Ronald Reagan packed the National Labor Relations Board with anti-union zealots, this principle of worker self-determination has been under attack. It has become harder and harder for unions to organize workers.

When unions cannot protect the interests of working people, our social system is in danger. Union contracts not only benefit union workers, but also set the standard for everyone else.

On the micro level, workers at our non-union hotels can thank union activists for their recent raises. On the macro level, every white collar worker with medical benefits or a retirement plan can thank organized labor for establishing health insurance and pensions as routine perquisites of employment. Beyond even that, higher union wages turned workers into consumers, to the benefit of shareholders, and, of course, labor unions have been key players in social legislation running the gamut from child labor laws to Medicare.

The hotels that have fought the proposed living wage ordinance have themselves to blame for it.

The labor scene was quiet in Santa Monica until the owners of what was the Miramar Sheraton sought to decertify the union there.

This action awakened two sleeping giants, the community's social conscience and the union itself, Local 814 of the Hotel Employees and Restaurant Employees Union. The social conscience manifested itself in the organization of "Santa Monicans Allied for Responsible Tourism" (SMART), and the union brought new, activist leadership to Local 814.

The rest of the local business community, including the other, non-unionized hotels, might have dissociated themselves from the antics of Miramar management by pledging not to interfere with the rights of their workers to organize. They could have pledged, for instance, not to hire outside union-busters.

Maybe I am a Pollyanna, but what would this have cost the hotels? After all, they would merely be pledging to abide by the law, its spirit as well as its letter, and if, as the hotels claim, their employees do not want to join unions, what did they have to fear?

The hotels, SMART, and Local 814 probably all disagree, but I think such a pledge would have obviated the need for, or forestalled politically, the living wage ordinance.

We will never know. The hotels chose to battle Local 814 at every turn. Loew's Hotel, the focus of Local 814's organizing efforts, hired the same union-busting firm that worked for the Miramar.

As precedents established at the NLRB during the Reagan and Bush years increased the difficulty of organizing unions have turned to political action -- in this case, the living wage ordinance.

From the start SMART and Local 814 designed their proposed ordinance to put pressure on the non-union hotels, specifically the big profitable hotels along the beach, because these are the businesses the union wants to organize. The original proposal for a living wage excluded small businesses, such as most restaurants, covered only the Coastal Zone, and, most crucially, allowed union contracts to supersede the ordinance.

Businesses complain that Local 814 and its allies are using the living wage ordinance to pressure them to sign union contracts. But for years corporations have used politics to subvert the rights of workers and unions. Turnabout is fair play.

The views expressed in this column are those of Frank Gruber
and do not necessarily reflect the opinions of The Lookout.