Living Wage Wrap-up

By Jorge Casuso

Tall and bearded and slightly disheveled, Robert Pollin looked every bit the liberal New England scholar on March 2, as he conducted a "scoping session" that promised to be the first class in a national experiment. A leading expert - and advocate - of the living wage, Pollin had been hired by the city of Santa Monica to conduct a study of an unprecedented proposal.

Sitting in the back of the packed room in Santa Monica that night, sporting a sharp suit and stylish goatee, was San Francisco consultant Mark Mosher. Mosher - who along with the partners in his new firm helped elect Willie Brown -- was in town to make sure the experiment wasn't carried out.

Over the next several weeks, the two strangers from opposite coasts would become the flash points of a local political war to make Santa Monica the nation's first city to require private businesses with no municipal subsidies or contracts to pay workers a living wage. Santa Monica's proposed law - crafted by the unions and Santa Monicans Allied for Responsible Tourism (SMART) -- would require businesses along the coast with more than 50 employees to pay their workers at least $10.69-an-hour, which is double the minimum wage.

A major offensive against the proposal was launched last week, when a group of hotel and restaurant owners filed a ballot initiative crafted by Mosher that would effectively erase any living wage measure the City Council approves.

"This is something that is born out of frustration with the public process," said attorney Tom Larmore, who heads the Chamber of Commerce's Living Wage Task Force. "It (the living wage) is too important a measure to leave to a council that has acted in an unreasonable way. Any measure which would potentially drive local businesses out of town and significantly raise prices should be decided by the voters, not the City Council."

Proponents of the living wage proposal the council is considering were quick to blast the initiative, calling it "deceitful and undemocratic."

"This initiative is a theft of democracy, which insults our community by bypassing our civic process," said Councilman Michael Feinstein. "What is happening here is that a small group is trying to buy itself onto the ballot."

"They've decided they are going to disempower the City Council," said Vivian Rothstein, an organizer for SMART. "It's big business trying to manipulate a social movement. The people who have the money are able to sway the voters. I think they're trying to buy an election."

Following the pattern of 32 other local living wage laws across the nation, the proposed charter amendment applies only to businesses that have contracts or receive direct subsidies from the city. The measure would "repeal existing and simultaneously adopted charter provisions, ordinances, rules and regulations," according to the wording of the initiative, which must be signed by 9,000 registered voters by May 15 to get on the November ballot.

The proposed charter amendment - which can only be changed or overridden at the ballot box - closely mirrors Los Angeles County's living wage law. The county law requires employers who receive at least $25,000 in City contracts for services to pay their workers a living wage of at least $8.32 an hour with health benefits, or $9.46 without. Like the county law, Santa Monica's initiative would compensate for inflation by tying it to the Consumer Price Index for the Los Angeles Area. It also would exempt non-profits.

The initiative - sponsored by a group of business owners calling itself Santa Monicans for a Living Wage - places original proponents in the awkward position of opposing a measure they have championed.

"I would hope they would support it," Larmore said. "The living wage part is consistent with things they have written and the concepts were theirs."

Proponents of SMART's proposal called the ballot measure a "Trojan Horse" and compared it to the tobacco industry's anti-smoking initiatives. The city, they note, already is preparing a living wage ordinance for city contractors.

"This cynical Trojan Horse gives public workers nothing new and steals hope from private workers," said Councilman Kevin McKeown. "In attempting to hoodwink the voters, shortcircuit our study and replace public process with well-financed deception, the proposed initiative isn't a living wage, it's a lying wage."

"It's one thing to oppose something honestly, and it's another to take something someone believes in and has dedicated their life to and co-opt it," said Madeline Janice Aparicio, who heads the Los Angeles Living Wage Coalition. "I'm outraged by that."

Opponents of the proposed charter amendment said it fails to cover the low-wage workers in the city's hotels and restaurants targeted by SMART's proposal. By not covering businesses that lease from the city, the measure spares the Pacific Shore Hotel near the beach, several restaurants on the pier and Pacific Park, the pier's fun zone.

"This is a sham living wage ordinance put forward by the big hotels and anti-living wage lobbyists to exempt themselves and to cover as few workers as possible," said Stephanie Monroe, a leader of SMART. "The scope of this sham living wage ordinance is so narrow, the holes so gaping and the exemptions so numerous, we're not sure it would cover one red-blooded worker."

The initiative was filed two weeks after Pollin filled the public hall with little need for fanfare. Pollin's appearance had been eagerly awaited since the City Council voted in late January to hire the living wage advocate to study the issue for the city.

The professor can't be objective, critics charged before the 6 to 1 vote to hire Pollin was cast. After all, they protested, it was Pollin who penned the definitive book on the benefits of the living wage. And it was the University of Massachusetts, Amherst economist who out of more than 50 experts, submitted the only bid for the job. His team of researchers would conduct a four-month study for $50,000.

"The (City) Council has put a lot of trust in myself and our team of researchers," said Pollin. "I'm on the record that I'm very supportive of the goals of raising living standards. The city of Santa Monica also said they are supportive of the goals of the living wage movement.

"Moving from general principle to specific policy is the trick," Pollin said. "There are pitfalls. The people you are trying to help could actually turn out worse off. We want to make sure we don't hurt the people we want to help."

It would not be an easy study to conduct. Hotels and restaurants - where tips are often as important as wages - were key among the businesses targeted by the proposal. The study would have to grapple with a myriad of questions seldom, if ever, raised by the living wage ordinances approved by other municipalities: How will the law's fallout affect businesses not covered by the proposal? Should the law cover part-time workers? How do you calculate earnings in the restaurants and hotels, where workers often earn much of their money in tips?

These were among the questions asked by skeptical business owners, who said the proposed law would drive them out of business or deter them from opening their doors in Santa Monica.

"Eighty percent of our staff are minimum wage, tipped employees," said Tony Palermo, one of the owners of Teasers restaurant on the Third Street Promenade. "They'll get a 100 percent raise. My payroll will double. How can we logically stay in business?"

As with most of the questions and observations, Pollin listened and replied, "The answer is, 'I don't know.' The points you are raising are exactly the points we need to study."

Hopeful workers also asked questions the study will try to answer.

"It's time enough that we make a decent wage," said Brian Samuel, who works at a retirement hotel. "How do you deal with those of us who are afraid of our bosses?"

"What will happen to those who come to this country looking for a better life, a better future, who can't live on a minimum wage?" asked John Hernandez, who works at upscale Jonathan Club on the beach.

While Pollin declined to make predictions - 'What we do is something beyond the intuitively obvious," he said - business owners had a ready answer.

"We're going to be going for more educated people who can speak English, do more things," said Jack Srebnick, president of the California Restaurant Association's Westside Chapter and owner of the 17th Street Cafe. "The people we are trying to help will be hurt."

Rebel Harrison, who runs the Regional Occupational Program for the school district, worried that the proposal could eliminate jobs for students.

"My heart and soul says, on the surface, 'Yes, yes yes,'" Harrison said. "My head says, 'Slow down and look at the impact on youth and low-skilled workers who live in our community. Be careful what you wish for, for we may be pushing out employees, and it will be our people who will be pushed out."

Supporters of the living wage tried to allay fears that jobs will be lost and businesses forced to shut down. They noted that the proposal could include a hardship clause for businesses that would be especially hard hit.

"There's a fear factor," said former Rent Control Board president Jay Johnson, a member of SMART. "While at first glance it's shocking, the point here is not to put anyone out of business."

Pollin addressed worries that the study would reflect his support of the concept, saying he welcomed the scrutiny of "distinguished economists.

"There are a lot of first-rate economists who have different points of view," Pollin said. "That's another check that I've strongly advocated."

But whatever the results of the study, any actions the council takes may be mute if the ballot measure passes. In the end, the ultimate political battle will likely be waged at the ballot box, where the council also can take its case without petition signatures.