Living Wage 101: Prof. Pollin Holds Class

By Jorge Casuso

Professor Robert Pollin is used to leading the class, but on Thursday night in Santa Monica, the students did most of the schooling.

Hired by the city to conduct a study of an unprecedented living wage proposal, the Massachusetts economist got an earful from dozens of business owners who fear the proposed law will force them to shut down and low-wage workers who hope it will help them make ends meet.

As city officials had hoped, the overflow crowd at the Ken Edwards Center helped frame the issues to be addressed by the $55,000 study, which will weigh the costs and benefits of a groundbreaking experiment. The proposed law would make Santa Monica the nation's first city to mandate that private businesses with no direct city contracts or subsidies pay their employees the living wage, in this case $10.69-an-hour.

"The (City) Council has put a lot of trust in myself and our team of researchers," said Pollin, an Amherst University professor who literally wrote the book on the benefits of the living wage. "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."

Pollin said his study of the proposal - which covers businesses in the Coastal Zone with more than 50 employees -- will be a "serious piece of research... that meets the highest (academic) standards."

But if the questions and observations from the audience are any indication, the study - which Pollin expects to submit in draft form by June 26 - will grapple with a myriad of questions seldom, if ever, raised by the living wage ordinances approved by 40 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 leading proponent of the proposal. "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 at least one member of the audience - 41st Assembly District candidate S. David Freeman - questioned relying entirely on economists to conduct the study.

"I haven't ever known (economics professors) for having feelings," Freeman said. "There's some real life and death issues. A business going out of business is heart-breaking, a worker who can't put bread on the table. I'm appalled that a city like Santa Monica, known for its feelings, would have a study only done by economists."

Freeman lauded the crowd for its involvement.

"I came to listen and learn, and it's enlightening," said Freeman, who heads the Los Angeles Department of Water and Power. "This is a beautiful exercise in democracy. People are coming out here and saying what they feel."

"I should have brought my ribbon cutting scissors," said Chamber of Commerce vice president Dan Ehrler. "I feel this is better than a grand opening. It's a grand opening to a very unique experience."