By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
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By Dennis Romero
By Jill Stewart
By Dennis Romero
|Photo by Slobodan Dimitrov|
On a cool night in early June, before a standing-room crowd of more than 300 cheering supporters, a group of Santa Monica restaurant and hotel workers and their backers unveiled an unprecedented proposal.
In the name of fairness, the union workers said, Santa Monica should become the first municipality in the nation to impose a "living wage" requirement on businesses that received neither direct subsidies nor contracts from the city. The proposal, which would directly affect some 3,000 workers, would force an estimated 35 businesses along the coast with more than 50 employees to pay at least $10.69 an hour, a hike that would nearly double the minimum wage overnight.
The affected employers would include national restaurants and retailers who reaped the benefits of a city-funded tourism boom, although the main target is luxury hotels, some of which pay their housekeepers the $5.75-an-hour minimum wage to clean $400-a-night rooms.
Since the June 5 kickoff rally at the Church in Ocean Park, Santa Monica’s living-wage proposal has sparked a political and ideological war that recalls the early days of rent control, two decades ago. The setting, in both cases, was the stained-glass confines of the old brick church, a liberal bastion fit for what proponents view as a moral war. "The essential argument is a moral one — the right to lead a decent life," local union leader Kurt Peterson told the crowd. "It’s not just the wage, but the right to fight for that wage."
It didn’t take long for business leaders to react. This, they argued, was a truly radical proposal that could force some businesses to shut down or move out of town.
Since Baltimore imposed a $6.10 living wage on its contractors in 1994, more than two dozen other cities — including New York, Los Angeles, Boston, Minneapolis and Portland, Oregon, as well as L.A. County — have passed living-wage ordinances, but they only applied to businesses that received direct city subsidies or contracts. No city had ever told a company what they had to pay workers in the everyday course of their private business. That was unheard-of.
Besides, the proposal would impose the living wage only on businesses within the Coastal Zone. While the zone — which runs from the ocean to Fourth Street north of Pico Boulevard and to Lincoln Boulevard south of Pico — includes most of the city’s highly profitable tourist-related businesses, opponents argue that it unfairly singles out businesses that happened to fall within its boundaries.
"This thing is discriminat[ory] as hell," snapped Herb Katz, who chairs the board of the Bayside District Corp., which manages the downtown area, much of which falls within the Coastal Zone. "You can ruin a lot of businesses by doing it."
"This is a very, very serious and very complex issue," Kathleen Rawson, the Bayside District Corp.’s executive director, said recently. "There is a potential for a domino effect that can be devastating for Santa Monica businesses."
For the business community the ordinance is no veiled threat. The proposal was crafted by the hotel and restaurant workers union local and by Santa Monicans Allied for Responsible Tourism (SMART), two groups with close ties to members of the City Council. In fact, leaders of Santa Monicans for Renters’ Rights — which controls five of the seven council seats — had attended meetings to help hammer out the terms of the proposal. What’s more, some leaders of the powerful grassroots tenants group belonged to SMART, and the union was credited with helping the group win a super majority on the City Council, canvassing precincts and staffing phone banks during the last three council races.
"If a vote were held today," predicted Tom Larmore, a politically savvy attorney picked by the Santa Monica Chamber of Commerce to head a special subcommittee on the living-wage proposal, "it would win six to one."
The Santa Monica City Council first considered the issue at its meeting Tuesday — and drew hundreds of advocates pro and con — when it was expected to do nothing more than green-light a study of the proposal. But already the plan is drawing attention far from the city’s boundaries.
"This is groundbreaking on many levels," said John Doyle, director of public affairs for the Employment Policies Institute in Washington, D.C. "Here you’ve got people competing in the open market not just with each other, but with those in the surrounding area. You’re going to see a tremendous fallout if this passes."
Doyle has been critical of other living-wage ordinances, and he was skeptical of this one: "It will be an amazing experiment. It may be a costly experiment. I think they’ve overreached this time."
But some experts took a more positive view of the plan. Economists who have studied the history of the minimum or living wage in this country note that such dire predictions have seldom panned out. "There is no reason why a municipal living-wage ordinance should be seen as seriously burdensome for cities," said Robert Pollin, professor of economics at the University of Massachusetts, Amherst, and co-chair of the Political Economy Research Institute there. Pollin co-authored the landmark study "The Living Wage: Building a Fair Economy," which found little evidence to support the notion that increasing bottom-end wages forces employers to cut back on staffing. Pollin concedes, however, that Santa Monica’s proposal is "probably a new idea."