Photo by David H. Wells/Corbis
One week after 30 dishwashers and housekeepers of the exclusive Jonathan Club on Santa Monica Beach lost their jobs, the city’s living-wage war literally went postal.
While the low-wage workers — who are among the most vocal backers of a groundbreaking living-wage proposal being studied by the City Council — found themselves suddenly looking for work, businesses were pushing their own initiative in a flier that hit the mailboxes of 28,000 registered voters this week.
Put out by a newly formed group calling itself Santa Monicans for a Living Wage, the brochure touts a ballot initiative that would cover employers with municipal contracts or subsidies. If approved by voters in November, it would effectively override the living-wage law being studied by the city, which targets hotels and restaurants in Santa Monica’s thriving coastal zone, few, if any, of which would be covered by the initiative.
“Nearly three dozen U.S. cities have living-wage laws that protect local workers who do city work. Shouldn’t Santa Monica be one of them?” the mailer reads. “Despite their good intentions, City Council members are debating a minimum-wage ordinance that will not work.”
On the surface, the business-backed measure, which must be signed by 9,000 registered voters by May 15 to qualify for the November ballot, might seem to be a good one. But workers say it’s too weak and would exempt most businesses in Santa Monica. The initiative closely mirrors Los Angeles County’s law — which requires only 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 benefits. Some three dozen municipalities nationwide have adopted similar laws, including San Fernando, which passed one last week.
Another rub is that the measure can be changed or overridden only at the ballot box, so it would effectively erase the proposal being studied by the council 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 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 federally mandated minimum wage.
SMART’s proposal would boost the pay of some 3,000 employees, whose salaries range from the $5.75 paid to many restaurant dishwashers and valets to more than $9 for housekeepers at luxury hotels.
“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.”
Backers of the business version of living-wage rules scoff at accusations that they are trying to pre-empt the process, but, in reality, that’s exactly what could happen. Voters will know in less than two months whether the measure has qualified for a spot on the ballot. The council isn’t expected to decide the fate of its trail-blazing measure until sometime after June 26, when a study is completed on the effect of the rule in Santa Monica.
Proponents of the living-wage ordinance the council is considering were quick to blast the ballot measure, calling it “deceitful and undemocratic” and comparing it to the tobacco industry’s antismoking initiatives. “This cynical Trojan horse gives public workers nothing new and steals hope from private workers,” said Councilman Kevin McKeown, who noted that the city already is preparing a living-wage ordinance for city contractors. “In attempting to hoodwink the voters, short-circuit our study and replace public process with well-financed deception, the proposed initiative isn’t a living wage, it’s a lying wage.”
Councilman Michael Feinstein, who, like McKeown, is a Green Party member, called the initiative “a theft of democracy, which insults our community by bypassing our civic process. What is happening here is that a small group is trying to buy itself onto the ballot.”
The ballot measure is an attempt “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.”
Larmore shot back, “Since when is the ballot box ‘a theft of democracy’? Why is he [Councilman Feinstein] so afraid of the voters? The real thefts have been committed by the council and SMART.”
Whatever its democratic merits, the ballot initiative is a politically shrewd move. The measure — which compensates for inflation by tying it to the Consumer Price Index for the Los Angeles area and exempts nonprofits — appears to reflect ideas that the original living-wage proponents have long championed. But it is so watered-down and affects so few employees — only those with companies under city contract — that it is considered relatively useless.
“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.”
Advocates of the business-backed measure cleverly try to dismiss opponents as misguided. “They’re jumping up and down in L.A. County saying it’s great, and they’re jumping up and down here saying it won’t cover anyone,” said San Francisco consultant Mark Mosher, who was hired by the hotel and restaurant owners after he helped raise $1.4 million for Mayor Willie Brown’s re-election.
Sponsors of the county’s living-wage law are troubled by the way Santa Monica businesses are citing the county law as a reason to oppose the more generous, worker-backed rules. “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 Janis Aparicio, who heads the Los Angeles Living Wage Coalition. “I’m outraged by that.”
Longtime living-wage proponents say the proposed ballot initiative 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.” Monroe said the Jonathan Club dismissed 30 workers because they backed the living-wage rule; a club spokesman denied this, saying it was a “strictly business” decision and that their work would be contracted out.
This week, the City Council asked its staff to “analyze the potential effects of the proposed so-called ‘living wage initiative,’ including the breadth or narrowness of the proposed initiative’s application to workers, including what type of workers may or may not be covered.” Staff also are expected to study “how the proposed initiative might legally affect actions the present City Council may take regarding a living-wage ordinance.”
Mosher — who helped modify a San Francisco living-wage proposal — predicts that staff will find that the initiative covers parking attendants and contracted employees at Santa Monica Airport and in parks across the city. “There are many contracts let that are outside the zone,” Mosher said.
Business owners targeted by the proposed ordinance have long contended that SMART is trying to get the council to do what the local Hotel Employees and Restaurant Employees union has failed to achieve by organizing workers. They also charge that they have been left out of the city process, which they say has been tainted by bias. For evidence, they point to professor Robert Pollin, an advocate of the living wage hired by the council in January to study the issue for the city.
The New England professor can’t be objective, critics charged before the 6-1 vote to hire the economist from the University of Massachusetts, Amherst. After all, they protested, it was Pollin who penned the definitive book on the benefits of the living wage. And it was Pollin who, out of more than 50 experts, submitted the only bid for the job. His team of researchers is conducting a four-month study for $50,000.
“The [City] Council has put a lot of trust in myself and our team of researchers,” Pollin told a crowd of more than 100 during his first public appearance last month. “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.”
The study, expected to be completed by June 26, has not been an easy one to conduct. Hotels and restaurants were key among the businesses targeted by the proposal. The study has to grapple with myriad 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, one of the workers let go by the Jonathan Club last week.
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 Srebnik, 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 Santa Monica–Malibu Unified 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 chairman 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 action the council takes may be moot 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. The council has until early August to decide whether to place the ordinance on the November ballot. If two competing measures go before voters, the one that gets the most votes would go into effect. “Let the voters decide,” the Chamber’s Larmore said. “The ultimate power is in the voters.”