Let the market determine wages, not city officials

As billions of dollars pour into Santa Monica in the form of new apartments, office buildings and hotels, residents are being asked to come up with a clear definition of what a community benefit is so that City Hall knows what to demand of developers who want to build bigger than the zoning code allows.

Residents have a right to ask for something in return for letting entrepreneurs have wiggle room so they can make a better project and a better return on their investment.

During these discussions about community benefits, some have mentioned public art and childcare, bike lanes and straight cash money. (The Daily Press likes cash, just as long as the checks don’t bounce and the money is spent where it is intended.) While these are all great suggestions, there’s one that is raising concerns in the business community and the offices of the Daily Press — the requirement to pay a “living wage” to employees.

The idea is not new to Santa Monica. Just over a decade ago, Santa Monica was the scene of a bitter living wage battle that targeted hotels, restaurants and other big businesses operating near the coastline. The fight dramatically changed the political landscape by making hotels a major player in campaigns, and helped create a rift between the business community and City Hall.

The movement in support of a living wage — now hovering around $13.54 an hour — is what led City Hall to require certain contractors to pay their employees more if they cared to continue to do business with Santa Monica. It also helped employees at four hotels form unions and secure better wages and benefits.

Now those progressives behind the living wage movement are back and tempers are sure to flare once again as the living wage argument is an emotional one. It pits free market forces against labor-backed social activism, challenging people’s core personal beliefs about the role of government in free enterprise.

Just this month the Planning Commission held up a hotel development at 710 Wilshire Blvd. because of concerns about future employees and their pay. The developer wants to build more than the zoning allows, and in exchange some in the community want a living wage in return.

The developer has already agreed in principle to a number of community benefits, including shared parking; a local hiring provision; an internship program for students; the installation of solar panels and parking for electric vehicles; discounted meeting space for residents; space for bike sharing and a $244,000 transportation fee; among others.

A living wage requirement shouldn’t be one of them. While the Daily Press understands the reasons for wanting hotel workers to earn more, we cannot support a living wage requirement being classified as a community benefit.

We are concerned that this mandate by City Hall would be a dangerous precedent and not serve the community as a whole, but instead a small group of people who may or may not be Santa Monicans. It has the potential to drive businesses out and reinforce this belief — some say myth — that Santa Monica isn’t the most business friendly.

Those in support of the living wage law say the developer of the hotel will make millions of dollars on his investment and should share the wealth, which would in turn make for happier employees with enhanced purchasing power who could afford to live and shop in Santa Monica. This would provide more tax revenue for City Hall to fund services for residents. It’s all about helping people move up so they can provide a better life for their families.

But doesn’t Santa Monica do plenty of that already? Taxpayers see millions of their dollars go toward affordable housing, subsidized childcare and services for the homeless. The Big Blue Bus is award winning for its service, providing discounted transportation for those who cannot afford a car or who choose to ride to reduce their carbon footprint.

These are true community benefits. While paying an employee a few more dollars more an hour will help them and their family, a worthy goal, what will it do for the community as a whole? Will these hotel workers be able to live in Santa Monica? Most likely not, unless they are already living in affordable housing partially provided by taxpayers. Will they be more likely to shop at Santa Monica Place or along Main Street and Montana Avenue? Probably not. There is no guarantee that this expanded purchasing power will benefit Santa Monica. And with no guarantee it’s not worth moving forward with an idea that is sure to reopen old wounds.

If hotel employees want a better wage, there are other options available. They can come together and try to negotiate or they could work with their counterparts at other hotels, hook up with organized labor and try to unionize. It won’t be easy, but it is an option available that does not involve a mandate from City Hall.

Another option could be galvanizing the masses to support an increase to the minimum wage nationwide. Use the energy created by the Occupy Wall Street movement to do something tangible and help millions of people across the country, not just in Santa Monica. That way Santa Monica would not be singled out as the city that forces businesses to pay more for a job that may not necessarily warrant a higher wage.

The residents of this city have proven that they care about social justice and have funded initiatives to improve the lives of the less fortunate. When it comes to wages, let the market dictate. Instead of requiring a living wage, demand that developers contribute money toward true public benefits, such as improvements to parks and roads, better bus service or funding for our public schools. Spreading the money around is the best way to help the community.