Hot Dog on a Stick

By Michael Feinstein. Inside/Outside. January 11, 2016

Location, location, location. Its a major reason we have a well-funded local government and great public services in Santa Monica – in large part from the tax dollars generated by our tourism and visitor-oriented service industries. But it’s also about the karma of what we do with this blessed opportunity.

We in Santa Monica have long prioritized keeping our public spaces open, clean, safe and accessible; ensuring that at least some local dining, arts, culture, entertainment and recreation is affordable; and providing top level public transit to get here. We’ve also made environmental stewardship a key priority, evidenced by our internationally renowned Sustainable City Plan.

The workers

Along with those who invest in businesses and property in Santa Monica, part of our local wealth is created by those who work here. We don’t want our public services to be funded on the backs of underpaid workers, so there’s a broad local movement that recognizes and supports workers rights and fair wages for all.

Which brings us to Tuesday night’s Council vote on establishing a citywide minimum wage of $15 an hour for all non-hotel businesses (plus certain other benefits) by 2020 and $15.37 for hotels by 2017.

Santa Monica isn’t the first city to pass a local minimum wage law – many others across the county have already done so. In 2015 both the City of Los Angeles and Los Angeles County (for unincorporated areas) enacted laws to establish their own $15/hour minimum wages. But Santa Monica is among the first poised to enact a truly comprehensive ordinance that looks at all working conditions and benefits together, not just an hourly wage. That’s where interesting public policy choices come in.

Paid sick leave

Many low-wage workers do not have paid time off to address personal or family health issues. This can lead to health problems for workers and their families, job loss if illness prevents workers from attending their jobs, and broader public health implications if it encourages workers to put off treatment until their condition becomes serious.

California state law requires employers to provide at least three days of sick leave per year. The City Staff recommendation – supported by many in the local business community and by worker advocacy groups – goes beyond this to require at least five days for businesses with 25 or fewer employees, and nine days for businesses with 26 or more.

So far so good. But strong retaliation protection is also needed for employees taking paid leave. Exercising our rights under the law can’t lead to harassment and intimidation. We have such anti-harassment protections in place for tenants asserting their rights in their apartments. We need the same for workers in the workplace.

Seasonal workers

One of our long-term community goals has been to have affordable entertainment, recreation and dining on the Pier and beach. Yet the largest employers on our Pier and the operators of all of our beach bike path restaurant/bike rentals has stated if the $15/hour minimum wage were to apply to them, they would not be able to employ the same number of extra peak demand workers they need during summer and holidays, without substantially raising their prices.

At the same time, youth employment today is very different than what may have been the case in the “Leave It To Beaver” days of the 1960s. Today, increasing numbers of youth workers have a wider and deeper range of financial and other responsibilities, and often struggle with making ends meet.

This is a case where competing public policy goals conflict. How to square the circle?

No city in the state has an exemption for seasonal workers. Yet state law provides for a “learner” exemption, defined as someone working for the first time in an activity in which they have no previous or similar experience. City Staff recommends a learner exemption that would require employers to pay 85-percent of the minimum wage for 480 hours or six months, whichever is sooner – maintaining an incentive to hire first time seasonal workers and helping Santa Monica employers cope with seasonal employment cycles.

Wage theft, tip protection and “service” charges

Wage theft – often associated with Third World sweatshops, is widespread in California. Some employers pay less than minimum wage, don’t pay overtime, refuse to allow meal and rest breaks, deny paid sick leave, and steal workers’ tips. Despite strong labor laws, these practices persist because of insufficient enforcement. When workers report violations, the process can take years. The businesses that are responsible can shut down or change names. The result is that many workers who hold a court-ordered claim to receive their unpaid wages never see a dime. So any new law will need to ensure that benefits are truly realized by those they are intended for.

City Staff recommends a rigorous education and enforcement program, contracting with the Los Angeles County Wage Enforcement Program to implement it. Again so far, so good. But under current state law, there’s a loophole by which an employer can add a “service charge.” All of that can go to the employer, even if it appears on the bill where customers normally pay a tip.

City Staff recommends requiring that service charge proceeds go to workers who participate directly or indirectly in the chain of service; including back of house workers (i.e. in the kitchen) in the restaurant industry. At the same time, City Staff proposes that employers can continue their practice of adding other surcharges, such as for health care.

There is a bait and switch/lack of truth in the advertising aspect to these surcharges when they are not presented up front. There is also something inappropriate about insinuating that health care costs are an “extra,” somehow separate from other operating costs.

Despite concerns about sticker shock from local businesses, it is the consumer’s right to be informed of all costs up front before deciding upon a purchase, and to be clear where the money is going. For this reason, I would accept this political compromise for today, but vote to phase it out over a period of years and require rigorous reporting to employees and consumers in the interim. But since I’m not on the City Council, even if they don’t make this improvement, I would still support the ordinance for the greater good.

Supersession and protecting wage increases

Many Santa Monicans have recently received mailers from a new group called the One Fair Wage Coalition, claiming to support a minimum-wage law in concept, but implying Santa Monica’s would be unfair to workers. Upon what basis? – the law’s union supersession clause, something already part of Santa Monica’s 2005 Living Wage ordinance for City Contractors and several City development agreements.

Union supersession clauses are common in many city and county living wage ordinances around the country. They provide that some or all of the conditions of a minimum or living-wage ordinance may be “superseded” by a collective bargaining agreement.

Such supersession clauses could allow unions to negotiate a more dynamic package of wages and benefits that better fit a particular industry or workplace, where total compensation and the quality of working conditions negotiated might be higher than the minimum wage. But the main reason for them is to insulate wage increases from legal challenge – local collective bargaining agreements formed while new wage floors were in place would be protected. If there is a referendum campaign against Santa Monica’s minimum wage law by this new group – which has not revealed its members nor its funding, but is represented by an opponent of Los Angeles’ minimum-wage law – expect this to be the element they seek to misrepresent, rather than taking on the minimum-wage increase itself.

A new floor of justice

As a city with far higher than average local living costs, Santa Monica’s minimum-wage increase is overdue. It will increase the chance that those who work here can live here, helping to address congestion and pollution from long commutes, and promoting a more inclusive and diverse community. By putting more disposable income in the hands of low wage workers, it will stimulate our local economy, as some of those funds are spent locally. And by promoting more fairness for workers, it will reorient our local economy around a new floor of justice.|

Michael Feinstein is a former Santa Monica Mayor (2000-2002) and City Councilmember (1996-2004) and voted for Santa Monica’s first Living Wage ordinance in 2001.  He can be reached via Twitter @mikefeinstein

Inside/Outside‘ is a periodic column about civic affairs Feinstein writes for the Daily Press, that takes advantage of his experience inside and outside of government.