A few weeks ago, City Council unanimously authorized staff to pursue the drafting of a citywide minimum-wage ordinance with hopes of approving a living-wage measure by August. City Hall has already established $15.37 per hour minimum wage for city employees and contractors, as well as a condition for development agreements.
The Los Angeles City Council recently approved a citywide minimum wage ordinance that would increase the city's living wage in increments to $15 per hour by 2020.
Recently, Los Angeles County 3rd District Supervisor Sheila Kuehl asked her fellow supervisors to support drafting an ordinance raising the county's minimum wage incrementally over the next five years from $9/hour to $15/hour in unincorporated areas. She's asked for a proposed ordinance within 45 days.
Despite the sudden rush to raise minimum wages, Santa Monica has been waging the "Living Wage War" since the 1990s. A coalition led by Santa Monica Allied for Responsible Tourism (SMART) consisting of labor leaders, activist clergy and power players from the Santa Monica for Renters' Rights (SMRR) political organization were crusading for all-encompassing minimum wage legislation starting with low-wage hotel workers.
Well-heeled hospitality and other downtown business interests fought back. They formed Santa Monicans for a Living Wage and concocted ballot Measure KK for the November 2000 election to fight a proposed ordinance implementing minimum wage standards in the city. Measure KK asked voters to approve or rescind council's approval of amending the city charter to require minimum wage and employee benefit requirements for some employees working on city contracts. Most importantly, KK barred City Council from establishing, modifying, or regulating any wage and benefit requirements. After a nasty fight, KK was defeated nearly four to one at the polls.
In May 2001, City Council approved an ordinance (effective July 1, 2002) that established a new local minimum wage requirement up from $6.75/hour to $10.50/hour with health care benefits, or $12.25/hour without, applicable to city employees and its service contractors, and expanded the wage requirement to all private businesses in the coastal zone and downtown areas with annual gross receipts of over $5 million.
Restaurant, hotel and downtown businesses once again raised piles of money and floated ballot Measure JJ that required voter ratification of council's action. The measure was narrowly defeated in the November 2002 election, killing any living-wage mandate. 51.69 percent of the voters opposed it amid charges of deceptive and misleading campaign mailers by proponents. Sound familiar?
Had it been approved, Santa Monica would have been the first city to establish a minimum wage (affecting 2,000 low-wage workers) for employees of private businesses.
Since then, City Hall policy makers have resorted to other methods of promoting living-wage requirements. In March 2012, council approved plans by developer Alexander Gorby to renovate the historic Santa Monica Professional Building at 710 Wilshire and convert it into a hotel only after Gorby agreed to a $12.85/hour minimum wage for hotel workers.
In 2013, Council approved development agreements for two six-story hotels at Fifth Street and Colorado Avenue after that developer agreed to a living-wage rate of $15.37/hour as demanded by hospitality workers' union Unite Here, Local 11. It's no secret that unionized hotel workers have returned the favors by successfully campaigning for union-friendly SMRR candidates.
Tragically, we're in a county where 2.7 million residents live in poverty. Many county residents, despite working full-time, earn too little to cover the bare necessities such as adequate housing, food and basic health care. There are pros and cons for raising the minimum wage.
Yes, it raises the pay of the lowest-income workers and their families, but upping the minimum wage every few years by a buck or two doesn't erase poverty or provide the tools for low-wage workers to acquire skills needed to escape poverty's grip and begin climbing the economic ladder. Sadly, even a $15/hour minimum wage won't enable low-wage workers to live in Santa Monica or afford to shop here.
Worse yet, those on limited, fixed incomes such as Social Security, pensions and welfare get hurt by the inflation that usually results as wages increase. The burden of poverty hits the disabled and retired seniors — who find themselves even lower on the economic ladder — especially hard.
For the millions of employers whose businesses run on tight margins, increasing labor costs usually means charging more for goods and services or layoffs, cutbacks and business closures. About 15 years ago, I was told by a local restaurateur that if he had to raise a dishwasher's or busboy's pay from $6 to $10 per hour, he'd only hire experienced, documented, English-speaking workers.
He noted that as his lowest-paid employees' pay increased, everyone else's pay would also have to increase. He told me he couldn't pay a dishwasher or busboy $10/hour and still pay his trained cashier $8/hour or his prep chef $9/hour. Each employee will have to get commensurate raises, which could lead to shorter hours, reduction of benefits, cutting staff or closing the doors if his customers refused to pay the higher prices that would inevitably come because of the higher costs.
Such complicated issues defy Band-Aid solutions. There's nothing wrong with boosting minimum-wage requirements, but it must be done in association with providing tax incentives for job creators and training/educating workers, too. That way, entry-level workers are better equipped to escape poverty's grip and avoid a future of minimum-wage jobs.
Bill Bauer can be reached at mr.bilbau@gmail.com.
