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Santa Monica OKs 'Living Wage' Law
Labor: The City Council approves $10.50 an hour minimum for employees
of large businesses set near the beach.
By OSCAR JOHNSON, BOB POOL, Times Staff Writers
The Santa Monica City Council approved a long-debated "living
wage" ordinance early Wednesday that would raise the hourly minimum
pay to $10.50 for workers at an estimated 40 large businesses in the
city's popular beachfront and downtown districts.
Backers rejoiced over what experts say is a national precedent
involving such a municipally approved wage increase for private
industry and said the move will help hundreds of workers support their
families. But opponents, especially oceanfront hotels, said the fight
is not over and pledged a court challenge over the measure's
constitutionality.
The 5-1 vote was cast at 2 a.m. after a seven-hour hearing. But
that just capped years of complicated battles of ideology and economic
analysis.
"It's a real huge milestone," said Madeline Janis-Aparicio,
executive director of the Los Angeles Alliance for a New Economy, one
of the groups pushing for the living wage. "Oh my goodness, we are
ecstatic. We have been working on it for three years."
Some changes were made during the long night of debate. The
biggest one reduced the number of businesses that would have to abide
by the ordinance, much of which would go into effect in July 2002.
Originally, businesses with annual gross revenues of more than $3
million for two consecutive years would have been included, but that
threshold was raised to $5 million. As a result, the estimated number
of businesses potentially affected dropped from 72 to about 40,
officials said.
"We made moderate compromises that will very significantly
improve the lot of low-wage service workers in Santa Monica's tourism
zone while protecting a vibrant business environment," Councilman
Kevin McKeown said.
Voting against the ordinance was Councilman Herb Katz, who
blasted it for singling out specific neighborhoods.
"It will end up in court," Katz said Wednesday, echoing what many
predict. "This is totally discriminatory in that it only affects the
coastal zone."
Opponents of the ordinance argue that most of the city's hotel
workers, such as maids, already average about $9.50 an hour. And they
say that food servers in high-end hotels make about $500 a week in
tips and additional unclaimed income.
The state minimum wage is set to rise 50 cents to $6.75 in
January.
"You have government interfering in private enterprise, imposing
wages that are way above federal and state standards," said Holiday
Inn manager Bob Buescher.
In addition, the affected businesses also must contribute toward
health benefits to the tune of $1.75 per hour; that benefit subsidy
would rise to $2.50 the next year. The ordinance also forbids
retaliation against workers who blow the whistle on bosses who fail to
comply with the law.
Exemptions will be allowed for businesses that have an economic
hardship or a work force that consists mainly of minors or seasonal
workers. Details for the exemptions will be worked out by a task force
in the near future.
Various so-called living wage ordinances exist in about 50 U.S.
cities, experts say. But those have mainly been aimed at businesses
that rely on government contracts or operate on government-owned land.
Santa Monica's version targets large private businesses that do not
have such contracts and that are on private property in specific
neighborhoods.
Backers argue that businesses in those neighborhoods have
benefited from the city's tourism promotion and from millions of
dollars in tax-funded beach, pier and street renovations.
"It's the first time that I know of that it's been applied to
workers that aren't contracted by a city or county," said Heather
Boushey, an economist for the Economic Policy Institute, a
Washington-based think tank that has not taken part in the wage
debate.
The $10.50 an hour is probably the third- or fourth-highest such
municipally set wage in the nation, Boushey added.
Supporters hope to influence other cities.
"I think we have crafted a very innovative ordinance that could
have impact throughout the country," said Vivian Rothstein, a member
of Santa Monicans Allied for Responsible Tourism, which supports the
wage increase.
The council meeting attracted a large crowd of ordinance
supporters and disgruntled businesspeople. But by the time the vote
was cast, the crowd had dwindled from hundreds to a few onlookers.
Le Merigot Hotel General Manager Sig Ortloff predicted layoffs
will result from the forced higher wage. "I don't want to be an
alarmist, but I might have to let go about 25 people--about 10% of my
work force," he said.
Although living wage supporters got most of what they wanted,
some argued that $10.69 should have been the wage floor.
Among those attending the meeting Wednesday morning was Elva
Hernandez. After 11 years working at the Doubletree Hotel, she makes
$12 an hour but supports the new wage for the housekeepers she
supervises, and because she said there are no health benefits.
"At my workplace they do not pay very well and things are
expensive, like rent, food and health insurance," she said.