Minimum Wages Are Being Set, City by City

J Schaffner jschaffner at
Fri Nov 19 18:32:12 MST 1999

<TITLE>Minimum Wages Are Being Set, City by City</TITLE>
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<H5>November 19, 1999</H5><br>

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<H2>Minimum Wages Are Being Set, City by City</H2>


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<img src="/images/l.gif" align="left" alt="L">OS ANGELES -- What bothers Henry A.
Berber most about the new "living
wage" ordinance in Los Angeles is the
picketing at his restaurant, La Luz del
Dia, during a busy lunch hour. "The
way they are dressed," he said, "they
give the impression they are my regular customers, very dissatisfied. It
hurts me personally."

<p> The pickets are in fact community
advocates who pushed for passage of
the local law, which increases minimum wages at companies doing business with the
city. Because  Berber
leases his site  in a subsidized tourist
zone, the ordinance requires him to pay
$8.76 an hour, not the $5.75 that is standard pay for kitchen help here. The reasoning
is that all his workers should
benefit from the public largess that
makes the quaint Olvera Street where
his Mexican restaurant is situated so
profitable.  Berber has raised his
bottom wage, but only to $6.75 an hour,
without health insurance -- and the
pickets are trying to get him to go the
extra distance.

<p>  "I am moving in the direction of
conforming," he said, leaning for emphasis across a huge, cluttered desk
that almost filled his small, low-ceilinged office. But to pay the full wage
now, he said, would put his restaurant in
the red.

<p>  Here and elsewhere, a small but increasing number of employers who do
business with government are suddenly
finding themselves required by local
ordinances to grant big raises and benefits to their low-wage workers. Forty
cities and counties in 17 states, particularly those with large constituencies of
low-wage workers, have enacted such
wage laws since the movement began
five years ago.

<p>  As one follows another, lately at the
rate of a new ordinance a month, the
movement has begun to broaden from a
simple emphasis on higher wages into a
wide range of requirements involving health insurance, vacations, sick
pay, job security and incentives to

<p> "You have to look at the living
wage movement in the context of the
utter failure of federal labor law,
now so stacked against workers,"
said Madeline Janis-Aparicio,  director of the Los Angeles Living Wage
Coalition. She cited what she said
was Washington's failure to raise the
national minimum wage to keep
pace with the needs of the working
poor or to strengthen labor's bargaining power. The coalition,  an
amalgam of community groups,
churches and unions that organized
the picketing at  Berber's restaurant, is out to redress the balance.

<p>    As the ordinances spread, business
opposition and complaints about
higher costs and patchwork regulation are on the rise.
<p>But the vast
majority of affected companies,
though often ducking full compliance, have generally lived with the
law rather than give up profitable
contracts, subsidies and leases on
choice city-owned properties like Olvera Street, three studies have found.
The early evidence suggests that relatively little of the extra cost has
been passed on to the cities or to
consumers. Companies are absorbing the higher wages or finding ways
to offset them.

<p>  "The cost increases for companies
in Los Angeles were only 1 to 1.5
percent of their total expenses," said
Robert Pollin, an economist at the
University of Massachusetts at Amherst who led one of the studies.

<p>  This wage movement is an increasingly popular tool for improving the lot of
janitors, cleaning people, restaurant and health care workers, security guards,
school bus drivers, parking attendants and  others
who earn  less than $8 an hour. That
group represents 25.7 percent of the
work force, or 28.5 million people.

<p>  Yet only a fraction of these workers -- no more than 44,000, according
to an analysis by  Pollin, Mark
Brenner and Stephanie Luce --  are
covered so far by wage ordinances,
the largest group being the 9,000 or
so in Los Angeles. But more than 50
other cities and counties are considering such bills. One alone, in San
Francisco, would nearly double the
number of workers covered nationwide if the proposal now before the
Board of Supervisors passes.

<p>  The ordinances cover the companies that tap the public till through a
tax abatement, for example, or a
service contract to clean schools or
through leases at a city airport; the
companies can be cut off if they fail
to raise wages. Here in Los Angeles,
<B>United Airlines</B>  and <B>Delta Air</B> <B>Lines</B>
have accepted the ordinance as lessees at the international airport, imposing the new
wage -- $8.76 without
health insurance, or $7.51 in pay and
$1.25 for health insurance --  on the
contractors and subcontractors who
supply baggage handlers, security
screeners, wheelchair attendants
and the like. The airlines' own employees generally earn more in
wages and benefits than the law requires.

<p>  "United resisted the ordinance for
a while and could have tied us up in
court for a long time," said Isaac
Nuru, lead organizer at the airport
for the Living Wage Coalition. "But it
did the moral thing; it did not want a
bad press."

<p> The ordinances have their limits.
They are hard to enforce even when
city officials audit corporate payrolls, as they do in Los Angeles and
one or two other cities. Further,
though companies like United and
Delta comply with the ordinance at
the city-owned airport here, workers
employed by contractors at the airlines' other sites in the city are not
covered. And companies do not have
to comply with the ordinances in
most cities until existing contracts
and leases are renewed or revised,
though some companies do so anyway.

<p> <B>Host Marriott</B><B> Services</B> did. It runs
bars and restaurants at the airport
here and has applied for a revision of
its lease to expand. Even before submitting the application, the company
increased the pay of 700 airport
workers to the levels specified in the
ordinance, which took effect last January at the airport. And in a bit of
horse trading, Ms. Janis-Aparicio's
coalition has endorsed Host Marriott's request.

<p> "You monitor every lease that
comes up for renewal or revision,"
she said, "and you go to the company
and say, 'We want to work with
you.' "

<p> Still,  much of American business,
once indifferent to a movement that
seemed to apply to so few workers, is
now fighting the effort more vigorously -- denouncing the laws as an
excessive  cost for business and a
distortion of wages, which should be
set in the marketplace, not by government.

<p> "When you raise the wage so
much, a lot of the people you are
trying to help will lose their jobs,"
said Thomas R. Larmore, a lawyer
in Santa Monica. He heads a Chamber of Commerce committee formed
recently to prevent passage of a
wage proposal in Santa Monica that
would be the first in the country to go
beyond companies that benefit directly from city business. The ordinance would apply
to an entire commercial district, a two-mile stretch
of Pacific coast developed with public funds as a tourist mecca.

<p> Within this zone, which extends
three blocks inland from a promenade overlooking the ocean,  no company with more than
50 employees
would be allowed to pay its workers
less than $10.69 an hour. Other provisions, borrowed from the Los Angeles ordinance,
include paid vacations, a health insurance requirement and a provision to protect
workers against retaliation.

<p> The zone flourishes, the argument
goes, because the city spent hundreds of millions of dollars to develop it as a
tourist and entertainment center, and limited the number
of hotel rooms, to help keep  room
rates high, often above $300 a night.
Low-wage employees, advocates
say,  should share more of this public
bounty, or at least earn a high
enough wage to live in Santa Monica.
Most commute from poor Los Angeles neighborhoods.

<p>  Larmore says such reasoning
is spurious. "It is totally backward to
say that business is subsidized by the
city," he said. "It is business that is
lifting the city," he added, by providing a huge flow of tax revenue that
allows the city to provide many services.

<p> A majority on Santa Monica's seven-member City Council, which recently approved a
ban on automated
teller  fees for nonbank customers
that has been temporarily set aside
by a local court, favors the ordinance. But rather than act now, the
council is likely to wait while the
wage issue is fought out in next
year's election campaign.
Chamber of Commerce is raising
money to support candidates who
will oppose it.

<p>  Wage ordinances have become a
goal of such national groups as the
Independent Areas Foundation and
the Association of Community Organizations for Reform Now that
seek to bring community groups together in social action campaigns.
And with increasing frequency, the
ordinances are becoming big issues
in local politics.

<p> In San Francisco's Dec. 13 runoff
election for mayor, the issue divides
Willie Brown, the incumbent, who
has been lukewarm about a wage
law, and his challenger, Tom Ammiano, president of the Board of Supervisors and chief
sponsor of the
 proposal. It specifies a wage of $11
an hour, surpassing the current national leader, San Jose, where an
ordinance requires $9.50 with health
insurance and $10.75 without. By
comparison, the national minimum
wage is $5.15 an hour; adjusted for
inflation, that is nearly $3 less than it
was in 1968.

<p> "If the bill is watered down too
much, say to $9 an hour,"  Ammiano said, "and nonprofit organizations are exempted and
there is not
enough funding for enforcement,
then I would advocate taking the
proposal to a referendum."

<p>      The first such ordinance was enacted in Baltimore, in December
1994, largely through the efforts of a
community organization called
Build. Last November, Build got
thousands of residents in poor neighborhoods to the polls. Most voted for
the re-election of Gov. Parris N.
Glendening of Maryland, who is increasingly using the city's ordinance
as a model for contracts that the
state makes with private companies.

<p>       Here in Los Angeles, Mayor Richard J. Riordan tried to block the
measure, but his veto was overridden by the City Council. "I believe
employers should be aware that employees who earn under $10 an hour
cannot lead an independent life," he
said. "But I do not believe that government should dictate wages. We
have seen this fail in Socialist and
Communist countries. It will do irreparable harm."

<p>  Mayor Riordan said, however, that
he agreed with supporters of the
wage ordinance   that income inequality had increased in part because of
the decline in union bargaining power.
<p>Several ordinances try to reverse
that trend through an "opt out" loophole that lets companies partly off
the hook if they agree to let their
workers organize.

<p>  Half of  Berber's 28 employees,
for example, have signed a petition
seeking union recognition. If he
granted recognition voluntarily, the
opt out clause would allow him to
negotiate a labor agreement that
permits pay and benefit levels below
the city's mandated wage, at least
temporarily. But he would be locked
into a union -- a central goal of Ms.
Janis-Aparicio's coalition.

<p>  "Whenever you rely on legislation
solely, the gains can be lost," she
said, noting that the Los Angeles City
Council's current pro-labor bent
could disappear in a future election.
"So we need to build union agreements that have community support
and will last."

<p>     While running a refugee center
here, Ms. Janis-Aparicio, 39, was recruited into her present line of work
in 1993 by Miguel Contreras,  now the
powerful executive secretary-treasurer of the Los Angeles County Federation of Labor.

<p>  Contreras, who had worked
with Cesar Chavez's United Farm
Workers, was mindful of the public
support -- the consumer grape boycott -- that had brought such success
to the farm workers. So he asked Ms.
Janis-Aparicio to set up a nonprofit
organization that could foster similar community support for labor. She
founded the Los Angeles Alliance for
a New Economy, which operates
with a $1 million annual budget and
18 salaried staff members. The wage
issue soon became the central cause.

<p> "This question of job inequities in
the public sector, if we address it as a
union, people say we are self-serving,"  Contreras said. "But if it
has the cloak of religious leaders and
community activists, then it becomes a community issue."

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