PAY – Santa Monica Chamber Pushes Minimum Wage Plan

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Anywhere else, the idea that a chamber of commerce would back a living wage proposal would be preposterous.

In Santa Monica, it’s just the latest round in an escalating wage war between the City Council and local activists on one side and owners of the city’s hotels and restaurants on the other.

In a pre-emptive strike, a business group calling itself Santa Monicans for a Living Wage launched a ballot initiative drive that, if approved by voters, would require companies receiving at least $25,000 in city contracts to pay their full-time employees a minimum wage of $8.32 per hour with health benefits, or $9.46 without.

While the initiative may seem worker-friendly on its surface, several city officials and advocates for the working poor are insisting it’s disingenuous.

They point out that Santa Monicans for a Living Wage is backed by the owners of the city’s beachfront hotels and restaurants and businesses along the Third Street Promenade, and that its proposed initiative, if passed, would scuttle a proposal the council is currently considering that would raise the minimum wage to $10.69 an hour plus benefits for all businesses with 50 or more employees within the two mile-band known as the coastal zone. (California’s minimum wage is $5.75 an hour.)

The chamber is heading up the initiative and its backers include businesses within the coastal zone.

Once the city attorney’s office prepares a summary of the proposed initiative, the group can begin collecting the 9,000 signatures necessary to put it on the November ballot. If it passes, it would supercede any other ongoing efforts to raise the minimum wage, and require that all future attempts be subject to voter approval as well.

Awkward position

The initiative filing has outraged some council members, as well as local advocates for the working poor, and put them in the uncomfortable position of opposing something they have campaigned for successfully elsewhere.

“It’s very clever,” said Stephanie Monroe, director of Santa Monicans Allied for Responsible Tourism (SMART), which drafted the coastal zone proposal. “It’s the ultimate insult, a blatant attempt to disguise an anti-living wage law. Any so-called living wage proposal that comes from them isn’t designed to help.”

“This Trojan Horse proposal isn’t a living wage, it’s a lying wage,” added Councilman Kevin McKewon. “It serves up a watered-down soup to poverty workers and serves nothing else on the menu.”

But members of the new coalition are equally indignant over what they see as an anti-business bias on the part of the City Council, which they accuse of ignoring economic reality: small businesses and restaurants can’t afford to pay their employees $11 an hour.

“There’s no reason to believe this City Council will act responsibly,” said Tom Larmore, a local attorney who heads the chamber’s living wage committee and is a member of the business coalition. “They have totally dismissed our suggestions.”

When SMART first proposed the coastal zone living wage, businesses in the zone protested, and appealed to the council to set up a committee of various interests. The council instead chose to search for an outside consultant to study the economic impact of the proposal.

Only one consultant submitted a bid, economist Robert Pollin of the University of Massachusetts, who has written extensively as an advocate of the living wage. Pollin is due to complete his study by the end of June, but business owners are sure that the deck has been stacked against them.

“Professor Pollin is an apologist for the living wage,” Larmore said. “This has given the business community the impression that this is being railroaded through.”

Other side

Living wage advocates accuse Larmore’s group of bad faith as well. The proposed ballot initiative would exempt companies that lease city-owned land, limiting the affected businesses. Proponents assert that their plan is much like the one in effect in Los Angeles, but opponents point out that there are far fewer city contractors in Santa Monica.

“This city doesn’t need to give out big subsidies for companies to do business here,” Monroe said. “We looked at this model two years ago and we figured it would only cover 250 workers total. Santa Monica simply doesn’t subcontract out that much.”

In the meantime, council members sympathetic to the idea of a living wage say there is no way they would isolate the business community and make it economically unfeasible to operate in Santa Monica.

“I’m not going to pass anything that is clearly going to undermine the local economy,” council member Michael Feinstein said.

He said he will study Pollin’s report before making up his mind, and added that there are options to consider, including ones that take into account the plight of restaurants.

But he worries that by trying to bypass the City Council through the ballot initiative, businesses would also eliminate further public hearings on the matter. In addition, the large hotels backing the ballot initiative will be able to pay for a public relations campaign that neither the council nor living wage advocates can match.

“This is an end run around the City Council and the city at large,” he said.

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