wage/kanter/mike1st/mark2nd
LARRY KANTER Staff Reporter
Following months of bitter debate, the controversial “living wage” ordinance appears headed for passage.
In interviews with the Business Journal, eight of the City Council’s 15 members said they support the proposal, which is designed to boost wages and benefits for minimum-wage employees of firms that contract with, or receive financial assistance from, the City of Los Angeles.
Four councilmembers said they were undecided or refused to comment on the matter. Only three councilmembers voiced outright opposition to the proposal.
For the measure to become law, it will need 10 votes to overcome a promised veto by Mayor Richard Riordan.
Proponents of the wage boost say the votes are there.
“We think it’s veto-proof,” said Sharon Delugach, chief of staff to Councilwoman Jackie Goldberg, the proposal’s main architect.
The proposed ordinance would require companies that contract with the city, or receive substantial amounts of financial assistance from the city, to pay their service workers $7.25 an hour with benefits or $8.50 an hour without.
The measure won unanimous backing from the City Council’s budget and personnel committees last week, and will go to the full council for consideration within the next two weeks, Delugach said.
When it does, it is likely to receive a warm reception.
“As a government, we have to be a role model,” said Councilman Mike Hernandez, who vowed to vote for the measure.
Added Councilman Richard Alatorre in a written statement: “This ordinance will go a long way in ensuring fairness for workers at all levels.”
The Mayor’s Office and local business community have long held that the wage hike would place severe strains on the city budget and drive many companies away from Los Angeles arguments that appear to have found little resonance in the City Council.
“I don’t believe it’s a budget-buster,” said Councilman Michael Feuer, who said he will vote for the measure. “I don’t think that the ordinance is going to do anything more than assure that several thousand workers get a better wage and some benefits.”
With time running out before a council vote, opponents of the measure are feverishly strategizing and will begin a heavy lobbying effort at City Hall, said Carol Schatz, executive director of the Central City Association of Los Angeles, a business advocacy group.
“We’re going to do everything we can to present all of the facts and the ramifications” of the wage hike, Schatz said. “We hope that (council members) will see the realities of this.”
That could be an uphill battle. A recent report by two of the city’s top fiscal officials, Chief Legislative Analyst Ron Deaton and City Administrative Officer Keith Comrie, strongly backed the proposal.
The study concluded that the measure would cost $21.6 million. About $14.7 million of that would fall on the city’s three proprietary departments (airports, harbor, and water and power). Those departments would, in turn, pass those added costs along to contract holders and consumers in the form of higher food prices or other charges.
About half of the remaining $7.1 million would be passed on to the city’s other contractors, meaning the impact on the city’s general fund would be limited to about $3.6 million, the report stated. About 70 city jobs would be cut as a result of the measure, the report estimated.
As for the private sector, the measure would cause about 1,000 minimum-wage jobs to be eliminated. But three-fourths of those workers would probably find work elsewhere, the study concluded.
The city attorney’s office, however, has said it does not believe the ordinance can be applied to the city’s semi-autonomous, revenue-raising departments a position that opponents of the measure intend to exploit in their final lobbying blitz.
“We think it’s unwise to forward an illegal ordinance to the council,” said Gary Mendoza, deputy mayor for economic development, at an emotional, standing-room-only Feb. 18 meeting of the council’s budget and personnel committees.
The ordinance, if approved and implemented in the semi-autonomous departments, would become the subject of costly court battles, Mendoza and other opponents said.
Mendoza also argued that the ordinance could endanger some of the city’s highest-profile economic development projects, including the proposed downtown sports arena for the Lakers and Kings.
That remark drew a scornful laugh from Councilwoman Rita Walters.
Sports franchises pay athletes “millions of dollars to bounce a ball around,” Walters told Mendoza. “For you to come here and talk about these people not being able to pay a living wage is beyond the pale.”
Mendoza replied, “I respectfully disagree with your analysis.”
Meanwhile, John Semken, vice president of Majestic Realty and project manager of the proposed arena, denied that the living wage would have any impact on the arena.
“That’s Gary Mendoza’s opinion,” Semken said. “We haven’t even considered it.”
