The city of Santa Monica is considering a “living wage” proposal that would force dozens of businesses in its trendy Third Street Promenade and beachfront resort areas to pay their workers a minimum of $10.69 an hour.
Unlike living wage ordinances in L.A. and other cities, this proposal would apply to all businesses along the city’s coastal strip with more than 50 employees, regardless of whether they receive contracts or other dollars from the city.
The plan would impact an estimated 40 to 50 businesses primarily hotels, restaurants and major retail stores that employ a total of 3,000 workers.
“Forty or 50 businesses being hit with this in a small zone like the coastal zone would have a significant impact on the overall business in the area,” said Gwen Pentecost, senior administrative analyst in the city’s economic development department.
At its Sept. 7 meeting, the City Council is expected to take up a motion asking outside consultants to study the idea. The proposal itself would come to the council sometime early next year; if passed, it would likely take effect in January 2001.
The concept has the support of at least two of the city’s seven council members: Paul Rosenstein and Michael Feinstein.
“I generally agree with the concept of a living wage,” Feinstein said last week. “I’m interested to see how that might work here, given the realities on the ground. That’s what I hope the study will show.”
The proposal comes from a labor activist group that is engaged in a bitter dispute with the owners of the Miramar Sheraton Hotel in Santa Monica. It would cover all businesses with more than 50 employees in a half-mile-wide strip from the shoreline east to Fourth Street in the area north of Pico Boulevard, and east to Lincoln Boulevard in the area south of Pico.
“This is our attempt to get at the problem of low-wage jobs in the city,” said Stephanie Monroe, an organizer with Santa Monicans Allied for Responsible Tourism, or SMART. “A traditional living wage ordinance wouldn’t work here because so few of the businesses that employ these low-wage workers actually receive direct public dollars.”
Rather, Monroe said, the public investment in business along Santa Monica’s coastal zone is indirect, in the form of redevelopment money and infrastructure investment.
“This area has become an incredibly lucrative place to do business,” Monroe said. “Yet the workers they employ earn so little that they have to turn to public assistance. With so much money going into the pockets of employers in this area, the taxpayers should not have to pick up these costs.”
Monroe said the wage level of $10.69 an hour or $21,000 a year is the amount required for a family of four to live in Santa Monica without having to resort to food stamps. It’s nearly 50 percent higher than the living wage of $7.40 an hour with benefits ($8.75 an hour without) that was passed by the L.A. City Council in April 1997. The wage level is also nearly double the state’s $5.75-an-hour minimum wage.
The proposal has sparked concerns at the Santa Monica Chamber of Commerce.
“If this were to pass, a number of restaurants would see their payrolls essentially double,” said Tom Larmore, a Santa Monica attorney who heads up the chamber’s task force on the proposal. “Since they already operate on such narrow margins to begin with, many restaurant owners have told me they would be forced to close.”
Larmore said there is also concern that the higher costs would be passed on to customers.
