The Little Policy That Could

San Diego CityBEAT, 4/20/05 |

Living wage affects few—so why’s it so significant?

It took close to five years, but last Tuesday, San Diego adopted an ordinance that gives workers employed by city contractors additional job protection. But despite news reports, the City Council did not pass a so-called “living wage” ordinance. A couple of last-minute amendments by City Councilmember Toni Atkins—amendments intended to strengthen the ordinance—means that, according to city rules, living wage will go back to the City Council once more for a final vote sometime in mid-May.

However, Donald Cohen, who heads the Center on Policy Initiatives (CPI), the left-leaning social- and economic-justice think tank that authored the ordinance, is confident that five majority votes will still be there next month.

CityBeat sat down with Cohen to talk about what he learned from five years of lobbying city leaders on a living-wage policy, whether the ordinance represents a new direction for San Diego politics and why it’s become so difficult for workers to climb the economic ladder.

CityBeat: Given the city’s financial state, did you consider delaying a vote on the ordinance, or did you know you had the votes?

Donald Cohen: We have a coalition of people that I represented, so in our coalition meetings we were all pretty much on the same page. No. 1: It’s never the right time. No. 2: Let’s be responsible by phasing it in. No. 3: If we don’t pass a policy that phases in, these workers will never get covered. By passing the policy and saying we’re going to [phase it in], now we can plan for it.

City Councilmember Tony Young said that if the city budget can’t handle the cost of the ordinance, he’ll rescind his vote. Any concern that when the living-wage portion of the ordinance comes back in mid-May—City Manager Lamont Ewell will have presented next year’s budget by then—Young will have changed his mind?

I was fine with [Young] saying it. We’re walking this tightrope of wanting to do the absolute right thing for the [workers], but knowing that this is a hard time for the city. I don’t think it will get rescinded. We plan to work with the city to make it as painless as possible…. We’re going to make this work. I think what you saw in the City Council deliberations was, people think that this is the right thing to do, even people who voted against us.

The first draft of the ordinance asked for higher wages—$11.95 an hour with healthcare benefits and $14.48 hourly without benefits. Do you think that was too ambitious a proposal?

The wage, it was high, but both of those numbers came from research. Maybe it was ambitious in a political sense but not ambitious in a sense of what ought to be the basic pay for people who work for us.

We started this on a research basis: what’s a self-sufficiency wage, what does healthcare cost? We’ve compromised and we continually tried to be clear about what this was about and how important it was, but factor in the city’s financial situation.

We ended up having conversations with all the impacted groups. I met with landscapers, I met with the arts organizations, I met with the city’s economic-development division and I realized our first proposal needed some nuance. For example, our first proposal was to require living wages for companies that got $50,000 in economic-development [subsidies]. We sat with the city staff and it didn’t make sense…. So we said, here’s what we’re trying to get: when you pay a major subsidy to a company, they should pay a living wage and we worked with city staff to come to that $500,000 [threshold].

Some folks have said that this ordinance marks a paradigm shift toward the interests of unions and social-justice groups, and away from business. What do you think of that statement?

I don’t think that’s exactly right. I think it’s finally a shift to balance. What we’re looking for is a worker-friendly town, business-friendly town. I think we’ve had an incredibly business-friendly town—very low wages, very low fees and taxes compared to other cities, very few regulations in certain areas and so we’ve just been saying, alright, businesses have to succeed, there’s no question we live in a market economy, but workers do too…. I think it’s more than labor now runs the town, or the progressive community now runs the city. I don’t think that’s accurate at all. I think what you saw is the City Council willing to say, yep, there’s two sides to this. We can’t be successful as a city and have productive businesses and enterprises without productive workers who can afford to live here, bring their kids to the doctor and who can have a decent life.

Another point that’s come up is: why can’t these workers make their way up the pay ladder without government support?

They’re 100-percent wrong about how the labor market works, what’s an entry level job and when can you work your way up. These are adults who’ve been working at these jobs and jobs like them for many years. It would be great if someone who wasn’t making enough money to support themselves could go to school, get more training and work their way up the ladder. But if the bottom rungs are underwater and you’ve gotta work two or three jobs, when can you go to school to get a better job and learn more skills? So I believe that the bottom rung has to be above water before people have a chance of going to school and getting better training. Otherwise they just spend all their time in survival mode.

In the ’50s, you went to high school, got a job at a factory, worked your way up the ladder and your kids go to college and you buy an RV. Those jobs are gone and now there are these service jobs. Tourism, janitorial jobs… these jobs have to become those jobs where you can get in, have enough to work your way up the ladder. The only way you do that is by lifting up the wages, but there’s less room for advancement in these industries. In hotels, it’s like a pyramid, there’s a bunch at the bottom, there’s a little bit more and then it tops out. So where do people go? You can give everyone a PhD, but the beds still have to be made.

The city manager came up with his own numbers as far as what the ordinance will cost the city. CPI came up with a different, lower set of numbers—why the disparity?

There are several… assumptions that they made that are inaccurate. They don’t know how much people make under their contracts because there’s no reporting on that…. They assumed 100 percent of the costs would get passed on to the city; we estimated 75 percent…. On their administrative costs [to monitor the ordinance], they were asking for a staff of five and $400,000, and that’s way too high. The city of L.A. doesn’t have anywhere near that much and they have $200 million in contracts and we have $15 million.

You spent a significant time lobbying the City Council, but the votes went as expected: the mayor and City Councilmembers Jim Madaffer, Brian Maienschein and Scott Peters voted against the ordinance. In the end, a no vote is a no vote, but do you think your lobbying efforts made a difference?

Absolutely. What I found most remarkable about that council deliberation was that all nine acknowledged that minimum wage and the wages we pay these workers are unsustainable for people…. On the idea, we won nine to zip. People had their different reasons for voting no, but on the idea that jobs should pay living wages and provide healthcare, we won nine-zero.

Was there ever a point when some City Council members wouldn’t have supported the ordinance regardless of the city’s financial situation?

Yeah. It gets all muddied by ideology and what I think are mostly pretty phony arguments on why not to do this. That was how you characterize the first two years of the debate: job loss, you’ll hurt the people you’re trying to help, this is a mandate on private business, government get out of the way. All these sort of standard arguments kind of just evaporated because they didn’t add up. These are our workers; we should pay them well.

Will CPI monitor the impacts of the ordinance on affected businesses, looking at things like whether they’re cutting workers to afford the increased payroll?

Absolutely. And if anyone does [lose their job], we’re going to help them find a job. If Elizabeth [who works at the city’s public restrooms near the City Hall concourse] loses her job because of this, she’s going to get another job and we’re going to bring her to City Council and say, make sure she keeps her job. These are loyal workers and there’s room for them. But the L.A. living wage study [by UC Riverside Professor David Fairris] shows insignificant job loss—way less than a percent.

The living-wage campaign was very worker-centered—putting a face on these workers. Criticism of your opponents was pretty much non-existent. Was that a tactical choice?

I think so. We always just kept coming back to the one truth: the people that work for us we ought to treat well enough so that they can live in this town. Anything else is a distraction…. The people that we profiled, these are the people that work for us. You walk past the security guards at City Hall—they’re our employees. And so I would sit down with any member of the City Council. The mayor and I, figuratively I would say, there’s a person right there who works for you. Do you think they should get sick days? Do you think they should get healthcare? Do you think they should get enough money to be able to afford rent in this town? Well, why don’t you do it? It’s not ideological; why don’t you just do it. There is a level of employer responsibility to the taxpayers and to the employees. I think that’s the balance.

Are you concerned that business groups might file a referendum against the ordinance?

There’s absolutely a chance. There’s talk in the opposition camp about collecting signatures. It doesn’t really make any sense for them to do that…. None of the people who are affected are the ones talking about [a referendum]. It’s just people who are ideologically opposed. It would be an ugly, ugly war… that I don’t think anybody needs here. In the end, this is a very small policy. It became the biggest thing in the world, but it’s a very small policy [affecting only about 1 percent of San Diego’s workforce]. It just plays its one little part.

If that’s the case, is it merely symbolic, a foundation for something larger or is it just what it is?

Symbolic in that people are now saying workers matter, too. No one’s turning against business. And what I thought about Wednesday morning was Elizabeth. There are some people who’re going to get a raise. I don’t care if it’s two, I don’t care if it’s 20, I don’t care if it’s 2,000. They’re going to get a raise. They work for us. We have a responsibility to them.

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