Rising War Over Raising Pay : City Council, Mayor Clash Over Plan to Boost Wages for Contract Workers

For more than a year, the 51-year-old janitor has worked at Los Angeles’ elegantly restored Central Library, scrubbing toilets, polishing floors, emptying trash bins.

If he were on the city payroll, he’d be earning the $9.76 an hour that city workers with his job and experience get, plus benefits including family health insurance, paid holidays and vacation time.

Instead, because he works for the private firm that holds a city contract for library custodial services, he makes the federally mandated minimum wage--raised this month to $4.75 an hour--and gets no benefits.

His circumstances, along with those of other workers who live below the poverty line despite working full time, underscore a deepening rift between the pro-labor liberals who dominate the City Council and the business-oriented, efficiency-minded Mayor Richard Riordan.

Liberals, led by Councilwoman Jackie Goldberg, want service workers who are employed by municipal contract-holders to receive a “living wage” of at least $7.50 an hour with benefits, or $9.50 an hour with no benefits. The same rules would apply to firms that receive certain kinds of city financial assistance.

Paying workers something they can live on is not only the ethical thing to do, proponents say, it makes sense economically by enabling minimum-wage families to get off the public assistance rolls that many of them now qualify for.

The council’s Personnel Committee, which Goldberg chairs, has been working on an ordinance that it hopes to bring to the City Council before the end of the year. Among other things, the committee is wrestling with exactly which categories of firms and which of their workers would be covered.

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Until those and other issues are clarified, it is difficult to know how many companies and how many workers would be affected. One outside researcher estimated, based on an earlier version of the proposed ordinance, that 849 companies and 10,596 workers would be covered.

Weeks of lengthy hearings have turned committee sessions into a battleground between proponents, led by the labor union-organized Living Wage Coalition and some religious leaders and community groups, and opponents, comprising the mayor’s office and most of the city’s business leadership.

Opponents say such a measure would wreak economic havoc and hurt even those it is meant to help.

Any municipal mandate to boost wages and benefits, opponents say, would wipe out jobs for the most desperate and put area businesses at a disadvantage with their less regulated competitors. (Even a proposal on the Nov. 5 state ballot to raise the California minimum wage--to $5 an hour on March 1, 1977, and to $5.75 one year later, would not reach the wage levels being contemplated in Los Angeles.) It would drive up costs to city taxpayers, they contend, and deal a severe blow to a local economy emerging from a five-year recession. Hardest hit, they say, would be small businesses--many owned by women and minorities.

“We don’t disagree with the ends, but the means. [A living wage law] could result in a very dangerous and deep wound, a self-inflicted wound,” said Deputy Mayor Gary Mendoza, who oversees economic development issues for Riordan. “The unintended consequences of good intentions would be to eliminate many of the jobs that are the first rung on the ladder to economic well-being.”

A representative of the 2,000-member Los Angeles Area Chamber of Commerce put it more bluntly during a heated committee session in August.

“This is a prime example of why the city of Los Angeles has a tarnished image as a place to do business,” said chamber representative Katherine J. Hayes.

The battle is in one sense a local variation on a debate being played out in an increasing number of cities across the country. It is part of a fiercely contested, labor union-backed movement to boost pay and benefits for custodians, food service and clerical workers, security guards, parking attendants and others among the lowest-paid employees in America.

Chicago, Denver and Boston are among the cities debating living wage measures. New York City last month enacted such an ordinance when its City Council overrode Mayor Rudolph Giuliani’s veto of a measure requiring some city contractors to double their minimum-wage paychecks. Baltimore, Milwaukee, Portland, Ore., and San Jose already have their own versions of living wage ordinances on the books.

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In Los Angeles, the living wage debate is shaping up as another battle in the long war over contracting between Riordan and the council.

Riordan was elected nearly four years ago on what he saw as a mandate to turn around the city’s sagging economy by creating a more hospitable business climate. He also promised a less costly, more efficient municipal government, and he planned to achieve that in part by cutting the city payroll and turning more services over to private contractors, arguing they could do many jobs cheaper and better.

Council liberals, backed by the city’s influential municipal labor unions, thwarted many of the mayor’s contracting initiatives. They said they wanted to be sure that city savings didn’t come at the expense of workers or result in drops in quality from corner-cutting contractors. Mayoral proposals ranging from selling the Central Library to contracting for parking-ticket writers and trash collectors fell by the wayside.

The clash escalated late last year when Goldberg’s committee pushed through a “service worker retention ordinance,” requiring that whenever a city contract changes hands, the new firm must keep the old one’s employees on the job unless their work proves unsatisfactory.

Riordan angered many in the business community when he refused to veto the worker retention measure even though he roundly criticized it. Still reeling from the recent 15-0 council override of his veto of an unrelated measure, Riordan let the contract worker ordinance go on the books without his signature. The city attorney’s office is clarifying which workers and departments are covered by the ordinance, and only recently got authorization to hire a small staff to administer it.

The mayor’s office and the business community are trying to ensure their voices are heard sooner this time around, in part by showing up at the committee meetings. In addition, Riordan’s office recently hosted a meeting of about three dozen entrepreneurs to discuss Goldberg’s proposal. Staffers handed out a questionnaire soliciting the business people’s concerns and ideas for strategies to help shape the debate.

The Chamber of Commerce plans to hire a consultant to mount a campaign to alert the public and council members to business concerns about such a measure, chamber President Ray Remy said last week.

Ordinance proponents, however, have been at work for months, digging up research and bringing labor leaders and low-wage workers to committee hearings to talk about life at the bottom of the economic ladder.

“We are in the midst of a terrible crisis related to low-wage poverty,” said Madeline Janis-Aparicio a leader in the Living Wage Coalition, citing census data showing nearly 40% of minimum-wage workers live below the federally defined poverty line. (In Los Angeles, that is $15,600 a year for a family of four.)

“Many of these workers don’t receive even the most basic kinds of benefits,” Janis-Aparicio said, citing a study that found that the average minimum-wage worker draws more than $8,000 a year in public health care, food stamps and other assistance. Instead of costing taxpayers, she contends, living wage measures would benefit them.

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The library custodian, who used an assumed name for fear of losing his job when he testified before Goldberg’s committee, said he never takes a holiday because he can’t afford to give up any pay. He hurt his back recently but went to work anyway, fearing he would be fired if he called in sick.

“One of the men I work with helped me,” the man said. “He did his work and some of mine so I wouldn’t have to lift anything, and my bosses didn’t know.”

Unlike many low paid workers, however, the custodian doesn’t use the public health care system. “I just don’t go to the doctor,” he said. To afford the medicines needed by his diabetic wife and epileptic daughter, the family buys cheaper generic versions available in Tijuana, he said.

Management of the employer could not be reached for comment.

To bolster arguments for the proposed ordinance, the coalition cites two recent studies. One, by UC Riverside economist and living wage advocate Robert Pollin, concluded that a Los Angeles measure would have an impact of less than 1% on the total volume of most affected businesses. The other, an analysis of Baltimore’s year-old ordinance requiring a minimum wage of $6 an hour, concluded that the law has had “no measurable economic and fiscal costs on the city.” The study was done by the Washington-based Preamble Center for Public Policy.

Opponents cite an earlier survey predicting a serious negative impact on Chicago if a measure under consideration there were to pass--over opposition from Mayor Richard Daley and business leaders.

Businesswoman Rebecca Barrantes doesn’t need a study to analyze what a living wage ordinance could mean for her own public affairs and communications firm.

“This would affect small businesses most of all, and those are the ones that are doing a lot of the innovations, that are really on the cutting edge” of new ways to deliver services, Barrantes said. Smaller companies do not have the flexibility afforded larger ones that can more easily shift workers around or absorb costs, she added.

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She pays her single permanent employee--an office manager--benefits and wages well above what is being proposed in Los Angeles, but said such an ordinance could make it impossible for her to expand her government-consulting business.

Goldberg said she wants to address as many such concerns as possible. But she believes she has the votes to get a living wage ordinance on the books, and she makes clear her unwillingness to delay a decision much longer.

“If it is OK for the city to help those at the wealthiest end of the spectrum, then why isn’t it also OK to help those at the very bottom?” Goldberg asked.

She cited a package of tax breaks and financial incentives granted earlier this year to entice a trio of entertainment moguls to build their Dreamworks project within city limits. And she referred to an upcoming City Council vote on a taxpayer-subsidized proposal for a professional sports arena complex at the Los Angeles Convention Center.

“I was around when we tried trickle-down,” added Goldberg, referring to the Reagan administration’s plan to boost economic prospects for all Americans by giving tax breaks and other measures aimed at helping corporations make investments that would spread throughout the economic spectrum.

“I didn’t see very much trickling. So now I’m ready to try trickle-up.”