Business Group to Battle ‘Living Wage’ Plan

Led by the usually low-profile Los Angeles Area Chamber of Commerce, a coalition of the city’s business leaders is embarking on a fund-raising and public relations campaign to battle a “living wage” proposal being pushed by City Council liberals.

Leaders of the Coalition to Keep LA Working, which will kick off the campaign at a Trade Technical College news conference this morning, said they want to ensure that the issue is fully aired before the City Council votes on it, possibly next month.

The measure aims to improve wages and add benefits for janitors and other service workers employed by private firms that hold city contracts or receive financial assistance from the city.

The coalition--whose leaders include prominent representatives of small and minority-owned businesses--will face a well-organized campaign that labor, religious and community activist groups have been pressing nationwide.

The measure under consideration in Councilwoman Jackie Goldberg’s Personnel Committee would require firms to pay bottom-rung workers $7.50 an hour with health insurance and other benefits or $9.50 an hour without benefits. The measure would enable minimum-wage employees’ annual incomes to reach the federally defined poverty line ($15,600 for a family of four) and wean them from public assistance rolls and the overburdened public health care system, advocates say.

The business leaders say they do not dispute the measure’s goal of easing poverty. But they say that the ordinance would force employers to eliminate jobs and discourage firms from locating, staying or expanding in Los Angeles. They argue that it would drive up contracting costs for taxpayers, adding about $93 million annually to an already shaky city budget.

They want city officials to at least delay adopting a living wage ordinance until they can assess the impacts of a recent federal minimum wage hike--to $4.75 an hour--and the voter-approved hikes in the state minimum wage to $5.75 by March 1998.

“I deal with the challenges facing small, minority-owned businesses every day,” said Charlie Woo, president of MegaToys and a coalition member. “I am strongly opposed to the living wage ordinance.”

Woo, who plans to participate in today’s news conference, said that growing small and minority-owned businesses would be particularly hard hit by the measure, forcing those with city contracts or receiving government tax credits or grants to cut their work forces or scale back expansion plans.

The new organization’s members include the Mexican American Grocers Assn., the downtown-oriented Central City Assn., the Valley Industry and Commerce Assn., the Greater Los Angeles AfricanAmerican Chamber of Commerce, the Asian Business Assn. and the Chinese Chamber of Commerce.

The area chamber, which normally demurs from aggressive, confrontational stances on issues as divisive as the living wage, has hired an experienced, statewide public affairs communications firm--San Diego-based Nelson Communications Group--and launched a $150,000 fund-raising drive to defeat the measure. Officials said the chamber already has raised $30,000 to $40,000 toward that effort.

The coalition has an ally in Mayor Richard Riordan, a multimillionaire lawyer-entrepreneur whose 1993 campaign included a promise to turn around the city’s recession-torn economy and repair its business-hostile image. Some coalition members--especially the Central City Assn.--mobilized as soon as Goldberg introduced the living wage proposal this year.

The business groups will have their work cut out for them partly because pro-labor liberals dominate the City Council. Living wage measures have been adopted in several places, most notably New York City, where the City Council overrode Mayor Rudolph Giuliani’s veto.

The Living Wage Coalition has been making the rounds of council offices and newspaper editorial boards.

Goldberg late last year persuaded Riordan not to veto another of her measures, the Service Worker Retention Ordinance. That requires that whenever a city contract changes hands, the new contract-holder must keep its predecessor’s employees.

Madeline Janis-Aparicio, a leader of the Living Wage Coalition, said the opponents’ approach is “totally counterproductive.”

“This is drawing a line in the sand instead of working with us to find a way to address the real issue--the very, very deep problem of low-wage poverty in this city,” Janis-Aparicio said.