Riordan Seeks Limits to ‘Living Wage’ Plan

With a hotly contested “living wage” proposal heading for a crucial test in the Los Angeles City Council this week, Mayor Richard Riordan is pushing amendments that would sharply curtail the proposal’s reach.

The mayor has told several lawmakers and union leaders that he wants exemptions for the so-called proprietary departments--airports, harbor, and water and power--and private firms that receive city financial aid. Otherwise, he has warned that he will veto the measure that is aimed at improving pay and benefits of low-rung workers at firms with city contracts or subsidies.

In the past, the mayor had said he would veto any form of the proposed legislation. So his recent statements represent a significant shift.

Riordan detailed his new position last week to labor union leaders during a closed-door session that culminated with his narrowly winning the endorsement of the influential Los Angeles County Federation of Labor, AFL-CIO. That was a political coup for the business-oriented Republican mayor, who is being challenged by liberal state Sen. Tom Hayden (D-Los Angeles).

Still, Riordan’s stance has raised concerns among living-wage law proponents, including several member unions of the labor federation. They do not want to see the measure watered down and believe they have the 10 council votes to veto-proof it.

A coalition of business leaders aligned with Riordan is entering the final stretch of a lobbying blitz against the current proposal. At the same time, proponents of the measure learned late last week that they are not as close as they had hoped to a final council resolution of the issue.

Councilwoman Jackie Goldberg, the measure’s main architect, had wanted to offer her colleagues a final version of the ordinance that has undergone months of public hearings, analysis and revisions in the council’s personnel committee, which she heads. Instead, the issue is set on the agenda in a way that enables the proposal to win conceptual approval while giving opponents more time to press their case.

“There are lots of alternatives floating around, lots of talk about compromises,” one top council aide said Friday.

As now written, the ordinance would apply to firms holding city service contracts worth more than $25,000 and lasting at least three months and to those that get substantial city financial help--more than $100,000 over a year’s time or more than $1 million in onetime aid during a five-year period.

It would require these firms to pay their service employees--such as janitors, security guards, parking attendants and nonprofessional health care workers--at least $7.25 an hour with benefits that include 12 paid days off a year and health care, or $8.50 an hour without these benefits.

City officials estimate that the plan would increase the wages of about 3,800 workers and improve benefits for about 4,800. Figures were not available on how many would benefit if the mayor’s exemptions are passed.

The mayor’s office wants companies that receive city taxpayer subsidies dropped from the ordinance altogether, saying it is important not to undermine city efforts to lure companies, jobs and new tax revenues to Los Angeles. Gary Mendoza, deputy mayor for economic development, said he has talked with several council members about sponsoring amendments to eliminate the financial aid part of the ordinance.

Such a change could be a tough sell because of some of the wealthy companies slated for city subsidies. Councilwoman Rita Walters has said she would take a dim view of excluding owners of a planned sports arena downtown. It is unclear, however, whether the sports arena, to which the city is tentatively committed to provide about $70 million in bonds, would come under the living wage ordinance even if the financial aid provision stays in.

Goldberg might have a tougher fight in trying to keep the proprietary departments in the ordinance.

On Friday, Councilman Marvin Braude introduced a motion calling for exempting them. Goldberg has insisted on keeping these departments in the ordinance, taking strong exception to a city attorney’s opinion that the city charter gives them the authority to control their own financial affairs, including contract awards.

Goldberg, however, has been citing a 1991 voter-approved charter amendment giving the council authority to overturn contracts and other actions of the citizen commissions that head the departments.

She noted that it was the layoffs of food service workers at Los Angeles International Airport when contracts changed hands two years ago that sparked her efforts to protect workers of private employers that perform services for the city.

“They’re what started this,” Goldberg said. “It’s important that they be included.”

Proponents of the ordinance, led by a Living Wage Coalition of labor unions, clergy and community activists engaged in similar campaigns across the nation, say the ordinance would help lift low-wage workers out of poverty. Then, supporters say, those workers could better contribute to society and would be less dependent on public health care and other social services.

Opponents, including a broad spectrum of business leaders recently organized by the Los Angeles Area Chamber of Commerce, argue that it is a well-intended but misguided effort that would drive up costs, eliminate jobs and--most significantly--undercut the city’s efforts to attract businesses.