Living Wage Movement Targets County Government

The living wage movement to pay unskilled workers enough to keep them off the dole is homing in on a fat target, Los Angeles County government, which years ago outsourced thousands of jobs in an effort to save money and wound up with many full-time contract workers paid so little they remain paupers eligible for relief.

These contract workers are employed chiefly in janitorial, food service and parking lot positions that pay more than the $5.75 minimum wage California requires, but less than the $8 or so an hour at which a family of three in Los Angeles County ceases to become eligible for welfare.

They are people such as Alfredo Galindo, who supports four children on a salary of $6.73 per hour cleaning floors at Los Angeles County’s Olive View-UCLA Medical Center, and his colleague, Laura Gonzales, who supports three children on a housekeeper’s wage of $7.52.

Neither receives welfare--Galindo because he is too proud, Gonzales because she was told, evidently in error, that she earns too much. But both make regular use of another form of relief--free medical care for the indigent--prompting advocates of a living wage to charge that the county is creating a false economy by paying such low wages that it later has to supplement them with free care.

Galindo’s and Gonzales’ situation is not unusual in a local economy in which the gap between rich and poor is widening. More than 2 million county residents have no medical insurance. And according to an estimate prepared for The Times by Steven Wallace, a professor of public health at UCLA, 800,000 adults in the county--or one in four of those who work full time--have jobs that pay less than $8 per hour. For his projection, Wallace used data from this year’s U.S. Census Current Population Survey.

Los Angeles’ fledgling living wage movement aims to improve the lot of all such workers. But it has focused its initial efforts on workers such as Galindo and Gonzales, whose fates are tied to local governments over which the politically active unions that back the movement have the most sway.

Advocates have so far won passage of laws in Los Angeles, West Hollywood and Pasadena requiring government service contractors to pay a living wage. They have also won concessions from a major developer that needed local government help for its Hollywood plans. And they are waging a campaign to persuade city and county governments to wrench concessions from Universal Studios in return for the permissions it needs to expand.

At the county level, where some political leaders are still reeling from a brush with bankruptcy at the height of the last recession, the living wage movement has added the fiscally conservative, false-economy twist to its argument that meager wages are an affront to workers’ dignity.

Governments contract out low-wage jobs in part to save money on benefits, the false-economy argument goes. But if the government is the county, which delivers social services, how much is really being saved if it later has to pay benefits in the form of welfare, food stamps and free health care for indigents?

A three-member majority of the Board of Supervisors--Yvonne Brathwaite Burke, Gloria Molina and Zev Yaroslavsky--has embraced this argument. But mindful of strong opposition from organized business interests such as the Los Angeles Area Chamber of Commerce, the board has moved very slowly toward adopting even the modest, back-door approach to a living wage around which a majority has coalesced.

This approach encourages a living wage, rather than mandating one, by giving contractors willing to pay it extra credit when their bids for county work are evaluated.

Credits for Contractors Under Discussion

Burke, Molina and Yaroslavsky have repeatedly voted to authorize the county bureaucracy to investigate this approach, but the investigation has dragged on for more than three years, chiefly in response to concerns voiced by business interests bent on delay.

As part of the investigations, the office of auditor-controller has tried to figure out how much extra credit would be necessary to entice contractors to pay a living wage--calculated as $7.82 an hour with health benefits, or $9.47 without health benefits. The office settled on those amounts as sufficient to “preclude the employees’ need for county assistance.”

(It found that at $7.82 per hour--or $1,354 per month--a full-time worker with two dependents ceases to be eligible for welfare. A nonworker with two dependents receives only $565 per month. But to encourage working, some cash benefits remain available on a sliding scale until a worker reaches the $1,354 level.)

Given the high degree of difficulty the city of Los Angeles has experienced in enforcing its mandatory approach, some living wage advocates wonder whether the county’s contemplated incentive route will get results. “It’s hard enough to get these contractors to comply with the law when it’s a mandate,” said Sharon Delugach, chief of staff to Los Angeles City Councilwoman Jackie Goldberg, a living wage advocate.

But because advocates view the three-member majority on the board as fragile, they realize that an incentive approach is the best they can hope for any time soon. “Things are not going to get any better,” said Madeline Janis-Aparicio, a lawyer who heads the Los Angeles Living Wage Coalition.

Indeed, as they explained their reasons for avoiding a mandatory approach, some of the supervisors who support the incentive plan seemed uncertain--even torn.

Known as a small business advocate and a practical, consensus politician, Burke said she has taken the lead on the living wage because she thinks it will save the county money. But she said she did not have the votes for a stronger, mandatory proposal and did not want to pointlessly spend energy on a fight. She added that someday, if the city’s mandatory approach were found to work, she might back it for the county.

Molina portrayed herself as hamstrung by lawyers. She suggested she might support a mandatory approach if she thought it were lawful, but said she doubted it would be. She hearkened back to her own unsuccessful attempt several years ago to require service contractors to provide health insurance for their workers.

Her proposal died when the county counsel’s office said that mandating health insurance would violate federal law. Although more than a dozen local governments throughout the country have since adopted mandatory pay raise statutes, Molina expressed concern that a legal objection still would be made here. “If we had [the votes to make a living wage] mandatory,” she said, “then I’m sure we would have somebody come in and tell us that wouldn’t be possible.”

Only Yaroslavsky said he would support a mandatory approach “without a doubt . . . I don’t think it’s asking too much of the private sector to do that with the kind of profits that are being made . . . in a city and county where the disparity [between rich and poor] is more pronounced than in any metropolitan area,” he said. But even he seemed to back off later, saying that “if we can get three votes . . . I would be inclined to support it.”

Anita Zusman, the Chamber of Commerce’s vice president for legislative affairs, said her organization believes the supervisors will eventually pass an incentive approach. She said the chamber has focused its efforts on delay and on lobbying to limit the amount of extra credit bidders will get when they promise to pay a living wage.

Businesses’ primary arguments are that living wage laws are bad public relations for the region and that they are particularly hard on small business owners competing for low-bid county contracts against larger concerns that can more easily absorb wage hike costs.

The two more conservative members of the board, Supervisors Don Knabe and Mike Antonovich, have voted against even authorizing studies of the incentive approach and made arguments similar to the chamber’s that it would drive up the cost of doing business in Los Angeles County.

“It’s a job-killing program,” Knabe said.

They also contended that the false-economy argument made by proponents is flawed. They said that county government has to dedicate hundreds of millions of dollars per year for indigent health care to get supplemental funds from the state of California. Reducing poorly paid contract workers’ use of indigent health care services will not, they said, reduce this minimum match amount.

Extent of Possible Savings Unknown

Even viewed from the standpoint that tax money is tax money, regardless of which level of government has to spend it, the extent of possible savings is unclear.

Los Angeles County government is such a sprawling operation that no one in it even knows how many contract workers would be eligible to get raises under a living wage law. In an attempt to find out, county departments surveyed 400 contractors whom they identified as likely to be affected. But fewer than six in 10 replied. Those that did identified about 3,000 employees who earned less than $7.25 per hour in 1997. They also identified about 1,400 instances in which contract employees received no medical benefits.

The experiences of two such employees, Galindo and Gonzales, may be instructive on how much low-wage workers cost governments later in relief.

Galindo would be eligible for supplemental welfare benefits and food stamps, but has not applied.

“I don’t try to get it because I don’t like it,” he said.

Galindo figures he nets about $900 per month; he spends nearly $200 of that to support one child who does not live with him, and another $150 on rent for one bedroom in a two-bedroom apartment his family shares with another in Panorama City.

About once a month, when someone in his family needs medical attention, they visit the emergency room at Olive View-UCLA Medical Center, where he cleans floors.

Sometimes, he said, he cannot afford to pay the bill, which the county estimates at $500 per visit at Olive View.

Gonzales, who has asthma, also cannot afford to pay. She estimated that she is treated free at the Olive View emergency room four times per year.