SPECIAL REPORT * Study of ‘living wage’ ordinance finds that only 750 of about 5,000 covered workers have gotten raises in 15 months. It offers a lesson in . . .How Bureaucratic Loops Can Leave a Law in Knots

Los Angeles City Council members may have thought they were making a groundbreaking social statement last year when they passed a “living wage” law, making city contractors pay their workers $8.50 an hour in wages and benefits.

But a report commissioned by the City Council and an interview with the laws’ leading proponent suggest that they have also wound up making a statement about the difficulty of forcing change:

It’s one thing to pass a law; quite another to get it enforced.

Fifteen months after the living wage law took effect, the city bureaucracy has frustrated enforcement through a combination of sloth, resistance and caution, with the result that only 750 of about 5,000 covered workers have received raises, the report suggested.

“If implementation were running ideally, probably 2,000 to 2,500 workers would have received wage increases by now [as contracts were renewed],” the report said.

Los Angeles City Councilwoman Jackie Goldberg, who steered the legislation through the council and past a mayoral veto, is now engaged in trench warfare over its implementation.

“I am disappointed,” she said. “I am dismayed at how slow it is.”

But, taking the attitude of a general involved in a long campaign, she added: “Am I surprised? Not particularly. And will I accept defeat? Of course not.”

Goldberg got the agency primarily responsible for enforcement, the city’s Bureau of Contract Administration, to agree in early summer to share certain of its documents, including an enforcement timetable, with her office. But the agency did not produce the documents and failed to meet any of the goals in its own timetable, according to the late August report by UCLA law professor Richard H. Sander and law student Sean Lokey.

The same agency has been “remarkably passive” in its approach to enforcement, Sander and Lokey found. “It tends to focus on irrelevant details rather than big problems. It is more likely to investigate or follow up on a case where paperwork is imperfect rather than those cases where a firm or department is not being responsive at all. It is more likely to audit a small firm which has attempted to cooperate, but has no low-wage employees, than a big firm that has totally ignored the living wage ordinance.”

Without making any attempt to communicate its reasoning, the bureau also has determined that hundreds of contracts--most of those it has reviewed--are not even covered by the ordinance. Sanders and Lokey said they believe the main reason for these exemptions has been an invalid concern, raised by the city attorney’s office long ago but never formally resolved, that federal rules may preempt the local law from applying to contracts in which federal funds are involved. These rules require that contracts involving federal funds generally be let as cheaply as possible.

“The city attorney’s office took responsibility for resolving this issue,” Sander and Lokey wrote, recounting that they inquired about it from time to time over the course of the last year. They said they were repeatedly told that the city attorney’s office had contacted the appropriate federal officials, who still were trying to come to a decision.

Losing patience, the pair said, “we decided to explore this issue ourselves. We contacted federal authorities in the Department of Labor and finally reached the person with jurisdiction over this question.” They said federal officials told them that the federal rules did not preempt or otherwise conflict with the living wage ordinance. “We do not understand, therefore, why the city attorney’s office has been so slow,” they said.

Hahn Defends Himself, Blames U.S. Inaction

City Atty. James K. Hahn derided the report writers for asking what he suggested was the wrong technical question of the Labor Department.

Hahn said that the Labor Department--which is Los Angeles’ clearinghouse for federal grants--repeatedly balked at providing an answer to the pertinent question, and in midsummer finally decided that it would provide none. Instead, it directed the city to approach each federal agency that issued it a grant.

“It’s frustrating to us,” Hahn said. “We don’t understand why the federal government is making us jump through all these hoops.”

But he said there is no choice but to proceed cautiously. “We want to make sure they’re not going to come after us three years from now in an audit and disallow their costs,” which the city would then have to repay.

Told of Hahn’s comments, Sander replied that the city attorney was making a mountain out of a semantic issue in Sander’s report. “Hahn knows he screwed up completely, and he’s trying to cover his ass. . . . There’s no question the city attorney’s office dropped the ball on this.”

Attempts to get officials of the Bureau of Contract Administration to defend themselves were initially unavailing. Nonetheless, the attempts themselves might shed some light on the depth of the bureaucratic thicket at the city level.

Seeking comment, a reporter first called the agency’s director, C. Bernard Gilpin, who was said by his secretary to be out of the office for an extended period. The secretary suggested an alternative, Bob Hayes, the director of public affairs and the usual media contact for the agency’s umbrella organization, the Department of Public Works.

Hayes said he did not know enough to comment and suggested Ellen Stein, president of the Board of Public Works, who had been briefed by Gilpin. But Stein’s secretary said she was on vacation; perhaps another board member would talk.

Board secretary James Gibson then called back to suggest that a reporter try Gilpin’s underling, Dave T. Peterson. But Peterson would not come to the phone. His secretary said any request for comment would have to be submitted in writing--to Gilpin.

Two days later, Peterson called back, saying that unidentified people “higher on the food chain” had instructed him to talk.

He described Sander’s report as “factually incorrect or totally out of context” and “hogwash.” He said that every requested document had been turned over promptly and that the law was being aggressively enforced as written.

He also said he had “no idea” how Sander “conjured up” the number of 750 workers who have so far received pay raises. Peterson said the real number is at least twice that--although he could not provide an exact figure--and that hundreds of additional workers have benefited from the law’s other provisions requiring paid holidays or medical benefits.

Told of Peterson’s comments, Sander responded: “That’s nonsense. . . . This is an agency that screwed up morally and is trying to defend itself.”

The UCLA law professor’s report was also critical of a number of city departments that contract out for services but have taken an attitude of “benign neglect” toward requiring compliance.

Singled out for praise was the Fire Department and, for criticism, the vast Department of General Services, which has no one person in charge of living wage concerns and where, perhaps as a result, enforcement tends to fall between the cracks.

Goldberg Says She Won’t Give Up Battle

Goldberg, who is City Hall’s biggest defender of public employees, bridled at a suggestion that her difficulties in getting the living wage ordinance enforced have made her a victim of the bureaucracy.

“I don’t feel like a victim of the bureaucracy,” she said. She added that the kind of resistance she has met is not unusual when public or private institutions are asked to accept change. She blamed obstructions on “some particular individuals” who have acted “because they think it will help them out with the mayor or because they don’t believe in” a guaranteed living wage, mandated at $7.25 an hour with specified benefits or $8.50 an hour without.

She declined to name names, saying she had only heard those motives ascribed to some people and had not heard directly from the individuals. She said she also did not believe that Mayor Richard Riordan, who vetoed the ordinance as bad for business, was playing an active role. Nor did she blame the city attorney’s office--headed by her political ally Hahn. “I think they’re just more cautious than I am” on the federal exemption issue, she said.

The bottom line, she said, is that she believes she has the patience and fortitude to see the change through.

“I’m an old process person,” she said. “By the time I leave here [when term limits will force her out] in three years, this will be institutionalized, either with the Bureau of Contract Administration or somewhere else.

“The answer,” she said, “is don’t accept defeat.”