Merchants Denounce Plan to Study Living Wage : Wages: Santa Monica orders report on effects of mandating minimum pay for some. Businesses predict dire results.

A move by Santa Monica officials to study the possible adoption of a so-called living wage ordinance has drawn the ire of beach area business owners who contend that a required boost in minimum wages will harm the city’s booming economy.

At a meeting that drew nearly 300 people, the City Council voted unanimously late Tuesday to commission a legal and economic study of the effects of raising the minimum wage for certain tourist industry jobs. The study, a prelude to the possible adoption of a city ordinance, is expected to be completed in April.

Supporters of the living wage have proposed that all businesses with more than 50 employees in an area along and close to the city’s coastline pay starting wages of no less than $10.69 an hour, which equals about $21,000 a year for full-time workers.

Members of the pro-living wage group Santa Monicans Allied for Responsible Tourism say that most of the targeted businesses in this coastal zone are lucrative hotels and restaurants and that their employees should be able to afford to raise their families in Santa Monica.

Sandie Richards, an activist with the group and the minister of a local church, said the coastal zone has the highest concentration of low-wage workers in the city. “Those people we are seeking to help are already hurting,” Richards said. “It’s time for Santa Monica to get on the living wage bandwagon.”

Many businesses in the zone described the proposal as a misguided experiment in social engineering. During a three-hour public comment period, about 70 people spoke, most opposing the study.

Business owners complained that the wage hike would force them to reduce staffs, to hire only high-skilled workers who speak fluent English and to raise prices on meals, hotel rooms and movie tickets.

“People making $10.69 an hour will be happy at first, but then they’ll realize the work they’re doing is for two or three people,” said Linda Brown, a hotel manager.

Others said they might move their firms out of town and that higher prices in Santa Monica would drive consumers away. “We’ll be instigating the revival of Westwood,” said businessman Mark Harding.

Some council members voiced strong support for a living wage law. “The effect we’re looking for is one that will raise the people on the bottom rung of the economic ladder,” Councilman Richard Bloom said.

Another member suggested that business leaders are overreacting. “I think the fears out there are a bit extreme,” said Councilman Kevin McKeown. The study will examine the impact of such a wage increase on workers, employers and the city. It will also examine what size businesses it should apply to, what region it would encompass and what an appropriate wage would be.