Battle Over Wages Generates Dueling Santa Monica Plans

Call it a battle for the hearts, minds and signatures of Santa Monica voters.

Business owners and labor organizers in the prosperous seaside city are waging an emotional tussle over two vastly different proposals to boost the minimum wage for groups of workers.

Most recently, the conflict has moved to the parking lots and food courts of local supermarkets and retail centers, where petitioners are gathering signatures to put one of the plans on the ballot. If they are successful, the wage struggle will certainly continue into the fall and probably become the top campaign issue for local politicians.

“The pot is boiling,” said Mayor Pro Tem Pamela O’Connor. “This is one of the most hotly debated issues I’ve seen in 10 years.”

The controversy began in September when, at the urging of labor activists, the city began studying a proposal to double the minimum wage for an estimated 3,000 housekeepers, valet drivers, restaurant workers and security guards in the beachfront hotel district. That includes roughly the area between the shore and Lincoln Boulevard. Instead of earning an average of $6.50 to $8 an hour, targeted workers in the district would earn a minimum of $10.69 an hour under the proposal.

Responding to a plan that they viewed as a threat to the city’s economic health, business leaders started a counter-campaign.

Last week, the Santa Monica Chamber of Commerce and other business groups launched a petition drive for a November vote on a measure that would raise wages for government contract workers but also make it much more difficult to impose wage increases on private businesses such as hotels. With the goal of collecting 9,000 signatures before a May deadline, proponents are feverishly circulating petitions.

But labor organizers call that petition measure a sham, and say it is only intended to derail their hotel district plan and to confuse voters. The labor forces hope to kill the business-sponsored initiative before it gets to a vote by dispatching dozens of volunteers to discourage residents from signing it. The foes are even distributing forms that would allow voters to revoke their signatures.

Both sides say that the stakes are high in the growing street campaign, and that total spending on advertising, mailings and petition gathering could reach more than $300,000.

The battle has already attracted outside observers, who say its significance is elevated by the janitors strike in Los Angeles County and Los Angeles’ hosting of the upcoming Democratic National Convention, where labor issues are expected to be important.

“What’s happening in Santa Monica has definitely caught a lot of attention,” said Daniel J.B. Mitchell, a professor at the Anderson Graduate School of Management at UCLA. “There’s a lot of concern now in California and nationally about the gap between high- and low-income workers.”

Business interests in Santa Monica have hired a San Francisco political strategist who has represented big businesses in the Bay Area and was active recently in reelecting San Francisco Mayor Willie Brown against a more liberal opponent.

As the Santa Monica clash continues, some residents say the debate is becoming confusing.

They are faced with competing proposals that both purport to establish a living wage and are confronted with campaigns in which each side accuses the other of distorting the facts.

Longtime resident David Lopez, for one, is baffled. He was trundling a grocery cart from a Lincoln Boulevard supermarket the other day when he was sandwiched between ballot measure petitioners and opponents.

“I don’t know what’s going on here,” Lopez said as he studied a flier that had been thrust into his hand. “I don’t know who to believe.”

As things stand now, the hotel district plan will be reviewed sometime after June by the City Council, which can adopt, reject or alter it. However, council approval could be blocked if the business-backed proposal moves more quickly to qualify for the ballot and then to passage by voters in November. That’s because that proposed government contractor ballot measure would require a citywide vote for all subsequent minimum wage proposals. Labor forces consider that proposed requirement a so-called poison pill and say they fear that business interests would be able to vastly outspend--and thus overpower--them in a general election.

The living wage issue in Santa Monica has been controversial from the start. In September, a group called SMART, for Santa Monicans Allied for Responsible Tourism, asked a receptive City Council to study the prospect of raising wages at beach-area businesses. The council has hired an economics professor to study the feasibility and consequences by the end of June.

The hotel district proposal would affect any business within the coast zone with more than 50 employees and increase starting wages to $10.69 an hour. (Two hotels in the area say their lowest starting wage for employees not eligible for tips already is $10.25.)

The new starting wage would amount to about $22,000 a year, which Stephanie Monroe, director of SMART, described as enough money to raise a family of four without food stamps.

Many businesses have described the proposal as a misguided experiment in social engineering, and say that it would force smaller restaurants and retail centers out of business by doubling their labor expenses. Other businesses would be forced to cut back on employees, particularly unskilled workers and teenagers, to stay under the 50-employee threshold, they say.

“I’d certainly call it catastrophic,” said Karen Bower, president-elect of the Santa Monica Chamber of Commerce.

Another effect of the SMART proposal would be to unfairly create a zone with high prices for food and services because of labor costs, critics say. “Imagine, if you had to pay $14.95 for a hamburger on one side of the street and a regular price on the other, which restaurant do you think will get business?” Bower said.

The business-backed group, the Santa Monicans for a Living Wage Coalition, last month offered a proposal that would apply to all contractors doing business with the city and to companies compensated with government grants. Affected businesses would be required to pay a minimum wage of $8.32 an hour if the employees received benefits, or $9.46 an hour if benefits were not provided. Similar minimum-wage requirements have been adopted by more than 30 cities across the nation, including Los Angeles.

SMART supporters, who otherwise favor a broader version of living wages for government contractors, insist that the business-backed ballot measure is meant to confuse voters and that pro-business campaigners have wrongly appropriated the phrase “living wage.” They say the provision involving city contractors would apply to only 200 employees. (Business leaders say they do not yet know how many employees their proposal would affect, but are studying the matter.)

“What they’re doing is simple deception, a fraud,” said Bill Bronner, a waiter who is a SMART volunteer. “It’s the same as if the tobacco companies offered some anti-tobacco law that actually exempted them from paying damages.”

Casting their fight as one between the haves and have-nots, SMART officials point out that the city businesses have hired San Francisco consultant Mark Mosher to conduct their campaign. Mosher, who has fought some labor-backed initiatives in San Francisco, denied that his Santa Monica campaign is trying to confuse voters. “I think the people of Santa Monica should be given an opportunity to make up their own minds,” he said.