Pay Hike Foes Push for Ballot Measure

Opponents of $10.50 minimum hourly pay at Santa Monica’s bigger beach-area businesses said Monday that they will seek a public referendum in May to overturn that so-called living wage ordinance.

That controversial wage hike was approved 5 to 1 last month by the City Council, which is expected to vote for final passage tonight. Members of a new coalition of businesses, property owners and residents opposed to the wage hike will have 30 days to collect enough signatures to put the measure on the ballot.

“People will see us on the street on Wednesday morning,” said Tom Larmore, a local attorney and Chamber of Commerce member who says the group hopes to raise $100,000 for the effort to reverse the wage rules. “We will be asking them for their signature so they can have their constitutional right to vote on this.”

The group, called Fighting Against Irresponsible Regulation, needs to collect signatures from 10%, or about 5,700, of the voters. Then the council must either rescind the wage law or suspend it pending a public ballot.

This is the latest skirmish in a two-year battle pitting labor activists against luxury hotels and other businesses in the city’s beachfront and downtown tourism zones, where about 40 businesses grossing $5 million or more would be subject to the law. It would take effect next summer, and require those businesses to pay up to an additional $2.50 an hour for health care benefits.

Experts say the law is the first of its kind in the nation to focus on businesses that are not holding city contracts or on city land.

Businesses insist that the law is arbitrary and unfairly targets them. Labor and living wage advocates argue that the tourism industry pays substandard wages while profiting from public investments in the area.

“I think it’s really unfortunate that they’ve decided to pump tens of thousands of dollars into this campaign just to avoid paying their workers a living wage,” said Vivian Rothstein, a labor organizer and member of Santa Monicans for Responsible Tourism. That group was instrumental in getting city officials to pass the new wage law.

In November, a hotel-backed campaign spent nearly $1 million to field Proposition KK, which would have mandated an $8.32 minimum hourly wage for about 60 workers at firms on city contracts, while also barring the council from enacting future wage laws. It was defeated by more than 78% of the vote.

“I think that most residents in Santa Monica are supportive of our living wage approach,” said Mayor Michael Feinstein. “If they’re aware what hotels are trying to do with the referendum, they probably won’t sign it.”

But Larmore argues that he is “convinced” that most voters do not support the council’s action.

His group says voters should have a direct say because of the municipal costs expected to implement the ordinance and to defend it from the lawsuits that both sides say are sure to come.

“It will hopefully let the people see the total absurdity of it,” said Jeff King, chairman of Ocean Avenue Seafood Company restaurant. “And if it doesn’t work in a referendum, there’s going to be enough lawsuits.”