Santa Monica OKs ‘Living Wage’ Law

The Santa Monica City Council approved a long-debated “living wage” ordinance early Wednesday that would raise the hourly minimum pay to $10.50 for workers at an estimated 40 large businesses in the city’s popular beachfront and downtown districts.

Backers rejoiced over what experts say is a national precedent involving such a municipally approved wage increase for private industry and said the move will help hundreds of workers support their families. But opponents, especially oceanfront hotels, said the fight is not over and pledged a court challenge over the measure’s constitutionality.

The 5-1 vote was cast at 2 a.m. after a seven-hour hearing. But that just capped years of complicated battles of ideology and economic analysis.

“It’s a real huge milestone,” said Madeline Janis-Aparicio, executive director of the Los Angeles Alliance for a New Economy, one of the groups pushing for the living wage. “Oh my goodness, we are ecstatic. We have been working on it for three years.”

Some changes were made during the long night of debate. The biggest one reduced the number of businesses that would have to abide by the ordinance, much of which would go into effect in July 2002. Originally, businesses with annual gross revenues of more than $3 million for two consecutive years would have been included, but that threshold was raised to $5 million. As a result, the estimated number of businesses potentially affected dropped from 72 to about 40, officials said.

“We made moderate compromises that will very significantly improve the lot of low-wage service workers in Santa Monica’s tourism zone while protecting a vibrant business environment,” Councilman Kevin McKeown said.

Voting against the ordinance was Councilman Herb Katz, who blasted it for singling out specific neighborhoods.

“It will end up in court,” Katz said Wednesday, echoing what many predict. “This is totally discriminatory in that it only affects the coastal zone.”

Opponents of the ordinance argue that most of the city’s hotel workers, such as maids, already average about $9.50 an hour. And they say that food servers in high-end hotels make about $500 a week in tips and additional unclaimed income.

The state minimum wage is set to rise 50 cents to $6.75 in January.

“You have government interfering in private enterprise, imposing wages that are way above federal and state standards,” said Holiday Inn manager Bob Buescher.

In addition, the affected businesses also must contribute toward health benefits to the tune of $1.75 per hour; that benefit subsidy would rise to $2.50 the next year. The ordinance also forbids retaliation against workers who blow the whistle on bosses who fail to comply with the law.

Exemptions will be allowed for businesses that have an economic hardship or a work force that consists mainly of minors or seasonal workers. Details for the exemptions will be worked out by a task force in the near future.

Various so-called living wage ordinances exist in about 50 U.S. cities, experts say. But those have mainly been aimed at businesses that rely on government contracts or operate on government-owned land. Santa Monica’s version targets large private businesses that do not have such contracts and that are on private property in specific neighborhoods.

Backers argue that businesses in those neighborhoods have benefited from the city’s tourism promotion and from millions of dollars in tax-funded beach, pier and street renovations.

“It’s the first time that I know of that it’s been applied to workers that aren’t contracted by a city or county,” said Heather Boushey, an economist for the Economic Policy Institute, a Washington-based think tank that has not taken part in the wage debate.

The $10.50 an hour is probably the third- or fourth-highest such municipally set wage in the nation, Boushey added.

Supporters hope to influence other cities.

“I think we have crafted a very innovative ordinance that could have impact throughout the country,” said Vivian Rothstein, a member of Santa Monicans Allied for Responsible Tourism, which supports the wage increase.

The council meeting attracted a large crowd of ordinance supporters and disgruntled businesspeople. But by the time the vote was cast, the crowd had dwindled from hundreds to a few onlookers.

Le Merigot Hotel General Manager Sig Ortloff predicted layoffs will result from the forced higher wage. “I don’t want to be an alarmist, but I might have to let go about 25 people--about 10% of my work force,” he said.

Although living wage supporters got most of what they wanted, some argued that $10.69 should have been the wage floor.

Among those attending the meeting Wednesday morning was Elva Hernandez. After 11 years working at the Doubletree Hotel, she makes $12 an hour but supports the new wage for the housekeepers she supervises, and because she said there are no health benefits.

“At my workplace they do not pay very well and things are expensive, like rent, food and health insurance,” she said.