Who'd Want to Join a Union When You Can Have the Living Wage?

By Tom Larmore

Proponents of the City's new minimum wage law have spent over two years telling us of the importance of an hourly wage of at least $10.69 (plus health benefits). It always seemed odd that the law contained an exemption for unionized businesses -- after all, the exemption would be needed only if the union contract provided for lower wages. Don't union employees deserve to earn the same minimum wage as non-union employees?

The collective bargaining agreement recently entered into by the Pacific Shore Hotel and the Hotel Employees and Restaurant Employees Union, Local 814 is particularly instructive. Despite the hue and cry for a $10.69 minimum wage, the current salaries for many employees are substantially below that level:

• Housekeeping Supervisor: $9.15
• Cook $9.42
• Room Attendant $8.15
• Cashier $7.92
• Houseperson $8.15
• Engineer $10.07
• Laundry Attendant $8.15
• Bartender $7.80
• Stewards $8.15
• Busser $6.75
• Front Desk Supervisor $11.80
• Server $6.58
• Front Desk Agent $10.30
• Bellman $6.83

I assume that the union contract provides for good health benefits. However, if you add the $1.75 that the law permits other employers to add for health benefits, the Pacific Shore wage scale would still be lower than the law will require for other competing hotels. (The law's treatment of health benefits is bizarre. If a company pays less than $1.75 for health benefits, it gets no credit at all; if it pays more than $1.75, it gets credit for only $1.75. Therefore, an employer paying $3.00 per hour will be paying a minimum wage of $13.50. This structure may actually encourage employers to drop health insurance rather than obtain it.)

This disparity will continue to exist if the law becomes effective next July because the Pacific Shore Hotel's wages for non-tipped employees will have risen by only an additional $1.15, thereby leaving most of the employees at least 10 percent below the level required by the law in the absence of the union contract. (And of course, a significant portion of the wages will probably be eaten up through payment of union dues.)

Particularly interesting are the low salaries for tipped employees such as bartenders, bussers, servers and bellmen. Under the City's new minimum wage law, as it applies to non-unionized businesses, there is no "tip credit" so that restaurants and hotels will be forced to pay these employees at least $10.50 plus health benefits while similar employees at Pacific Shores will be earning $3-$4 less per hour.

Even more interesting is how this wage scale compares with the beachfront hotels which have been demonized over the last two years. Compare the current starting wages at Casa del Mar and Shutters on the Beach for the same positions:

• Housekeeping Supervisor $12.91
• Cook $11.02-$13.84
• Room Attendant $10.50
• Cashier $10.76
• Houseperson $10.50
• Engineer $14.35-$24.73
• Laundry Attendant $10.50
• Bartender $10.00
• Stewards $10.50
• Busser $8.20
• Front Desk Supervisor (no position)
• Server $6.25
• Front Desk Agent $12.38
• Bellman $6.25

In all categories other than tipped employees, Casa del Mar and Shutters are currently paying at least as much as the law will require next July, and frequently substantially more, and 20 to 40 percent more than the union employees at Pacific Shore are receiving; the tipped employees schedules are similar.

The next time supporters of the law march from darkness to light, they should start at the Pacific Shore and end at the beach.

Tom Larmore is a spokesman for Fighting Against Irresponsible Regulation (F.A.I.R.), which is sponsoring an initiative to place the City's living wage ordinance on the ballot as a voter referendum.