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Initial Statement by Santa Monica Coalition to Protect the Living Wage on Sander Study

The study issued Tuesday by Professor Rick Sander on Santa Monica's living wage law is an alarming example of partisan research.

Sander's bias on this issue is indisputable. Two years ago, he was hired by the luxury hotel industry of Santa Monica to write a study of the proposed living wage ordinance. He was paid $55,000 for his services. His current study was partially funded by the Employment Policies Institute. This conservative Washington, D.C. think tank, which is closely tied to the restaurant industry, is the leading institutional opponent of living wage and minimum wage legislation.

It must also be noted that Sander, whose primary field is law, has never published an article in a major peer-reviewed economics journal. Moreover, he has not made his previous study -- nor this one -- available for peer review.

Sander's major findings are contradicted by the independent city-commissioned study conducted by University of Massachusetts Amherst Professor Robert Pollin and his colleague Professor Mark Brenner. That study concluded that the living wage ordinance would offer significant benefit to working families, and that affected businesses could afford to pay the living wage.

Pollin and Brenner's major findings include the following:

  • The majority of workers covered by the living wage law live in families with incomes that leave them below the Basic Needs threshold developed by the California Budget Project.

  • The living wage law will benefit working families, dramatically reducing eligibility for anti-poverty programs.

  • Hotels in the coastal zone have benefited from City policies and can well afford to pay their employees a living wage. City restrictions on commercial development, including Proposition S's ban on new beachfront hotels, has created a protected market for existing hotels and resulted in significantly increased profits.

  • The city's prosperous coastal tourism industry was created through public investment and policy decisions. More than $180 million in taxpayer dollars has been spent on capital improvements and operating expenses in the coastal zone.

  • Job losses as a result of the ordinance will be minimal. Using extremely pessimistic assumptions, job loss could range from 30 to 186 employees.

The results of the study were affirmed in a peer review by Harvard University Professor Richard Freeman, one of the top labor economists in the world.

Pollin and Brenner have just issued an updated analysis, which affirms their findings.

This week, 120 economists from major universities in the United States as well as Europe, Canada and Mexico endorsed Measure JJ, the Santa Monica living wage ballot referendum. ("Economists Endorse Living Wage Law," Oct. 8)

The signatories included many prominent economists, including University of Texas at Austin Professor James K. Galbraith; Cornell University Professor Lourdes Beneria; Notre Dame Professor Teresa Ghilarducci; Boston College Professor Juliet Schor; UC Berkeley Professor Michael Reich; UC Riverside Professor Keith Griffin; Washington University at St. Louis Professor Steven Fazzari; University of Michigan Professor Thomas Weisskopf; University of California Santa Cruz Professor Manuel Pastor; and Economic Policy Institute President Lawrence Mishel.

In a letter, they stated that "the study by Prof. Robert Pollin and colleagues at the University of Massachusetts-Amherst...offers strong evidence of the law's overall merits."

By contrast, Sander's study is a transparently partisan effort that contributes little to the critical debate about working poverty in our community.

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