JJ Supporters Propagate Myths to Secure Passage

By Tom Larmore

Todd Flora's piece ("Living Wage Tests The Character Of Our City," Oct.4) in support of the City's Minimum Wage Ordinance -- now Proposition JJ -- repeated many of the emotional myths made by others, and which we can expect to hear again. Let's take them one at a time:

Myth No. 1. The City has poured millions of tax dollars into the Coastal Zone in order to create a profitable environment for businesses, including the pier, the beaches and the Promenade. The facts are:

- The Promenade and its parking structures have been, and are being, paid for by property owners and businesses in the area, not the City. Bonds were sold to raise funds and these are paid for through assessments against property owners.

- Other public improvements were paid for by state and federal grants, not City tax dollars.

- The economic study Mr. Flora cites as so authoritative concluded that the amount of public funds spent in the Coastal Zone was consistent with the amount of public investment elsewhere in the City - there was no disproportionate benefit to the Coastal Zone.

- The investments were made in order to create an environment in which substantial tax revenues could be raised through the bed tax, sales tax and utility user tax, all of which has been incredibly successful. Any notion that the City has subsidized Coastal Zone business is exactly backwards - these businesses have generated millions of dollars of otherwise unavailable tax revenues that enable the City to award grants to social service agencies, contribute to local schools and make other expenditures that benefit all of us who live here.

Myth No. 2. The "big hotels" pay wages that are below those required by the law. This is simply false, unless Mr. Flora is referring to the two unionized hotels. As I have set forth in considerable detail in a prior column, the wage scale at, for example Casa del Mar, is consistently above the law's requirements for all worker categories, except bellmen, restaurant wait staff and bartenders, all of whom are expected to, and do, make substantial income from tips. In contrast, wage scales at the Viceroy, the most recently unionized hotel, are, in many cases of non-tipped workers, below the level required by the law. However, because of the union exemption in the law, those workers will not benefit if JJ is approved. In fact, the collective bargaining agreement specifically provides that the union will not use JJ as a basis for claiming that the Viceroy workers are underpaid.

Myth No. 3. Only companies with $5 million or more in gross receipts are affected. This statement ignores several realities:

- The employer which will be most affected will be the City itself. Not only is it the largest employer, it also has a substantial payroll of part-time and "as needed" employees who are paid less than the law requires and wil absorb the greatest increase in wages. This aspect of the law alone will divert millions of dollars away from other important social service areas, not to mention the effects of substantial enforcement costs, decreased tax revenues and other costs. The City Manager has estimated that, if adopted, the law will cost the City around $2.5 to $3 million dollars in the first full year of operation. Where will this money come from, particularly at a time when the City's budget is down over $8 million already due to the economy?

- Because every employer, no matter the size, which enters into a contract to provide services to the City is covered, all non-profits which receive City grants for performing social services to the elderly, low-income, battered women and others less fortunate in our society will be required to comply. No one knows how much this will cost.

- The law covers employees of some firms while ignoring those of others. Why should, for example, employees of The Gap on the Promenade be entitled to a pay increase while those at The Gap store on Wilshire not be? Why are library employees covered but not those at the adjacent YMCA?

Myth No. 4. JJ is "a proven method of lifting low-wage workers out of poverty . . ." This statement is simply false. No other city or county has ever adopted a measure such as JJ with its 80% + increase in the minimum wage and application to private businesses. Virtually every economist of all political stripes, including Robert Reich, former Secretary of Labor in the Clinton administration, and Dr. Alan Blinder, economic consultant to Vice President Gore during the 2000 campaign, warns against substantial increases in the minimum wage because of the effects on unskilled workers.

Using emotional and irrational arguments like those spouted by Mr. Flora, Santa Monica voters are being asked to approve a law which discriminates between employees based upon who they work for, virtually ignores the plight of low-wage Santa Monica residents since very few work for the affected employers, risks eliminating entry-level and part-time jobs for Santa Monica's youth, places a new and substantial burden on City tax dollars and excludes unionized workers from its benefits.

As I have said many times and in many other places, the struggles of low-wage workers in our society is a real one and deserves to be, indeed must be, addressed. JJ, howver, is the product of a small, insular group dominated by union interests to the exclusion of the community as a whole. We can, and should, do better.