Free Lunch

By Michael Gruning

That long sought after and until now quite elusive concept has finally been realized in -- you guessed it -- Quixotic Santa Monica, where one can live in a $3,000/month apartment for $700 and be paid 50 percent more per hour than the state mandates, all due to the largesse of our city fathers.

They recently decreed that you and I will be subsidizing workers so that they will have a chance for that almost unattainable dream -- living in Santa Monica.

When the Santa Monica City Council recently passed an $11.50/hr. minimum wage for workers of contractors who do $50,000 in business with the city, Council member Kevin Mc Keown used this rationale “Either taxpayers pay, or taxpayers subsidize.”

This is a specious argument. He contends that since $11.50/hr ($25,000/yr) is the amount (neutral point) below which a family of four qualifies for food stamps, therefore, we must pay an entry level worker $25,000/yr.

First of all, how can he divine that these workers, most of whom are parking lot attendants and groundskeepers, have families of four, or three, or even two? What if most of them are single?

Second of all, why should I and my fellow Santa Monica taxpaying residents subsidize people who haven’t shown the fiscal discipline to wait until they can afford to have a family, to have one?

Third of all, if some of these workers do have a family of three or four, why would we assume that their spouses/partners aren’t also gainfully employed?

Lastly, instead of spending money on this “minimum wage” boondoggle which still would not enable these workers to live in Santa Monica (Councilmember Pam O’Connor noted that it takes an income of $50,000 to afford to live in Santa Monica), why not use the extra money to set up training programs so that these workers could rise up the economic ladder and not be forever relegated to “entry level jobs” which by definition should pay entry level salaries?

Incidentally, 80 percent of these workers don’t live in Santa Monica, and by the way, where is it written that it is one’s innate birthright to live and work in Santa Monica? Most people in L. A. County commute over an hour each way to work. That’s reality. Even as a Santa Monica business owner and eye doctor, I wasn’t able to purchase a small condo until six years ago and that was with the help of my hard working fiancé.

Councilman Bob Holbrook, the soul of common sense and reason, rhetorically asked his fellow council-members “Why would we ask our taxpayers to potentially spend 15 percent more for the same work as other cities pay?”

The current state minimum wage is $6.75/hr and L.A. County’s minimum wage, for the same type of contractors, is $9.46/hr. At $11.50/hr we would be the highest in L.A. County. Why? Mr. Mc Keown’s response was: “We’re not asking taxpayers to pay more, we’re asking contractors to pay more” and “Historically contractors don’t pass on the added costs, they simply become more competitive.”

Really? If that’s the case, and contractors can always become more competitive, then aren’t we paying too much now? Business 101 dictates that if an employer’s costs rise, then either service/products suffer or he charges more. Mr. Mc Keown’s alleged logic flies in the face of common sense, but then again I don’t think Kevin has ever had to make a payroll.

If, as we are so often told, we live in an era of ongoing budget crises, then why would we spend the extra $500,000 to $3,000,000 that city staff has said it would cost annually, with no increased benefit in services delivered? Do any of us when shopping look for the highest priced goods or service if quality is comparable? I don’t think so.

Even Bobby Shriver’s contention that it would be simple enough to do an analysis of costs at the end of the first year, I find perplexing. Why follow a business model where you opt to throw money at a non-existent problem without a clear and precise understanding of what the probable costs are? So we spend the money first and then see if we can afford it?

This entire exercise is a red herring -- it is actually creeping incrementalism. It is simply a prelude to the main act of again trying to impose a minimum wage/unionization ultimatum on the non-unionized hotels in Santa Monica. Doesn’t anyone remember that the voters defeated that attempt just two years ago?

It’s about time our council became more fiscally prudent and less socially experimental. After all, they are supposed to be the stewards of our hard earned tax dollars. And about that “Free Lunch” -- what do you suppose it costs each of us every day?

Dr. Michael Gruning is a Santa Monica resident and former Chair of the Chamber of Commerce board.