Economists Endorse Living Wage Law

By Jorge Casuso

Oct. 7 -- In what supporters of the living wage measure on the November ballot view as a major boost to their campaign, more than 100 economists -- some of them prominent -- signed a letter endorsing living wage laws in general and Measure JJ in particular.

Supporters of the ballot referendum, who crafted the letter, said the endorsement by 118 economists shows widespread confidence that the law -- which requires businesses along the coast that gross more than $5 million annually to pay workers at least $10.50 an hour plus benefits -- is economically sound.

The letter -- accompanied by a phone-book-sized study for the City by University of Massachusetts at Amherst economics professor Robert Pollin and two peer reviews -- was sent to respected economists, some of them foreign, who then forwarded the materials to colleagues, campaign officials said.

"We wanted them to study the research," said Danny Feingold, a spokesman for the Los Angeles Alliance for a New Economy, a leading force behind the measure. "We put together a statement and asked the people to review the materials.

"We were shocked" by the number of responses, Feingold said. "We expected 25 to 50 people to sign the letter. I think it's a testament to the work done by Robert Pollin. We sent it to a list of folks who at least had some familiarity with the issue, who sent it on to people, sort of a chain effect."

The letter states: "As economists, we believe that living wage legislation is an important tool for improving the living standards of working Americans… We support Santa Monica's diligent attempt to address the problem of working poverty, and offer our endorsement of the Santa Monica living wage ordinance."

Opponents of the measure contend that much of the letter focuses on the benefits of traditional living wage laws and glosses over the specifics of the Santa Monica law, which is the first municipal wage law in the nation that covers businesses with no direct financial ties to the City.

According to the endorsement letter: "More than 80 cities and counties throughout the country have now passed living wage legislation. These laws are a response to the widespread reality of stagnant or declining wages, which have left millions of working Americans -- many of them holding one or more full-time jobs -- unable to afford basic necessities for themselves and their families."

Tom Larmore, a Chamber of Commerce spokesman against the measure, said the letter gives a false sense of what is a highly controversial issue.

"What this is is an endorsement of living wage laws and not Santa Monica's law," Larmore said. "That certainly is not controversial. It seems these folks haven't read Santa Monica's law or Pollin's study. So it's pretty much irrelevant."

Feingold counters that the letter states in the opening line that the proposed measure "sets a minimum wage of $10.50 with benefits for workers concentrated in the city's tourism industry."

"Clearly the letter referred specifically to the Santa Monica Living wage and to the primary findings of the Pollin study," he said. "That is central to the letter."

Gary Dymski, an economics professor at UC Riverside, said that he read the Pollin report before signing the letter. (Pollin's study found that the living wage ordinance would help lift low-wage workers out of poverty and that affected businesses, primarily luxury beach hotels, could readily afford to pay the higher wage.)

"People had a chance to read Bob's work," Dymski said. "It wasn't a blind sign. The clinching argument was that in an area that has an inherently higher cost of living, it makes sense to make accommodations. It's worth trying. It doesn't seem it had much of an impact in the overall terms of business."

University of Illinois Chicago Professor Ron Baiman touted the pioneering measure. "I believe that the Santa Monica ordinance is a pace-setting piece of local economic development policy that will provide substantial benefits to low-wage workers in the covered hotels without harming the Santa Monica economy."

Among the prominent economists who signed the letter were 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.