Living Wage Law May Become National Model

On May 22, while most of the nation slept, history was being made in Santa Monica. The Southern California beach town, renowned for its progressive politics and its picture-perfect sunsets, became the first city in the country to apply living wage requirements to private businesses that have no direct financial relationship with municipal government.

In so doing, the Santa Monica City Council may have changed the terms of debate in what has become one of the most important social movements of our time. With their 5-1 vote following four hours of public testimony, the council majority created a new model for lifting workers out of poverty -- one that has big business mobilizing legions of corporate attorneys and activists thinking about the next generation of living wage legislation.

Beginning July 1, 2002, some 2,000 workers in Santa Monica's tourism district will be guaranteed a wage of no less than $10.50 an hour. Those without employer-provided health insurance will receive an additional $1.75 an hour, increasing to $2.50 the following year. Workers who assert their rights under the law will also be protected from retaliation by employers.

But it is the expansion of the living wage concept that has business opponents up in arms. Until now, the 60 living wage measures passed in the U.S. have applied only to city contractors, lessees or financial assistance recipients. The Santa Monica law will cover not only city contractors, but also businesses with gross revenues of $5 million or more in the city's Coastal Zone -- a booming tourism mecca where workers toil for poverty wages in luxury hotels, chain retail outlets and high-end restaurants.

Until ten years ago, this area was little more than a sleepy backwater. But the city embarked on an ambitious revitalization campaign in hopes of developing a more viable tourist economy. With the help of $170 million in taxpayer investment, the effort succeeded wildly, turning Santa Monica into one of the nation's most lucrative seaside resort towns. Tourism now generates three quarters of a billion dollars every year, thanks in large part to renovation of the Pacific Pier amusement park, the beaches and other tourist attractions.

Trouble is, despite the phenomenal growth of the tourism industry, there has been no trickle-down effect for the thousands of service-sector workers in the Coastal Zone. Indeed, a study commissioned by the city last year found that the majority of low-wage Coastal Zone workers are living in conditions of poverty or near poverty. Most are eligible for some form of government anti-poverty assistance, despite working full time.

By contrast, the study reported that beach hotels-the largest employers in the Coastal Zone -- doubled their revenues over a six-year period. Room rates increased an average of 10 percent a year during this span, with the most exclusive hotels charging anywhere from $300 to $1800 a night.

It was these establishments which last year masterminded one of the most devious political campaigns in recent memory. Hoping to derail the living wage campaign, they concocted a misleading ballot initiative that purported to be a living wage measure. In fact, Measure KK would have provided raises for some 70 workers, while permanently preventing the City Council from enacting any living wage legislation for low-wage tourism workers.

The hotels spent $1 million on their initiative, showering voters with glossy mailers and full-page add touting the benefits of Measure KK. They even hired the Dolphin Group, a right-wing PR firm that created the infamous Willie Horton ads.

But it was all to no avail. On Election Day, voters trounced Measure KK by a margin of 79 to 21 percent. The defeat was the result of a massive grassroots campaign on the part of a broad-based coalition of community activists, religious leaders, labor unions, students, academics and elected officials. It was a stunning rebuke to big-money politics in general, and specifically to the ill-conceived machinations of Santa Monica's most powerful business interests.

Now, six months later, the City Council has finished the job. Business opponents are already threatening legal action, even though experts such as USC constitutional scholar Erwin Chemerinsky have concluded that the law will almost certainly survive any court challenge. There is also talk of a referendum, despite the lopsided failure of Measure KK.

But even as the fight goes on, activists are looking beyond Santa Monica. Popular support among Americans for living wage legislation seems to grow stronger every year. In addition to the 60 laws on the books, another 80 have been proposed. The idea seems to defy ideology, with conservative areas like Ventura County, California, joining liberal strongholds such as Boston and San Francisco.

The reason for the popularity of living wage laws is simple enough: an epidemic of working poverty that neither business nor national leaders seem interested in addressing. Even amidst the economic boom of the '90s, millions of full-time workers were losing ground. In Los Angeles County, for example, the number of working poor rose from 36 to 43 percent of the population between 1990 and 1999 -- a staggering situation that only figures to worsen with the economic downturn.

Living wage laws offer one response to this economic undertow. But for all their appeal, they reach only a fraction of poor workers. Santa Monica's Coastal Zone living wage law opens the door to a much broader kind of legislation that could bring tens of thousands of workers out of poverty in cities across the country. The most likely candidates for future campaigns are tourism-oriented cities where a substantial investment of taxpayer dollars has generated a booming economy supported by a low-wage workforce. But the concept could also be applied anywhere public funds are directly or indirectly subsidizing business.

Such subsidies raise an important question -- should taxpayers be underwriting the creation of poverty-level jobs? Judging from the ever-increasing momentum of the living wage movement, most Americans believe the answer is no. Perhaps Santa Monica's living wage victory will serve as a wake-up call that it's time we pull the plug on working poverty.

Vivian Rothstein is the director of Santa Monicans Allied for Responsible Tourism (S.M.A.R.T.) and the coordinator of clergy and community organizing for the Hotel Employees and Restaurant Employees union in Los Angeles.

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