The living wage ordinance requires businesses who have contracts with the city worth more than $15,000 to pay their employees between $15.45 an hour and $12.14 an hour. The hourly amount varies depending on whether the company offers health benefits. The state’s minimum wage is $8 an hour.
The council passed the ordinance in 2005, at a time when the panel was decidedly more liberal.
The current council, however, is more conservative, with three members who openly oppose the living wage.
And with Das Williams, a longtime supporter of the living wage, leaving the council in the next few days to be sworn in as the 35th District State Assemblyman, the conservative members of the council could look to repeal the ordinance altogether in the coming year.
“The living wage is another one of these things where we have bureaucrats trying to fix the world and the world is a complicated place,” said councilman Dale Francisco. “This just strikes me to some extent as a solution in search of a problem. In general people have to look very closely at wage and price controls. They don’t have a great record. That strikes me as basic economics.”
The ordinance has been in place since the summer of 2006.
Today’s meeting will center on the Living Wage Advisory Committee’s recommendations to expand the ordinance. Among the proposals on the table include requiring all companies who do business with the city to pay the living wage, even if their contracts are less than $15,000.
In addition, the committee would like the city to expand the ordinance to cover more than 700 part-time, hourly employees, who are currently not covered by the ordinance, at an annual cost of $1.1 million.
Living wage ordinance opponents say that requiring city contractors to pay employees a higher salary is an artificial interference in the free market. They say it ultimately hurts those most in need because employers essentially choose to lay off workers rather than pay them more.
“I certainly understand that it is expensive to live in Santa Barbara,” said Steve Cushman, president of the Santa Barbara Region Chamber of Commerce. “I get all of that. But these programs are so difficult to manage and administer that the bottom line for me is that they cause more harm than they do good.”
Cushman said that if the city pays its part-time, hourly employees a living wage, that managers with budgets will simply hire fewer workers.
“If they go after the part-time seasonal employees, primarily in the parking and the recreational divisions, my response is that the departments will automate the parking lots and those people will all be out of jobs,” Cushman said.
Cushman served one term on the committee, he said, but stopped going because he felt frustrated because nothing was getting accomplished.
“I understand that politically it felt good to do it, and unions wanted it, but it is a huge administrative burden to staff,” Cushman said.
Councilman Frank Hotchkiss also opposes the living wage ordinance and the recommendations from the committee.
“I am not a living wage guy in the first place,” Hotchkiss said. “We are asking everybody to take a cut and tighten their belts and we ought to do that here.”
Hotchkiss noted the recent flap over the police union negotiations.
“The backbone of a city has got to be public safety and we ask those guys to take a pretty sizable cut and now we are going to turn around and say ‘we give you more.’ I don’t think that flies,” Hotchkiss said.
Hotchkiss, a Realtor, said a living wage just interferes with the market.
“If you pay some people more there are going to be less people doing the work or the costs will just be passed on and I think that just depresses the economy,” Hotchkiss said.
But Richard Flacks, a member of the committee, described the proposed changes to the ordinance as “housekeeping.”
He said it was important to drop the $15,000 threshold for city contractors because companies bidding on smaller contracts were having an unfair advantage over companies that had exceeded the $15,000 limit.
Flacks also said the city shouldn’t have a double standard when it comes to paying its own workers, even if they are part-time, hourly employees.
“There are certain kinds of people who work for the city who are not getting the living wage,” Flacks said. “They might be parking attendants, temporary or part-time. We want the city to have the same practices that it requires of private companies.”
Weighing in on the living wage ordinance for the final time today will be Williams, who will be sworn into state office on Dec. 6.
Williams said the critics of the ordinance either don’t understand economics or are turning a blind eye.
He said the sky-is-falling hysteria displayed by some people when the ordinance was originally passed was unfounded based on the data.
According to the city, the number of workers who benefited from the ordinance in the fiscal year 2010 were 83, at a cost to the city of $171,725.
“The report, and the work of the committee, shows that the dire predictions of huge costs associated with the living wage was overblown and exaggerated,” Williams said. “The living wage has cost very little and we have been able to live up to our values and make sure that our tax dollars do not let people stay in poverty. I don’t think any taxpayer in Santa Barbara wants the city to pay someone who pays poverty level wages.”
Williams said he has heard rumblings about an effort to repeal the ordinance. He has faith that the council will stand its ground.
“If we allow city contractors to pay under a poverty level wage, then taxpayers just have to subsidize that company with public assistance,” Williams said. “It is a better idea to require contractors to pay workers a living wage up front, than to pay twice to keep them in poverty. If contractors don’t want to pay a living wage they just don’t have to do work with the city.”