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Santa Cruz: Council Majority Deflates Efforts to 'Reconsider' or 'Repeal' Living Wage Ordinance
Daily Sound
Joshua Molina

November 24, 2010
View the Original Article

Despite an effort by Santa Barbara City Councilman Dale Francisco to “reconsider” the city’s living wage, a majority of the council on Tuesday said the ordinance reflects the city’s values.

At the request of the city’s living wage ordinance advisory committee, the council on Tuesday examined the living wage’s progress since it was put into place in 2006.

Francisco and Allen Williams, an owner of a local cleaning service company, both called for the city to reconsider or repeal the ordinance.

“The best direction in the long run is to completely reconsider this idea,” Francisco said.

The councilman said that the city, or “bureaucrats” shouldn’t be intervening into the free market by requiring contractors to pay its workers a so-called living wage.

“The city is interfering in a process that it really doesn’t understand,” Francisco said.

The retired Cisco software engineer said that in the workplace people make more money by taking on more responsibility, not through artificial salary controls.

“That’s the just the way it is,” Francisco said.

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.

Tuesday’s meeting focused on the committee’s recommendation to require 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.

The number of workers who benefited from the ordinance in the fiscal year 2010 was 83, at a cost to the city of $171,725.

Most of the council members on Tuesday agreed that now is not the time to change the living wage ordinance, either enhance it, or scale it back.

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.

Supporters say that private businesses that bid for taxpayer dollars should pay well above poverty wages.

Councilman Das Williams, one of the original supporters of the ordinance when it was approved in 2005, said the city is being fiscally and socially responsible by requiring its contractors to pay a living wage.

At one point Williams countered conservative councilwoman Michael Self, who at one point suggested that the council “suspend” the living wage ordinance. Self said it was an interference with the free market.

Williams pointed out that public, taxpayer-funded contracts have little to do with the free market.

In a free market system, one chooses whom or what to do business with.

Cities, however, must select the lowest responsible bidder for service contracts.

A company that pays its employees low wages can usually bid a low amount for a contract because it doesn’t have the higher personnel costs.

A company that pays its workers higher wages and salary benefits, however, usually has a higher bid price for city contracts, to cover the cost of paying employees more money.

Without requiring a living wage of all contractors companies that pay their employees less money have an unfair competitive advantage over a higher-paying employer, when trying to land taxpayer contracts.

“If we don’t have a living wage ordinance, we tend to punish employers who provide good wages and good benefits,” Williams said.

Williams said the city should not be in the business of subsidizing irresponsible employers who underpay employees – with taxpayer dollars.

“If they don’t want to pay a living wage, they don’t have to bid on city contracts,” Williams said. “Let them go to the free market and see how they do.”