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The American Dream is Impossible for Low-Wage Earners in Santa Cruz
Santa Cruz Patch
Niko Kyriakou

March 15, 2011
View the Original Article

Not only are Santa Cruz workers not always getting minimum wage, but even those who are being paid fairly can barely afford to live here.

These are the results of several area studies that looked at low wage earners.

The 10-county United Way 2009 report, “Struggling to Make Ends Meet,” showed that while most Bay Area folk work, they aren't paid enough to pay our area's high costs of living.

Parents earning the California minimum wage make about $30,000 a year—yet the cost of basic needs in Santa Cruz is an impossible $54,590 a year, the report found.

A vast majority—some 86 percent of all Bay Area households with incomes below the Self-Sufficiency Standard (a comprehensive, localized measure of living costs) had at least one worker, the report found. Santa Cruz is the fourth most expensive county in which to live in the Bay Area, behind San Mateo, Marin and Santa Clara and ahead of San Francisco.

In Santa Cruz County, one minimum-wage worker must work 159 hours per week, 52 weeks per year to afford a two-bedroom apartment at fair market rent, or four workers at full time, according to a 2010 report by the National Low Income Housing Commission.

Also in the county, the average wage for a renter is $12.97 an hour. In order to afford the fair market rent for a two-bedroom apartment at this wage, a renter must work 98 hours per week, 52 weeks per year.

Or, working 40 hours per week year-round, a household must include 2.5 workers earning the mean renter wage in order to make the two-bedroom affordable.

Monthly Supplemental Security Income (SSI) payments for an individual are $907 in Santa Cruz County. If SSI represents an individual's sole source of income, $272 in monthly rent is affordable. A unit is considered affordable if it costs no more than 30 percent of the renter's income.

In 2001, the National Low Income Housing Coalition found that in Santa Cruz and Watsonville, a worker making minimum wage (at that time, $6.25 per hour) would have to work 145 hours a week to afford a two-bedroom place at fair market rent, then $1,175 a month. To make enough to pay for housing without working overtime, a worker would have to make $22.60 an hour.

To put it in other terms, for a Santa Cruz family just to scrape by on the basics, three-four minimum-wage jobs are needed, according to Denise Gammal, a vice president with the United Way in San Francisco.

Studies, as well as our eyes, suggest that a vast number of Californians aren't being paid the legal minimum wage, particularly in restaurants, car washes, agricultural fields, the construction and garment industries and auto body shops, according to California's Economic and Employment Enforcement Coalition, or EEEC. But how do they get away with it?

Low enforcement. There are tens of thousands of wage violators in the state, and only a handful of people employed in enforcement. Although the state's Department of Industrial Relations does reel in crooks, most wage enforcement involves processing the complaints of thousands of whistleblowers, a task that can take years, says Marci Seville, founder of the Women's Employment Rights Clinic in San Francisco.

Santa Cruz has no city-level enforcement body for wage violations, and victims should file claims with the state Division of Labor Standards Enforcement .

Workers can't wait to be rescued. They must come forward if they want to get the minimum fare, which you're entitled to regardless of age or legal status so long as you work in California.

It's very common for workers to fear speaking out. After all, who wants to piss off their boss? They could be fired, maltreated, labeled as untrustworthy or, if undocumented, reported to immigration.

In 2000, the US. Department of Labor Statistics found that well over half the nursing homes nationwide and 54 percent of contractors in Los Angeles' garment industry violate a minimum wage law. Half of Chinatown's restaurants paid workers less than San Francisco's city minimum wage, currently $9.92 an hour, according to a 2010 study by the Chinese Progressive Association.

And although local statistics are hard to come by, in Watsonville two years ago, employees of McDonald's and other chains opened a class action lawsuit for millions of dollars in stolen wages.

From this sea of wage violations, regulators just scoop off the foam.

The California Legislative Analyst’s Office estimated in 2005 that the state's underground economy stood at around $6.5 billion in just unreported taxable wage income every year. If wage agencies had the resources to tackle that egg, they could raise millions in fines, income and sales taxes. They'd also upset a lot of businesses.

San Francisco's city wage unit, the Office of Labor Standards and Enforcement, makes upsetting businesses their business. Since it opened 10 years ago, the agency has won $4.1 million in settlements for stiffed employees—even without a proactive enforcement unit.

The state's master enforcement tool, the EEEC, a collaboration between a number of state and federal departments, has identified $300 million in unreported wages and $40 million in penalties and assessments since opening its doors in 2005.

Of note, the EEEC conducts proactive sweeps of problem industries to root out low wage violators. Most of the time, labor agencies at state and city level have to wait for brave employees to come forward and report criminal employers. There is a growing acceptance of more aggressive enforcement techniques.

Between 2008 and 2009, cash pay violations in the state's restaurant industry dropped by half, perhaps a sign of EEEC's work.

“The EEEC looks forward to a future where it continues to build upon its successes of helping to level the playing field and restoring competitive advantage to law-abiding businesses and their employees,” states the agency's website.

In San Francisco, two board supervisors are brainstorming legislation that might give the city's wage protection agency money for more proactive capacities.

Similar motives may have stood behind the push to win Santa Cruz a minimum wage of $9.92 an hour, an plan that faltered with the rejection of Measure G in 2006. (Santa Cruz does offer employees contracted and subcontracted by the city a “living wage,” which until June 30 will stand at $14.83 per hour without benefits and $13.60 with benefits.)

Among the supervisor's goals are to educate workers about their legal rights so that they are more likely to speak out, and to make coming forward as safe as possible.

Retaliations agains claimants are illegal, but hard to prove.

Embittered employers might call Immigration Customs Enforcement (ICE) anonymously, or argue that they fired a worker for any one of a hundred reasons, said Seville.

As a result, workers should carefully assess their individual vulnerability before stepping forward, if possible, as a group. There is “strength in numbers” said Seville.

Even if minimum wage were well enforced, it's not enough, say worker's advocates.

The day he was appointed to represent California's District 28 last December, former Watsonville Mayor Luis Alejo called for raising the state's minimum wage to $8.50, and for indexing it to annual inflation.

It may be better than the federal minimum wage of $5.15 an hour, but even Alejo's $8.50 is hard to live on, say worker's advocates.