Living Wage Issue Put in Voters’ Laps

With three sons and her mother to care for, Flora Andrade finds that her wages as a Santa Monica hotel housekeeper run out long before her family’s needs do.

“I can’t pay for my rent, my bills, my food,” she said. “It’s just too little.”

That is why the Guatemala-born Andrade, 41, is risking the ire of her employer, the Doubletree Guest Suites, to speak out for Measure JJ, a referendum on Tuesday’s ballot that would enact a “living wage” for thousands of workers in the city’s coastal and downtown tourism zone.

Since Baltimore passed the nation’s first “living wage” law in 1994, more than 90 cities or counties, including Los Angeles and San Francisco, have adopted laws boosting the pay of the working poor. Until now, the ordinances have covered companies that have contracts with or get direct economic aid from cities.

Santa Monica’s ordinance goes a step beyond. It would be the first to establish a wage floor for private employers of hotel maids, food servers and retail clerks, on the grounds that the businesses benefit from public investments.

As a result, it is being closely watched nationwide by labor activists who view a victory as a way to propel their movement -- and by business owners who say such measures could distort wages and erode profit margins.

“This ordinance definitely pushes the envelope,” said Madeline Janis-Aparicio, executive director of the Los Angeles Alliance for a New Economy, a coalition that helped enact Los Angeles’ living wage in 1996.

The Santa Monica ordinance would require employers in the tony coastal zone and downtown to pay $10.50 an hour with health-care benefits, or $12.25 an hour without. The rates would be adjusted annually for inflation. Businesses with more than $5 million in gross annual sales for each of the last two years would qualify. The sales figure also would be adjusted each year.

The City Council passed the ordinance last year. But before it went into effect, a hotel coalition succeeded in putting the issue before the voters.

Taking Sides

For weeks, Santa Monica’s nearly 56,000 registered voters have been deluged with campaign mailers, phone calls and precinct walkers urging them to vote for or against. Both sides are accusing the other of misleading arguments and dirty tricks.

The high-stakes squabble is rooted in the city’s decision two decades ago to encourage the development of tourism rather than big office buildings.

The city rezoned the area along and near Ocean Avenue, luring a number of hotels, many owned by multibillion-dollar corporations, such as Starwood Hotels & Resorts Worldwide and Loews Hotels. It also spent millions of dollars to develop the pier, the beachfront and the Third Street Promenade.

In 1995, the Miramar Sheraton, the city’s only unionized hotel, launched a union-busting drive, a move that clashed with the city’s famously liberal sensibilities.

“Santa Monicans began to realize that this was an industry built on the backs of hundreds of low-wage workers,” said Vivian Rothstein, a union organizer who directs Santa Monicans Allied for Responsible Tourism, or SMART, an organization of community activists, clergy and others.

In 1999, the group proposed a living wage ordinance. Months later, a hotel-backed group calling itself Santa Monicans for a Living Wage countered with its own petition.

Known as Measure KK, it was derided by SMART as a “phony living wage initiative” that would cover just 62 people and prohibit the City Council from enacting the kind of measure SMART proposed.

Measure KK made it onto the 2000 ballot but was trounced, 78% to 22%, even though the hotel group spent more than $1 million to drum up support and to unseat council incumbents who favored SMART’s proposal.

Meanwhile, a city-commissioned study found that the typical low-wage worker in Santa Monica had a family income of $20,000 to $26,000, no health insurance and a costly 1 1/2-hour commute. The report projected that the typical family’s after-tax income would rise by 13% to 20% under the SMART ordinance. The conclusion: The hotels could afford the living wage.

Referendum Campaign

In July 2001, the council passed the SMART ordinance. The next day, a coalition of hotels and other businesses began a campaign to place a referendum on the ballot. The result was Measure JJ.

Proponents say the measure is aimed primarily at large employers in the tourism zone, particularly a dozen or so luxury hotels -- including Shutters on the Beach, Casa del Mar and Le Merigot -- and retailers such as Macy’s and Robinsons-May. Many workers in the zone earn $6.75 an hour, the state’s minimum wage.

But several of the city’s hottest restaurants say they will also be caught up in a living-wage web. Some, such as P.F. Chang’s China Bistro, have threatened to eliminate their lunch or sidewalk trade -- laying off workers in the process -- to push sales below $5 million.

“I’m in favor of everybody getting a fair living wage, but it’s got to be equal throughout the area,” said Marvin Zeidler, co-owner of the Broadway Deli on the Third Street Promenade. “If it’s for the United States, fine. If it’s for California, fine. But to single out two or three blocks in Santa Monica and indicate [minimum wages] will be double the normal is unfair.”

More than half of Zeidler’s 170 employees would qualify for the living wage. “If we had to pay the money required, we’d effectively be out of business,” he said.

Living wage advocates counter that the ordinance would allow “hardship” exemptions, but the criteria have not been established.

Economists differ wildly on Measure JJ’s effects. The city study concluded that 2,000 workers at 47 businesses would be covered, whereas a hotel-sponsored report projected more than 4,000 employees at 100 businesses.

The city of Santa Monica, already mired in a budget crisis, would not be immune. Estimates suggest it would have to increase wages to city workers by $3 million.

Certain to qualify would be two luxe hotels -- Shutters and Casa del Mar -- owned by Edward Thomas Cos., based in Beverly Hills.

But the company’s president, Timothy S. Dubois, said all of the company’s 375 hourly workers who do not receive tips already make more than the proposed minimum wage and have for the last two years. The hotels’ starting wage, he said, is $10.82 an hour.

Against Unionization

Even so, the company has contributed $875,000 over the last three years to fight the living wage. Why? Because Dubois sees the ordinance as a thinly veiled attempt to force the hotels to unionize, something he fiercely opposes.

He shows off rooms at Shutters, many of which feature peek-a-boo windows that allow ocean views for guests soaking in bathtubs.

Each room or suite also comes equipped with a snorkel-sporting rubber duck or other bath toy. The rooms bring $350 to $2,000 a night.

The lower rate is about what housekeeper Andrade pays each month for her government-subsidized apartment in a graffiti-scarred neighborhood south of downtown Los Angeles.

She makes $10 an hour at the Doubletree, owned by Hilton Hotels, but has an erratic schedule and no health benefits. The hotel has told workers that some employees will be laid off if the ordinance passes.

But Andrade continues her campaign for Measure JJ, knowing that her 6-year-old son will soon need a test for a heart ailment.

“With a living wage,” she said, “I could afford health insurance.”