By a 5 to 2 vote, Santa Monica’s City Council approved a minimum wage for employees of contractors who do at least $50,000 worth of business with the City, at its February 22 meeting. The new minimum wage of $11.50 per hour will go into effect on July 1, 2005. The principal beneficiaries of the law, which exempts government agencies, City grantees and other nonprofits, will be unskilled laborers such as parking attendants and groundkeepers. The hourly amount ($11.50) and the contract size ($50,000) will be adjusted annually on July 1 based on the Consumer Price Index (CPI). Prior to the vote, Council member Kevin McKeown said that the $11.50 per hour wage was chosen as “the idea is here is either taxpayers pay or taxpayers subsidize. The point at which it balances out, we felt, was the level at which a wage earner with a family of four collects food stamps which are paid for by the taxpayer anyway. The current gross monthly income limit for a family in that circumstance is $1,994 per month. $11.50 was chosen to be that neutral point where we’re eliminating that hidden taxpayer subsidy and giving people the dignity of directly paying them for the work they do.” Council member Robert Holbrook disagreed and moved that the minimum wage should be $10.28, which the City of Pasadena has adopted; “I don’t understand why we would ask our taxpayers to spend potentially 15 percent more to get the same work done” than similar cities. “It doesn’t seen fair to the Santa Monica taxpayers.” McKeown responded, “We’re not asking taxpayers to spend 15 percent more, we’re asking the contractors to pay 15 percent more. The experience from living wage ordinances in many other cities has been that little of that gets passed through to the contract the City pays for. The contractors become more competitive and pay the higher wage but they don’t necessarily pass that on to the City.” In the end, Holbrook and Council member Herb Katz voted against the $11.50 wage. Like Holbrook, Katz felt Santa Monica “should be in line with comparable cities.” Mayor Pam O’Connor pointed out that $11.50 per hour will translate to $25,000 per year for a fulltime worker and that may still not be enough to allow workers to live in Santa Monica because “to rent an apartment in Santa Monica you have to have an income of about $50,000 per year… This is about equity and fairness and paying people a living wage that reflects what it costs to live and feed a family in the region we live in.” The exact cost of the new living wage, according to the City staff report, was estimated to be between $500,000 to several million dollars per year. Council member Bobby Shriver’s proposed financial analysis of its costs to the City after its first year of implementation was supported by the other members who approved the $11.50 amount. The City staff report also noted that the living wage for the City of Los Angeles is $10.03 while for the County of Los Angeles it is $9.46, making Santa Monica’s $11.50 the highest in the County. A broader living wage law was approved by the Council several years ago. It required businesses in the coastal zone that gross more than $5 million per year to pay their workers $10.50 plus health benefits. Before it went into effect, it was defeated by voters in a referendum in November of 2002. In other business, the Council approved an ordinance that would eliminate the numerical cap on restaurants in the Bayside District/Downtown and expand the types of establishments that can sell alcohol in the Bayside District and Downtown. At the same time, the Council asked City staff to develop a process for periodic inspection for compliance and a fee schedule to cover it. Council members also approved a contract with the Moore Iacofano Group to facilitate the community outreach for the redevelopement of Santa Monica Place and Keyer Marston Associates to perform a financial analysis of the project.Finally, the Council appointed Father Mike Gutierrez to the Housing Commission.
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