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Impact Of “Living Wage” On San Diego?

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Aired 4/14/10

It's been five years since the San Diego City Council voted to require contractors to pay a "living wage" to their workers. Local labor advocates are celebrating the anniversary this week. We will discuss the impact the "living wage" requirement has had in San Diego.

MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. The City of San Diego's Living Wage Ordinance has just celebrated its fifth anniversary. The law requires businesses that contract with the City to pay their workers more than the minimum wage. The living wage required in San Diego is currently set at about $13 an hour. When the Living Wage Law was enacted back in 2005 there were grave warnings from business leaders that it was a big mistake, it would drive up costs and make San Diego appear unfriendly to business. Meanwhile, supporters claimed the Living Wage Ordinance would signal a rising tide for wages across the community. Neither of those two predictions seems to have actually happened. To tell us more about the hopes, fears and realities of San Diego’s Living Wage Law, I’d like to welcome my guests. Dean Calbreath is business columnist for the San Diego Union-Tribune. Dean, good morning.

DEAN CALBREATH (Business Columnist, San Diego Union-Tribune): Good morning to you.

CAVANAUGH: Donald Cohen is president and executive director of the Center on Policy Initiatives. Welcome to These Days, Donald.

DONALD COHEN (President/Executive Director, Center on Policy Initiatives): Welcome and thank you.

CAVANAUGH: And Richard Rider is chairman of San Diego Tax Fighters. Good to see you, Richard.

RICHARD RIDER (Chairman, San Diego Tax Fighters): Always good to come down here.

CAVANAUGH: And we’d like to invite our listeners to join the conversation. Have you or someone you know been helped by the Living Wage Ordinance in San Diego? Or has your business been hurt by the requirement? Call us with your questions and your comments. Our number is 1-888-895-5727. Dean, I’m turning to you to start off, to give us some background on the Living Wage Ordinance. What was the motivation behind this law?

CALBREATH: Well, part of the motivation or the basic motivation is that the federal minimum wage, which was in effect at the time—we now have a state minimum wage—but the federal minimum wage is a minimum wage that covers the entire nation unchanged. So you could be in the lowest cost place in Mississippi and get – be subject to the same minimum wage that we are here in high-cost San Diego. At that time, it was $6.75 an hour, which is, you know, if you’re trying to make a living in San Diego, that’s pretty unliveable. You know, the Center for Policy Initiatives had long pressed for raising that to be more, you know, to be more locality specific, to be more specific to San Diego so that city government at least – this isn’t something that covers the entire county, it covers city government. City government at least should pay a wage that helps people make a living in San Diego, and that’s what passed in 2005. They had done a lot of studies regarding the true cost of living in San Diego, which is much higher than Mississippi or other places and they – under their estimates this doesn’t even get close to a minimum wage – I mean, to a living wage now but it gets closer than the $6.75 an hour at that time.

CAVANAUGH: And, Dean, remind us of some of the main arguments against the Living Wage Ordinance at that time back in – when this was being debated in 2005.

CALBREATH: Well, the big, number one argument is that it would be very costly for taxpayers. You know, that this is – these jobs are taxpayer funded, that taxpayers should be interested in keeping their taxes low and paying the lowest amount that they can.

CAVANAUGH: Now what entities exactly are covered by this ordinance?

CALBREATH: Well, these are contractors that do business with the City. They don’t, you know, and it only affects their workers on contract to the City. They don’t have to pay their other workers, and many don’t, most don’t, I think. They don’t have to pay their other workers the same but they do have to pay their workers on City contracts this wage.

CAVANAUGH: And, as I said, right now the wage, the living wage requirement is about $13.00 an hour but that’s different if – it has a little technicality where health benefits is concerned.

CALBREATH: Right, it’s $11.00 an hour as long as you’re paying up to $2.20 in health benefits. If you’re not paying those health benefits, then it’s $13.20 an hour.

CAVANAUGH: And how does that compare with our current national and state minimum wage?

CALBREATH: Well, nationally, gosh, I can’t even remember the national. The state minimum wage is now $8.00 an hour. You know, since – in the interim between 2005 and now, the Schwarzenegger administration pushed through a state minimum wage which is gradually going up but it’s $8.00 an hour right now.

CAVANAUGH: One of the criticisms about the Living Wage Ordinance is it doesn’t actually apply to all City employees, is that right, Dean.

CALBREATH: Yes, absolutely. I mean, there are certain categories of city employees right now that do make less than this minimum wage although they do have other benefits. Most of them are covered by health benefits as well as tap into the pension. But on a pure wage level, some City workers are actually still making less than this living wage.

CAVANAUGH: Okay, let me bring in a supporter and an opponent of the San Diego City’s Living Wage Ordinance. Donald Cohen, as I said, president, executive director of the Center on Policy Initiatives, and Richard Rider is chairman of San Diego Tax Fighters. And we are taking your calls at 1-888-895-5727. First of all, Donald, there was a sort of an anniversary kind of party in downtown San Diego for this Living Wage Ordinance yesterday, I believe.

COHEN: Umm-hmm. That’s right.

CAVANAUGH: Tell us about it.

COHEN: Well, we had a celebration downtown at city hall to thank – fundamentally to thank the City for being a responsible employer and to acknowledge the fact that we’ve changed people’s lives, that people that provided us services every day, the janitors, landscapers, security guards. We had several hundred people. We had a concert by Michelle Shocked, who many people know. And it really was – we don’t get to thank the City very often for doing the right thing for the people who serve the City and we thought that was important to do. Maureen, I would like to correct one thing at the – from your intro.

CAVANAUGH: Sure, sure. Yeah.

COHEN: And that is the sense that – because I was involved since the beginning in terms of our claims at the outset that this would be the rising tide that would lift all boats. Philosophically, we believe that but we never believed that the City’s Living Wage Ordinance was about that because it affects just those who provide service to the City. They are basically our employees, they just work for a subcontractor. For us, this was about employer responsibility, that we, as taxpayers, have people that work for us. They clean the park, trim the trees in the parks, they secure our buildings, they clean our public buildings and public facilities, and we have both an obligation to make sure that they have – they can afford to live here and take care of their families as well as the recognition that, as taxpayers, we pay anyway if they get public healthcare benefits or food stamps or other public services because they’re not making enough to make ends meet. So this is where it’s about making the City do the right – be a good employer.

CAVANAUGH: So from your perspective, what kind of effect has the Living Wage Ordinance had on workers who are contracted outside – with the – to do City work during the last five years? What kind of effects has it had?

COHEN: It’s – For me, it’s very simple. There are people who were making $8.00 an hour and think about it. That’s about six – you know, maybe then it was a little less when the minimum wage was a little lower. So let’s say that’s about $15,000 or $16,000 a year. And they are now making $2 or $3, maybe making $25,000 or $26,000 a year. They may or may not have healthcare depending whether the employer chooses the healthcare or the wage. And, you know, I think any of your listeners, any of the people listening to this show or any people in San Diego know how hard it would be to live on $16,000 a year, especially if you have children. So this is the difference for many people, being able to pay their rent, being able to have healthcare for the first time, going to the dentist for the first time. We have lot – we’ve talked to lots of workers. This has transformed people’s lives. Now, in the survey that the City just did of employers, it turns out it has also helped businesses, that the businesses in the – all the contractors that are subject to living wage were surveyed and quite a few—I can go through the numbers later—said saw it reduce turnover and increased quality of service. So even employers are saying it’s a good thing.

CAVANAUGH: Well, I want to get Richard Rider in, chairman of the San Diego Tax Fighters. And, Richard, what’s your take on the City’s living wage requirements and how this has developed over the five years. Have your worst fears been realized?

RIDER: My fears were never – as stated it’s kind of a straw man argument that it was going to hurt the business community. I must admit the chamber of commerce is about as economically illiterate a group as I run across and they make pejorative statements without having any idea what they’re talking about and this did not harm the business community because it involves – We – I’m philosophically opposed to it. It was a terrible idea for various reasons we’ll debate back and forth but it’s a tempest in a teapot. We’re talking about a miniscule amount of money in a city that’s going broke. Thank God it’s a miniscule amount of money. The sum total has been about $2 million, all told, and this is peanuts because most of the contracting that the City does, so far at least, has been to people who make more than $11.00 an hour, professional services and many – and many future areas that they would open up to would already be paying more than $11.00 an hour. And so it’s a bad idea but it doesn’t harm the overall finances of the City because they’re already broke and they’re going broker at a much, much faster rate. This is just another nail in the coffin but it’s not something that is having an effect in San Diego either way. The idea that the business people found there was lower turnover, that’s no surprise. It does – The question there was very artfully phrased. It says would – are you – if you stated it differently: If you weren’t doing living wage contracts, would you pay the same amount? And the answer is no because of competitive pressures and they would find themselves priced out of the market. But, yes, sure, turnover is less when you’re paying above market wages. That’s no surprise. I would expect that that would improve training and so forth. Is it worth the extra cost? No, but there are some benefits from it. So the – to me, the idea is our number one concern right now is the City of San Diego’s finances and the last thing we need to do is to pay – I think Donald’s organization actually wants a $17.00 an hour living wage.

COHEN: Wait, where did you see that? Just so I…

RIDER: Dean Calbreath’s article.

CALBREATH: No, actually I said that that would be…

RIDER: I’m sunk here.

CALBREATH: …that that was a more reasonable wage but not that you’re pushing for that.

COHEN: Yes.

CALBREATH: But that the $11.00 was something you could get through politically.

RIDER: That’s right.

COHEN: We have done research and you can look that up on our website. The research based on the cost of living in San Diego, and maybe, Richard, that’s what you’re referring to. Where you – we – for different size – This is a standard type of research to figure out what self-sufficiency wages, they’re called in the science of the stuff, if you had to pay childcare and given local childcare cost, and if you had to pay rent, given local rent costs. A data driven model, there’s lots of them, that there are families that would need to make $17.00 an hour. That’s not our…

RIDER: This is predicated on the assumption that we have a single wage earner and a single job. In the real world, nobody makes it on single income. You either live with someone else who earns money – This is a fundamental – But let’s just come back to this. The reason they’re not in favor of the $17.00 an hour living wage is politically that we don’t think we can get it through. Ideally, and Donald…

COHEN: No, that’s what he said…

(crosstalk)

CAVANAUGH: Well, I’m going to stop you. Gentlemen, for a moment, please. Gentlemen, for a moment, please.

COHEN: Give the man you quoted.

CAVANAUGH: Okay. Here we go. We have actually agreed on something. We have agreed that as it stands the Living Wage Ordinance has not impacted San Diego City finances very much. What we need to discuss now is whether fundamentally this is a good or a bad idea. I am inviting our listeners to chime in on that part of the discussion. 1-888-895-5727 is the number to call. We do have a call from Jim in Normal Heights. Good morning, Jim. Welcome to These Days.

JIM (Caller, Normal Heights): Good morning. Thank you.

CAVANAUGH: You’re welcome.

JIM: I have a – I’m generally in favor of providing San Diego residents a living wage. My question, however, is when the City contracts out services and the services being provided are outside the city or the provider is outside the city, like the data processing contract that’s up, does the minimum wage apply to people who are earning that wage outside the city?

CAVANAUGH: Thank you for that. I guess…

COHEN: I believe so. We would have to check the actual municipal code but I believe so. This is – affects those that provide services for the City of San Diego.

CAVANAUGH: Now we heard your argument, Donald, about why this is a good idea for people and families in San Diego. I want to get your philosophical take, Richard, on why this is not a good idea for workers in San Diego to have – for the City to say we’re going – if we hire people, we’re going to hire them at a wage that it’s possible to actually live in the city of San Diego.

RIDER: Well, of course, that question is stated in a pejorative manner but to get to the point, the goal as a city is to provide services as efficiently as possible, give the taxpayers the maximum bang for the buck, not to be an agency that is in the business of overpaying for services, which, of course, is what we do with our city workers and pensions. All of that’s been well talked about and will continue to be a problem. So I look at it as – basically, it’s like a family sitting around the – Well, I’ll give you an example. My wife and I are going to remodel a bathroom, two bathrooms. How are we going to go about it? Are we going to go out and look for a unionized shop? No. Are we going to reject them? No. We’re going to go to various places. We’re already in the process. And we’re using our criteria, our informal RFP, looking for what will give us the best return. What gives us the quality work, the best cost, the combination that works best for us. That’s the way most people expect them to operate their families (sic). The City of San Diego, through this policy, is saying we are not really interested in getting the most bang for the buck, we’re interested in becoming an employment welfare agency and pay above-market wages. Now, I understand the philosophy that drives that but – and I don’t care about the businesses one way or the other, frankly. All I care about is that the taxpayers are being forced to pay more than they need to pay to get the services which, of course – I mean, it’s fascinating when you look at this. On the one side, the City of San Diego is reducing services left and right. You look at LA, they just cut back to – And they’re in the same situation. They just cut – stopped – they’re closing their parks two days a week, their swimming pools, their libraries. And so here we are in the process of being destitute and yet we’re in the process of overpaying for the services that we need. That’s a great combination…

CAVANAUGH: Let me stop you there, Richard. And let me have Donald, if you would, address the very issue that is at the heart of Richard’s philosophical disagreement about this. You’re – he’s sitting around the table with his wife. They’re thinking about remodeling, and they’re going to be choosing a contractor. But he’s choosing it, I guess, for the lowest price at the best service. So where does a living wage requirement come in there?

COHEN: First off at a family level, the other criteria that he could use would be his own values. That would be because he’s talking – that’s an individual circumstance, so he could say for me it’s important to pay people enough. That would be the only way. But for the City, as a different institution, it’s a public institution that both – that has a variety of mandates, the mandate of making sure that the people who live in the city can contribute to the city, right? They’re not the school district but it helps – but those of us that live here in the, you know – and that pay taxes and want good services beyond the institution of the city, we want to make sure people can spend time with their kids at home to help them with homework. That’s a public policy concern that has implications for us even financially for the public. It helps that if people make more, they spend more. That puts money into the tax base. If people make more, they draw down fewer public services, as I’ve mentioned earlier. That’s not – that, again, may go beyond the particular institution of the city but it may take us right to county government. And for us as taxpayers, we don’t care. We pay taxes. We want a good society and a good economy. And then finally, back to the original rising tide, lift all boats, there’s plenty of evidence to show that stimulating the economy, having money in people’s pockets—you can go back to Henry Ford with this—that putting money in people’s pockets is the best way to grow an economy that fundamentally is based on consumer spending.

CALBREATH: Yeah…

CAVANAUGH: Oh, sorry. We – Dean, you’ll be the first one I go to when we come back because we have to take a short break. When we return, we’ll be continuing this discussion and taking your calls at 1-888-895-5727. You’re listening to These Days on KPBS.

CAVANAUGH: I'm Maureen Cavanaugh. You're listening to These Days on KPBS. And we’re talking about the City of San Diego’s Living Wage Ordinance that is marking its fifth anniversary. My guests are Dean Calbreath, who is business columnist for the San Diego Union-Tribune. Donald Cohen is president and executive director of the Center on Policy Initiatives. And Richard Rider is chairman of the San Diego Tax Fighters. We’re also inviting you to join the conversation at 1-888-895-5727. And, Dean, I promised you as we left for a break that you would have a chance to respond to the conversation.

CALBREATH: Yeah, I was just going to talk a little bit about the impact on the economy and, you know, not just of these workers who, as Richard says, are a minority of workers but that also the impact of the economy as a whole on having a heavy weighting of, you know, people who make less than they might need to in San Diego. I mean, you know, between 2000 and 2005, I think 40% of the jobs created, and these were our boom years, 40% of the jobs created in San Diego County were created in jobs that paid an average of $25,000 or less. You know, when you’ve got one of the most expensive areas in the county – in the country relying on a workforce that really, you know, has a substantial amount of people who can’t afford to live here, that creates problems, you know, not only in these people not paying taxes and contributing to this society but also in increased demand by these people for healthcare services, for welfare and other things that – you know, because they can’t make ends meet on those low wages. So there are cost savings to paying them more.

COHEN: And not to – on health – on the specific issue of healthcare, you know, the local hospitals are – were and are spending millions of dollars a year on uncompensated care.

CAVANAUGH: Right.

COHEN: And so when we create – when we, as a city, create a job that doesn’t have healthcare, we should just hand the bill to Sharp Hospital.

CAVANAUGH: Well, I’ve invited people to join the conversation and they really want to, so let’s take some calls. We are taking your calls at 1-888-895-5727, or you can comment online, KPBS.org/thesedays. And Jo is calling us from Del Cerro. Good morning, Jo, welcome to These Days.

JO (Caller, Del Cerro): Good morning. I have a question. This all sounds so wonderful but what I’m wondering is if the City has been so magnanimous in passing this Living Wage Ordinance of $13.00 a hour, then how did they get out of paying their own employees the same wage? Employees of the City are exempt from this.

COHEN: That’s not entirely accurate and so let me walk you through it. It’s a little bit more nuanced than that. There is a – The City of San Diego has a collective bargaining agreement. They have a union, have a collective bargaining agreement, and there are other benefits that are negotiated. There are leave benefits, there are pension benefits, there are healthcare benefits. The healthcare cost is more than are provided in the Living Wage Ordinance. And so from the employer’s side there is a larger compensation – there’s an entire compensation package. From the workers’ side, because they are at the table negotiating as a group, they – there is flexibility in the ordinance for them to figure out how they want the money. You know…

CAVANAUGH: I see, so some people are actually getting paid less per hour than the living wage, if you…

COHEN: But more in pension.

CAVANAUGH: …if you don’t factor in the benefits.

COHEN: And so because there’s a structure to do that…

CAVANAUGH: Okay.

COHEN: …we provide for a super session that they can waive the specific requirements because they think they – they would rather have it in a pension than they would have it in a wage.

RIDER: And it’s a good point because what you find is for City workers, the employees generally are costing the City half again as much as their wages because of the magnanimous benefits that the city provides and, of course, that’s oftentimes not calculated. People look at just the pay but the benefits of the City, particularly the City of San Diego, are incredible. And so as a result, the total cost to the taxpayers is far higher than just the salary.

CAVANAUGH: Let’s take another call. Kashka is calling from San Diego. Good morning, Kashka. Welcome to These Days.

KASHKA (Caller, San Diego): Good morning. Thank you. I was calling in – I was wondering about, while listening to your show, where does the responsibility of the individuals come in? When you’re talking about living wage, are we talking about single people who’ve had three kids at a young age and they’re supporting that kind of situation? Or living in San Diego, where does education or a person’s pursuit of education or getting a better job to live in certain areas, where does that come into play with living wage? Because the motivation to structuring your life in a way that you can live where you want and have the life that you want, is that taken into effect here or are fast food workers expected to live in, you know, La Jolla or Pacific Beach working, you know, a very simple job and maybe at a young age or where does the responsibility come in of the individual?

COHEN: Well, let…

CAVANAUGH: Let me ask you a question, Kashka, if I may, do you think that an ordinance like this actually makes – lessens the motivation of someone to raise their status in life and get education and get a better job?

KASHKA: My question is, is if we keep on raising the living wage for people, if we keep on making it easier to not look towards that, you know, we’re raising it right now, and if people complain that that’s not enough and we raise it again and again, when do we start making people responsible for their own, you know, growing up in their professional lives?

CAVANAUGH: Kashka, thank you. I want to go to – If I may, I want to go to Richard because this – Kashka sounds as if she has a similar ideology. Would you agree?

RIDER: Yes. I think one of the problems you have is when you raise minimum wage, let alone living wage, you end up pricing people out of the market. There’s a pretty clear correlation. What happen – look at it from a businessman’s standpoint in this particular example. First off, the employees are not – they’re in a position – you see this with a number of jobs that are relative – should be relatively low paying jobs. People just said, hey, this is not bad, I’m going to stay here. If I go out and get a college degree, I’m only going to get $2.00 an hour more. What’s the point? It’s not worth all the time and effort. So we’re actually wasting some talent. I see this not just in the public sector but in the private sector where people get – live a lot on tips and they end up with that.

CAVANAUGH: How do you respond to that, Donald?

COHEN: Well, I want to respond to the caller. The…

CAVANAUGH: Yes.

COHEN: …I mean, I think there’s – In terms of who – the types of workers we’re talking about, it’s all types of people. I, you know, and we can give you plenty of stories that it’s adults. I don’t think there are actually that many young people in that this is not fast food…

RIDER: I agree.

COHEN: …these are security guards and janitors.

RIDER: Right.

COHEN: So these are adults and what their personal circumstances are, I couldn’t tell you. Some of them may be single parents, some may not be. But to your point, though, it’s first off that if you are making eight bucks an hour, say, you’re likely – and you’re feeling like – and you have responsibilities to either – whether it’s to your children or to pay your rent, you’re probably looking for a second job because you’ve just got to make ends meet. If you are pay – if you are making thirteen bucks an hour—and we have examples of this—you’re spending that extra time going to school. There’s a woman who’s now making a living wage, is about to graduate, you know, has been working her way through college because she can do that when she would have had to actually spend that time making extra money to make ends meet. So I actually believe – First off, I don’t think that $13.00 an hour, it would be – it’s easy to live and it’s making anybody fat and happy. I, personally, would not be able to live on that. And there are – and, as Dean said earlier, a huge number of jobs actually just pay that. So the higher paid jobs just aren’t there, number one. So…

CAVANAUGH: I…

COHEN: Go ahead.

CAVANAUGH: I thank you. And, Dean, please.

CALBREATH: Yeah, if I could chime in. You know, one of the things that was interesting to me, number one is, you know, your solution. Well, if they’re making less here they should just move on. I mean, a lot of businesses frankly don’t like that idea. You know, they – and a lot of workers don’t like that idea. A lot of workers will – you know, they’re security workers who would like to be security workers for the rest of their lives. There are security guard companies, and I talked to a few when I was writing this article, who would like to have those workers be workers for the rest of their lives so they don’t have to train them. But those companies that were paying good wages were being constantly undercut by companies that were paying minimum wage and City requirements are you go to the lowest common denominator. So those companies were finding it very, very hard to pay and retain the kind of workers that they wanted.

RIDER: This is the same argument that’s used for overpaying our City workers, that otherwise they’ll leave and go someplace else. A certain amount of turnover actually is good for the economy, people. It means the people are seeking a better life for themselves, they’re looking for better opportunities as opposed to settling in on a job, having both job security and above-market wages. That’s not going to help a productive economy.

CAVANAUGH: Let’s listen…

CALBREATH: You know, I think in the fifties when everyone had solid jobs, you know, lifetime careers, our economy was pretty darn productive.

CAVANAUGH: Let’s take a few more phone calls. Matt’s calling us from Encinitas. Good morning, Matt, and welcome to These Days.

MATT (Caller, Encinitas): Hi there.

CAVANAUGH: Hi.

MATT: Yeah, I just wanted to make a point that I do agree with Richard on this, that really this has to do with government following kind of Keynesian economic principles that they take from people who make money, who produce capital, to give to people who have nothing. And that really is not a way to stimulate an economy because there is no actual basis for taking someone’s money and then using that money to stimulate them back. So…

CAVANAUGH: Okay. Thank you, Matt. And let’s take another call. Crystal is calling from Ramona. Good morning, Crystal. Welcome to These Days. Crystal, are you there? No. Let’s try and go to Ed in Lakeside. Good morning, Ed. Welcome to These Days.

ED (Caller, Lakeside): Yes, good morning, people. The topic is taxes. Why is – My question is, why is California broke? Now, that person is going to say it’s the spending, however, I’ve been following – I’m an octogenarian and I have a copy of Time/Life – not Time – of Newsweek magazine where the feature issue was pictures of these huge American factories building in China and that included IBM and just go down the list, all of these factories.

CAVANAUGH: Umm-hmm.

ED: Now, many of the things that we’re doing here are – these are American companies, well, they’re not paying American taxes because of the Cayman Islands and all of the corporate offices stacked in one two-story building there. There’s about 10,000 of them, so…

CAVANAUGH: Ed, I want to thank you for the call so much. We’re going to be talking about this but we’re not really talking about it this morning. You know, Richard, I do want you – because I don’t think I have actually heard you respond to the idea that if we don’t pay a living wage to people who work for the City, we’re going to wind up paying for it in another way. We’re going to wind up paying for it by supporting people who need food stamps or we’re going to wind up paying for it – people who need help with healthcare in emergency rooms. So do you agree with that or is that a false proposition as far as you’re concerned?

RIDER: There’s some truth to the fact that, you know, lower income people draw more on social services. The key here is for every dollar we spend extra, just giveaway taxpayer money, do we reduce the taxpayer cost on the other side by a dollar? And the answer is no. There’s no real equal correlation there. I’m sure there is some benefit. There’s always some benefit of paying somebody more money. The issue is more fundamental than that and it was mentioned briefly by the other caller. The idea that I take your money and spend it with somebody else doesn’t improve the economy, doesn’t improve the tax situation. The idea that the person receives it pays some taxes, that doesn’t do any good because you’re out that money now. You’re no longer paying taxes because that money’s already been taken away from you. This is a fundamental problem. It’s – You can always see the benefit of government doing something. The cost is diffused. Everybody picks up the cost as just – it’s buried someplace and you don’t really see the correlation. But we can see the correlation in what the net result, when the City of San Diego decides to overpay its employees, when it decides to overpay its contractors, when it decides that it has money it doesn’t have and then turn – What they do, of course, is they’ll be turning to the voters to ask for tax increases. The tax increases aren’t going to come, and the deficit spending that we’re in right now on this local level because of our pension obligations and healthcare obligations is huge. And the idea that we’re continuing to overpay, to me, is economic madness. But, again, I come back to this fundamental point. This is a tempest in the teapot. Thank goodness this is really a very minor issue and will not affect the economy or the City in any great way.

CAVANAUGH: Do you take any warnings from what you’re hearing from Richard, Donald, in the idea of implementing this and perhaps expanding this, the notion of giving people a living wage?

COHEN: No, I don’t because I think some of the arguments are red herrings that he makes. We’re not talking about taxing the wealthy and giving it to the poor. We’re not – We’re talking about – Really, let’s get back to what we’re talking about here. We’re talking about employer responsibility that does, in fact, you know, reduce our expenditures in other areas like we’ve been talking about, healthcare and other areas. We are an employer. We, the citizens of San Diego, are an employer. I don’t believe the janitors that are now making $13.00 an hour are overpaid. I think that’s the basic standard that we ought to set that both economically makes sense for the region and it makes sense as a good employer. And I – You know, so I think that and I think those are really the issues we have to talk about here. I want to, before the show ends, I want to be really clear to the listeners that there is an effort, there are signatures being collected right now on the streets, that would, on this November’s ballot, repeal the Living Wage Ordinance. And the impact of that would be that the people who are now making thirteen bucks an hour, some who have healthcare, will go back to minimum wage. So we will be making that decision as a city to put people back into poverty if this thing gets on the ballot.

RIDER: And let me say…

CAVANAUGH: I – I…

RIDER: …if you were interested in that ordinance, if you’re interested in that, you can go to www.reformsandiego.com, read the information for yourself, don’t listen to us. Make your own decision. And you can download and fill out the initiative yourself. I certainly hope you will.

CAVANAUGH: Well, I tell you, we will be talking actually a little bit more about this as we expand our discussion in the next hour. We’ll be talking about city worker wages, the upcoming local ballot battles over project labor agreements. Many say it’s a battle between more jobs versus better jobs, and we will continue to take your calls. So if you’re on the line, stay on the line or if you’d like to join the conversation, 1-888-895-5727. I’d like to thank my guest – guests, that is. Dean Calbreath, Donald Cohen and Richard Rider. Thank you all so much. Very lively discussion.

RIDER: And thank you.

COHEN: Thank you.

CALBREATH: Thank you.

CAVANAUGH: You can go online and comment, KPBS.org/thesedays. Stay with us for hour two coming up in just a few minutes here on KPBS.

Comments

Avatar for user 'dmn660'

dmn660 | April 14, 2010 at 9:55 a.m. ― 4 years, 8 months ago

On the living wage ordinance: The man who spoke about wages while giving the example of remodeling his house is obviously incapable of understanding the problems of those people who serve him in restaurants, in stores, and perhaps even some of the workers paid by his contractors. San Diegans, like all Americans, want something for nothing. In a capitalistic society, this does not exist.

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Avatar for user 'ematus'

ematus | April 14, 2010 at 10:10 a.m. ― 4 years, 8 months ago

Ever hear of Deja Vu? This was all discussed ad infinitum ad nauseam when the US minumum wage and each increase was voted in. The facts are that most of the cases of both sides are partial true but most of the doom and gloom never occurs. Minimum wage was going to drive business out of the US and run up the cost of living. It had negligible effect because it just doesn't affect that much of the GNP. Labor union wages and other factors far out weigh minumum and living wage programs. These discussion alway degrade into hollow predictions based on assumed data and miss the human element. People, in general, will always strive to better their station in life by advancing in their careers or getting training or education and starting new careers. Conservative gloom and doom hasn't been realized in the Bailout, Minimum wage or Living wage historically.

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Avatar for user 'scaliguri'

scaliguri | April 14, 2010 at 10:21 a.m. ― 4 years, 8 months ago

I agree with the proponents that the living wage in San Diego needs to be raised. And it really shouldn't matter the type of job a person has chosen for their profession- As long as the person is working an honest job then he or she should be compensated fairly.

I disagree with the last female caller that suggested a person would not be motivated to move up the ladder if they were working in an unskilled job. The reality is not everyone is going to have the opportunity to go to college, therefore they might stay in an unskilled job, working just as hard as a professional. So why shouldn't they be compensated fairly?

Further more, these individuals are trying to pay rent in one of the highest rent districts in our country. It's unfair and unrealistic for opponents to believe that a person can survive making less than $13.00 hr.

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Avatar for user 'benz72'

benz72 | April 14, 2010 at 10:58 a.m. ― 4 years, 8 months ago

The dire predictions may be overblown, but it is difficult to argue that jobs are not migrating to places with lower wages. Whether the artificially high wage derrives from union collusion or city ordinance doesn't really matter, as both of those practices are incentivizing relocation.

As to the idea of fair compensation, it is difficult for a third party to define what is fair consistently. Whatever the participants in a trading or hiring scenario settle on is, by definition, fair enough for them to agree on.

The statement that one cannot survive making less than $13.00 per hour is demonstrably false. There are many thousands of persons who do so.

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Avatar for user 'cletusmoses'

cletusmoses | April 14, 2010 at 11:16 a.m. ― 4 years, 8 months ago

Mr. Rider kept trying to bring the discussion around to "getting the most for spending the least," as evidenced by his bathroom remodel example. If that is the case, why have any minimum wage at all? Why not wage slavery? After all, it is cheaper.

As to Benz72's comment: people also survived slavery, and even worse. Is the point mere survival?

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Avatar for user 'benz72'

benz72 | April 14, 2010 at 12:30 p.m. ― 4 years, 8 months ago

The point is sustainability in a competitive environment, but the idea that one can mandate a higher wage than the market will support without having a shift away from those expensive resources is, at best, wishful thinking.

Would it be preferable to replace those workers with machines? There is no moral hindrance to having a machine do work cheaply. If the choices are overpaying workers vs. investing in infrastructure that will reduce the cost of production, then the smart money is on having the minimum number of people maintaining the maximum number of machines. It is quite possible to price oneself out of a market.

Most of us are already in a situation of wage slavery, and it is very much preferable to a situation of institutionalized slavery. There are very few people today who can sustain themselves on their own land or with their own investments and do not require paid work to augment (or provide the totality of) their income. The idea that instituting or raising a minimum wage would somehow change this condition does not seem well founded. Can you provide a model of how you envision this change occurring?

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Avatar for user 'Barbarametz'

Barbarametz | April 14, 2010 at 6:04 p.m. ― 4 years, 8 months ago

Th hardest I ever worked was as a waitress at Disneyland during college. I was making $1.25 an hour with miserable tips (because people were upset by the exorbitant cost of going to Disneyland). Thanks to my education, family support, and many other factors, I make lots more as a public relations consultant. Interestingly, my knowledge base -- and who I am -- haven't changed that much! I believe that a society will be judged by how it treats the people on the lowest rung of the ladder. Bless all the people who work for minimum wage. They are the hardest workers in our society. They deserve a living wage.

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Avatar for user 'cletusmoses'

cletusmoses | April 14, 2010 at 9:52 p.m. ― 4 years, 8 months ago

Benz72 - thanks for your comments.
I have affinity for your concept of "wage slave," though saying it is better than institutional slavery isn't saying much. I do not think that working for a wage makes one an actual slave, nor do I think that we are returning to institutional slavery anytime soon. Like you said, most of us work for a wage. If it is enough, we don't call it "slave wages." For most of us, it is. As was noted this morning by its opponent, the prevailing wage has not had a big effect on costs to the city. We are talking the few, not the many.

I found it interesting that the exisiting miniumum wage was not debated on this morning's show. Do you favor having no minimum wage? We race to the bottom of cheap (for our bathroom remodels or for our city services) at our peril. What wage level is low enough? That of Mexico? Of Haiti? Of Sudan?

To your last question, I dont think the purpose of the minimum or prevailing wage is to eliminate the condition of the need for paid work. We do not live in a world as simple as "own your means of production and you are free - work for wages and you are a slave." The purpose of the minimum or prevailing wage is to allow for those working in full to earn enough to allow them to do more than merely survive. I think we all, as a society, have an interest in that.

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Avatar for user 'benz72'

benz72 | April 15, 2010 at 8:20 a.m. ― 4 years, 8 months ago

Good Morning CM,
The idea of debating wage levels that are "low enough" misses the point. Value (in the form of work, cash, property, etc.) varies widely by time, place and evaluator. The term "slave wages" is an emotional term with little descriptive value, other than to indicate that the recipient of the wage is dissatisfied with the amount, but not confident enough in their own value to demand more. The solution to this issue is not to mandate some level of compensation, but rather to self-invest to the point where the value of ones work is such that the employer has incentive to prevent the employee from being hired away by a rival.
In other words, the way to avoid being paid unskilled wages is to develop useful, marketable skills, not to vote in legislators who will artificially inflate ones wage. If you have not read "A Message to Garcia", please allow me to recommend it to you. It is long out of date, but not by so far as one would hope.

I do not favor a minimum wage. I favor competetive wages. Artificially high wages result in artificially high prices for the goods producd by that labor, which makes the employee no better off in the long run. Demanding an unearned wage is dishonest. Earning ones paycheck by providing equal value to your employer is moral. Advancing oneself through hard work and study is admirable.

Our society does have an interest in allowing its citizens to self-invest (we provide 12 years of free education to encourage it). The individual interest to self-invest is much more urgent though, as the rewards are more immediate and less widely dispersed. This imples to me that it is incumbent upon the individual to utilize those opportunities and not squander them.
I believe we may disagree on the minimum wage required to ensure survival and allow that growth in personal value. As an example, in 1991 I earned $878.10 a month and still added to savings. The opportunities do exist in our society for those who really want them, but there is no guarentee of a comfortable life while one reaches for them.

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