No Decision Reached On Wage Ordinance

by Landon Dickey on June 28, 2006

After a weeklong delay, the wage implementation and enforcement ordinance underwent further deliberation but received no decision at Tuesday’s Board of Supervisors meeting. The legislation on the table seeks to secure a steady source of funding for implementing San Francisco’s minimum wage law. The law, brought into effect with the passing of Proposition L in November 2003, increased the city’s minimum wage to $8.82 per hour, a full $2 above California’s minimum wage rate. Unfortunately, over a hundred businesses have failed to comply with the wage increase and as a result, thousands of employees have not yet been able to reap the benefits of the new minimum wage. According to Supervisor Sophie Maxwell’s office, these businesses’ violations have harmed the standard of living of San Francisco’s most vulnerable workers.

Maxwell’s latest push for legislation guaranteeing payment of the minimum wage takes the concerns of several community-based organizations to heart. The ordinance is intended to protect the welfare of all residents of the city as well as rectify inequalities between communities. Specifically, in the proposed legislation Maxwell cites the overrepresentation of Asian-Americans, African-Americans and Hispanics among workers earning less than $9 per hour. A loosely defined minimum wage law has worked to sustain lower wages and worsen the welfare of minority communities. Stricter enforcement promises an end to the exploitation of low wage earners and promotes higher living standards in minority districts and districts throughout the city.

It is no surprise, then, that the majority of supervisors support stronger enforcement policies. The debate, as Maxwell’s legislative analyst Greg Asay sees it, is how to best go about funding the employees and programs intended to uphold minimum wage requirements. The Board of Supervisor’s delved into this topic at the beginning of Tuesday’s meeting. Maxwell made a motion for a continuance of the discussion citing her work with the Mayor’s office in finding alternative funding as justification. Initially, Maxwell proposed an annual fee on businesses to finance the enforcement program. The mayor’s office, however, has voiced concern at imposing ostensibly punitive fees on businesses that may or may not have complied with city law. According to Maxwell’s office, she agreed to work with the mayor out of concern for the success of Supervisor Ammiano’s healthcare legislation, which also seeks funding from businesses.

Over the next week, Maxwell will work with Newsom’s office to obtain appropriations to cover the ordinance’s costs. She expressed enthusiasm, noting the appropriations will fund four new positions in the Office of Labor Standards Enforcement (OLSE). The OLSE, a body responsible for implementing and enforcing the original Minimum Wage Ordinance, has found itself understaffed as of late. The organization recognizes the need to further develop its educational outreach program and hopes to do so with the assistance of the mayor. Supervisor Chris Daly was notably less enthused at this idea.

Daly stressed the need for Maxwell’s original “progressive solution” under which large corporations would bear the brunt of maintaining wage rates. He stated definitively the necessity for large businesses around San Francisco to “pay their fair share”. In response the mayor’s representative maintained the position that charging businesses was not necessary if money could be found through “existing resources”. Daly closed with a fiery critique of the mayor, who he accused of balancing the demands of pro-labor groups businesses in order to strengthen his constituency.

Maxwell and the mayor, however, are not alone in their new approach to the minimum wage debate. According to Maxwell’s office, the Chamber of Commerce and Golden Gate Restaurant Association have voiced similar concerns about fees on businesses. These organizations worry that with increased wages as well as an amendment that essentially makes companies pay for the price of spending more on labor, businesses will pack up and leave or face stagnation. Furthermore, a backdrop of increasing input costs creates a hostile environment for new entrepreneurs seeking to do business in the city. New start-up firms may not have the capacity to sustain themselves in the face of low profits or even losses. Ultimately, this could pose a problem for the city’s economy.

The battle lines have been drawn and the stage is set for a contentious Board of Supervisors meeting next week. As Supervisor Daly rightly noted, it is not guaranteed that after reviewing the budget the mayor’s officers will find the money necessary to expand the OLSE’s program. If they do not find the funds in the budget, the board will be forced to make an important choice between either worker’s or business’ preferences. The board has an obligation to enable the law a majority of San Franciscan residents supported in 2003, but it is uncertain how this obligation will fare in the face of an influential opposition.

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