Wednesday, January 22, 1997
LABOR:
Average income has decreased while corporate profits balloonBy
Grace Lee
In the elections of November 1994, we were asked to believe that
a revolution had occurred. It was a time when the words "radical"
and "right" were increasingly linked, when terms like "family
values" and propositions such as Proposition 187 did not
necessarily exclude each other and when the apparently genuine zeal
of the freshman Republican Congress, led by the less apparently
genuine Newt Gingrich, suggested to some the end of business as
usual. If there was a revolution, it occurred with the usual
election-year contradictions.
Almost two years later, Clinton signed the Welfare Reform Bill
in the wake of the November elections, resulting in, the Urban
Institute predicts, 1.1 million children entering poverty for the
first time. This, at a time when almost one-fifth of full-time Los
Angeles workers fall below the poverty line for a family of four.
Meanwhile, the president speaks of responsibility.
The Living Wage Coalition, an alliance of religious
organizations, labor unions and community organizers, has presented
a proposal to the Los Angeles City Council for a Living Wage
Ordinance, which would require companies who service contracts or
subsidies from the city to pay a living wage of at least $7.50 per
hour with full benefits or $9.50 per hour without benefits. This
wage would provide an annual income of $15,600, the income
necessary to support a family of four at the poverty threshold. The
council plans to vote on it within the next month.
Part of a national movement sweeping the country  similar
ordinances have been passed in San Jose, Chicago and Baltimore,
with other efforts underway in Milwaukee and St. Paul  the
ordinance is a response to the increasing disparity between
corporate profits and workers’ income. According to Business Week,
corporate profit is at a 45-year high and employee compensation at
a 30-year low. Kevin Mosely of the Living Wage Coalition writes,
"Due to expanded Pacific Rim trade, Los Angeles has become the
gateway to the U.S., becoming the second-ranked customs district
and the country’s leading port." From 1969 to 1989, employment in
finance, insurance and real estate has grown 79 percent in L.A.
During this time, the wage of a full-time male worker has decreased
from $32,000 in 1969 to $25,000 in 1990, and the percentage of
full-time workers earning below $15,000 increased from 7 percent to
19 percent.
Los Angeles, like many other major cities, has relinquished a
large portion of its tax base in the form of subsidies and
assistance to private companies as an incentive to stay in the
city. Since the 1980s, the city has granted over $1 billion to
luxury hotels and office buildings in downtown, while those
employed by these companies, most of them Latino and Asian, earned
close to minimum wage and minimal benefits. In the meantime, writes
Greg Leroy (author of "No More Candy Store),"two thirds of the 36
states responding to the National Association of State Development
Agencies could not even say what percentage of their incentive
dollars were going to various businesses, reflecting their lack of
overall development objectives."
Opposing the Living Wage Ordinance is the Coalition to Keep L.A.
Working, comprised of an alliance of business leaders, led by the
Los Angeles Area Chamber of Commerce, and supported by Mayor
Richard Riordan. The business leaders, arguing that the ordinance
would require firms to cut jobs and discourage firms from locating
in L.A., have waged a fund-raising and public relations campaign to
sway council members.
In a Los Angeles Times op-ed article, Theodore Williams,
chairman and chief executive officer of Bell Industries, and
Michael Leum, vice president of Pioneer Foods Inc., argue that a
living wage, based on reputable studies, along with first-hand
experience, is not likely to drive corporations out of the city.
Most businesses, they write, base their decision about where to
locate on the quality and availability of the work force and the
local infrastructure available. They also note that each
minimum-wage job created costs $8,600 annually in food stamps,
MediCal and other entitlements that low-wage families must rely on
to make ends meet.
Furthermore, Jim Conn of Clergy and Laity United for Economic
Justice (CLUE), one of the religious organizations of the Living
Wage Coalition, argues that you can’t move jobs sweeping the floors
of city hall or cleaning offices, which he says comprise a majority
of the jobs subsidized by the city. A recent study of the effects
of Baltimore’s Living Wage Ordinance has also indicated no job
losses.
Clearly, passage of the Living Wage Ordinance is not just the
moral thing to do, but the practical one as well. It would ensure
that corporations are held accountable for their actions and that
our tax dollars are not used to subsidize the current poverty wages
of full-time workers. The city council plans to vote on the
ordinance within the next month. In the meantime, the Living Wage
Coalition is sending delegations to city hall to voice their
support. In addition, William Kramer of the UCLA Labor Center, is
organizing students to phone bank.
To get involved, call (310) 794-0698 or e-mail
wkramer@ucla.edu.