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[whitespace] Controversial 'living wage' standard may not be as fearsome as expected

By Traci Hukill

The brainchild of the Milwaukee-based New Party, the concept of a living wage began gaining momentum in 1994 when Baltimore passed a city ordinance requiring city contractors to pay their employees $7.70 an hour. In the four years since, 15 cities including Los Angeles and Oakland have followed suit.

Adam Glickman, communications director for the New Party, explains the party's strategy this way: "The more living wage campaigns at the local level that affect companies, the more they'll be likely to percolate up to the state level, hopefully pressuring Congress to pass a more substantial minimum wage increase than a couple of years ago."

When the idea of a living wage for San Jose first cropped up in early September, alarms went off all over the business community. How would small businesses compete for contracts? Would a caterer who contracted with the city have to pay the dishwashers $12.50 an hour? How would the new measure affect costs to taxpayers? The half-dozen businesspeople who spoke against the ordinance at the Sept. 15 council meeting raised these questions, but they were far outnumbered--and their cautiousness was far exceeded--by an elated throng testifying for the need for higher wages.

The parameters of the ordinance, such as who must comply with it and how much the required wage will be, won't be known until City Manager Regina Williams has researched the potential costs and submitted a report to the council. That's supposed to happen in November.

But there may be good news for business owners worried about their contracts with the city. Small businesses, part-time employees and non-profit organizations will likely be exempt. Restaurants like 840 N. First Street, where the city racks up close to $20,000 a year in meal tabs, don't technically have a contract with the city (they are considered a "vendor" by city definition), so they needn't worry. The same goes for office supply stores where the city does its shopping. In fact, so many businesses who deal with the city are exempt that the real question might be, Does this ordinance have any teeth?

Businesses who sell products to the city aren't considered contractors. But businesses who sell services like landscaping, cleaning and construction are. As it turns out, though, many of these companies already pay their employees the equivalent of a living wage. Says Blaine Boccignone of Davey Tree Expert Company, "We have some federal contracts where there's a prevailing wage [$9-$12 an hour], and that's never been a problem. Most of our skilled employees make more than that anyway. As long as there's a level playing field, it shouldn't hurt us."

Marcus Peck of Lone Star Landscape Construction says he already pays union wages. But many landscape companies, whose employees are at the bottom of the pay scale anyway, may have a hard time.

"If all you did was city work, then it's a good thing," he says. "But when you think about having to pay a guy $12 an hour who's working on a city contract five or six hours a day, a couple of days a week, and then the rest of the time he's doing residential work for $6 an hour ... well, I think there'll be landscapers who'll no longer do business with the city. They're going to lose some good contracts, is what's going to happen."

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From the October 15-21, 1998 issue of Metro.

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