Our Opinion: Ripple effect and the living wage

12/28/05

Backers of the living wage haven't been upfront about "compaction."

Instead, they're trying to spin their plan by saying "the sky isn't falling."

But city finances and the long-term consequences of this proposal are more complex than a slogan.

Public union leaders in Santa Barbara have been playing the City Council like a violin.

First, the Service Employees International Union exempts its members from the proposed living wage ordinance. This gives the impression that the proposal won't end up costing taxpayers that much money because it will only include employees of companies with city service contracts.

Then, the union works to get the council to back one of the highest living wages in the country. And guess what? When the union is back to negotiate a new contract for hundreds of workers, it will point to the living wage.

The union's bargaining line will be: How can the city tell contractors that they must pay between $11 and $14 an hour, depending on benefits, if the city itself isn't paying these wages?

Paying the city's hourly workers these wages would cost about $755,000 every year, according to one report.

This is just the start of the costs.

The council's ordinance committee has come up with a proposal that is so onerous to businesses -- it aims to set up an enforcement bureaucracy -- that comparing it to living wage ordinances in other cities enters the realm of apples and oranges. Companies may just avoid doing business with the city.

The proposal also basically has wage increases built in for every year.

And what about "compaction"? That's the term used to describe the ripple effect of wage increases initially just given to one group of employees. Higher-paid workers also end up getting bumps in wages because of pay structures in place.

On a different scale, the recent salary hike the county Board of Supervisors gave Sheriff Jim Anderson demonstrates the problem. Mr. Anderson got a $26,373 annual raise, to $191,731.

One reason: County rules say the sheriff must earn at least 10 percent more than the next highest-paid staff person. So, when the undersheriff got a raise, the sheriff also had to get one. In fact, residents learned at the hearing on the raise that compaction will cost the county $1 million by 2007.

The sheriff's job -- an elected position -- should be exempt from the compaction rules. There's certainly no shortage of people willing to run for sheriff, regardless of whether this raise occurred or not.

As for the city of Santa Barbara, backers of the living wage haven't been upfront about the ripple effect. Instead, they're trying to spin their plan by saying "the sky isn't falling."

But city finances and the long-term consequences of this proposal are more complex than a slogan.

Mayor Marty Blum and the rest of the City Council appear to care little about chasing employers and jobs out of town, as they continue to give Santa Barbara a reputation as anti-business.