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Thursday, Aug. 23, 2007 | David Parkes didn’t have health insurance last fall when he went to the hospital with kidney problems, where he eventually had a stroke. But the 63-year-old security guard at the North City Water Reclamation Plant can now afford his medication.

“The price of medicine being what it is, it’s a challenge to deal with the whole system,” he said. “I’m glad to have what I got.”

City contractors’ employees have now had a year to enjoy the increased heft of their paychecks thanks to 2005’s living wage ordinance. It dictated that city of San Diego contractors must pony up $12 an hour for their employees — $10 if they include health benefits — with adjustments every year to accommodate cost-of-living increases. It expanded in July to include service workers at venues like Qualcomm Stadium and Petco Park.

Battle Still Waging

  • The Issue: Employees of city contractors have enjoyed the living wage for a bit more than a year now, but several problems have yet to be resolved.
  • What It Means: The City Hall office devoted to living wage enforcement has one staffer, and critics have voiced concern that the oversight needed for the ordinance is simply not there.
  • The Bigger Picture: The living wage office will deliver a status report to the City Council next month.

The aim of the ordinance was to improve the quality of life for the city’s poorest workers, allowing them to pay off debt, quit that second job or finally start saving. On July 1, the wage increased to $10.34 for those with health benefits, $12.41 for those without. Someone making the former wage will net $21,507 if they work a full week all 52 weeks of the year, and someone making the latter wage will earn $25,813. Those numbers will get another bump in July 2008.

A full year’s work will earn someone making California’s minimum wage of $7.50 a mere $15,600.

“How does anyone support themselves off that amount?” asked Nora Nugent, the head of the city’s living wage office.

But while the extra money certainly doesn’t hurt, some employees are still having problems as the city works to iron out the law’s kinks. And opponents of the ordinance are still baffled that the city would add nearly $1 million each year as it attempts to pay down its burgeoning debt. Contractors forward the increased payroll costs right back to the entity that mandated it: the city.

“It’s great if the city can afford it, but at a time when city doesn’t have money — I think that’s a good question. Are you trying to pay employees or are you trying to balance the budget?” asked John Baumgardner, chief executive officer of Ace Parking, which contracts with the city at Qualcomm Stadium. “But that’s beyond me as a guy running a parking company.”

The health insurance offered by some contractors has become an issue for workers who already have health care, either from retiree or military benefits or from a spouse, and who would rather see a pay increase take the place of the insurance they’re not using.

Cleofas Singh, a 77-year-old who works as a security guard at the Metro Biosolids Center, said he has other problems with the living wage besides the unused insurance. He no longer gets holiday pay, and he doesn’t have as many opportunities for overtime. But he said he’s been finally been able to save some money.

“It really brings up your check,” he said. “I haven’t bought anything, but I could. Now I can put a little away for a rainy day.”

The increased price of other expenses has Parkes barely breaking even, even with the extra dollars coming from the living wage.

“The truth is, in the time it took to us to get it implemented, the price of gas has gone up, the price of food has gone up and everything else,” he said. “So, I’m a little bit ahead but not by a whole lot.”

Though one of the purposes of the living wage was to allow people to quit multiple jobs, Gregory Raabe said he actually had to take on another job after his hours as a library security guard were cut when the living wage went into effect so his employer wouldn’t have to pay as much overtime. Though the 31-year-old was able to afford extra cable channels and a bigger soda at McDonald’s, he recently quit the library job to go to school in hopes of better future and more career prospects.

Nugent said one of the major positives resulting from the living wage ordinance was that contractors could no longer slash employee wages to win bidding wars.

“They can’t be the low bidder because they’re paying the least money in wages,” she said. “They have to have administrative efficiencies to make them the lowest bidder, or perhaps a narrower profit margin. But it isn’t a race to the bottom to see how low you can pay your employees.”

Baumgardner said that while the living wage has eased the bidding process with the city, it has created other complicated procedures since not all his clients enforce it.

“It creates a little difficulties and confusion on my behalf if we have employees who work at non-city accounts, because they essentially will have a dual-wage rate,” he said.

Enforcing the living wage has run into problems stemming from a lack of manpower. Aside from some help from the city’s information technology and contracting sectors, Nugent said she’s responsible for the entire department. She relies on employees to complain if their bosses aren’t complying as they should be rather than ferreting out non-compliers, since she simply doesn’t have the time to police everyone, she said.

“At this point we’re handling issues as they come up,” she said. “The first year has been complicated in terms of setting up our structures. The intent was to follow up on any complaints and we didn’t receive any until the Prudential issue.”

Last month, an employee of Prudential Overhaul Supply, which acts as launderer for several city departments, filed a complaint with the city that the company was still paying its workers at below-living wage rates. The company refused to apologize and instead opted not to renew the bid on the contract.

Lani Lutar, president of the San Diego County Taxpayers Association, said her organization is concerned about the city’s lack of administration over the program.

“While we may not agree with it, I think if anything is adopted by the council you would want to make sure that the data coming back to the council of how the program is working is objective, thorough and accurate,” she said.

With the pension crisis and deferred infrastructure maintenance weighing heavily on the city’s purse, Lutar said it was irresponsible for San Diego to absorb even more cost. The stranglehold of that debt has curtailed other budgets, such as those for park maintenance and police officers. However, she said the association has not had discussions of lobbying the City Council to repeal the ordinance.

“The association does recognize that having health insurance is a positive thing for the economy, but again it’s the question of whether you mandate it to the private sector and the means they’re going about doing this,” she said.

Murtaza Baxamusa, research and policy director at the Center for Policy Initiative, said the past year has gone more smoothly than anticipated. The center has been a continual advocate for the living wage, but its officials said they currently have no plans to push for all city employees to earn the increased salary.

“What we really want to do is celebrate the benefits of living wage on low-wage workers in San Diego, especially in reducing poverty,” he said. “This is a moment of celebration.”

People like Parkes, the man with medical problems, hope the living wage is here to stay. Several of his coworkers have a job in addition to their sting guarding the plant, or use it to supplement retirement income, but he said this job is all he has to live off of.

“I don’t have any retirement coming,” he said. “I don’t know what I’m going to do besides going to work as long as I can. That’s a scary situation to be in for a lot of people.”

Please contact Nina Petersen-Perlman directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

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