A look at the labor facts

December 21, 2017 by Fred Allebach

Apropos of the Sonoma City Council’s great decision to discuss discussing a minimum wage study, the living wage ordinance, and an RFP to raise the minimum wage, I present to you the Sonoma County Economic Development Board’s (EDB) Sonoma Valley Community Profile and Demographic Report, 2017. See pp. 12-14 for labor stats. This EDB report is, on the surface, a reasonable measure of baseline factual data.

It is possible these stats will be challenged by labor interests like Jobs with Justice’s Marty Bennett, and that will be good, to see how county staff interpretations may differ from a labor advocate’s take. The EDB after all, could be suspected of being pro-management in its biases.

Citizens want fair representation regardless of polity
The Sonoma Valley urban area is unified demographically, but not politically. Sonoma is the hub of 35,000 people, and what happens in Sonoma affects the whole valley urban area, particularly in terms of economic decisions and labor arrangements. The city therefore, has a responsibility to the whole lower valley, to keep in mind the systemic effects of its policies, and not pretend that Sonoma is an isolated island. The city cannot simply externalize its labor issues to other locales to avoid responsibility. Sonoma can’t have an isolationist foreign policy.

EDB study conclusions
Here are some critical points from the EDB study to keep in mind regarding the council’s wage deliberations.

“We are diversifying and becoming increasingly unequal in terms of wealth and access to resources.

Latinos now comprise more than a quarter of the Valley’s population, bringing unique culture and values to our community. At the same time, poverty is increasing, even in the face of growing employment, and this phenomenon disproportionately impacts the growing Latino community. These trends present a dilemma for our future: How can we build trust and bridges across two increasingly separate communities of haves and have-nots?”

“Access to housing is a huge problem that is tied to poverty, the future of jobs, the economy, transportation and the community’s character. So far, this problem is defying solutions. How do we come together as a community to ensure that our policies don’t compound the problems of inequality and poverty.”

80% of Sonoma Valley is economically disadvantaged
By US Census earning figures, over 80% of Sonoma Valley is economically challenged. Economically challenged means: making 80% or less of the median income. Shocking statistic: The bulk of the valley workforce is economically challenged. Hellooooooo powers that be. Thank you Amy Harrington for putting this on the front burner!

Who is not paying enough wages?
On page 14 of the EDB study it shows clearly that the service industry (hospitality, hotel, restaurant, house cleaning and gardening) and ag (wine grape-related) are the primary culprits of low wages; low wages are also present in valley sales and office jobs, and the transport and production sector.

What these EDB stats say is that the vaunted tourism economy is not paying a living wage to the people who are serving it.  Yet at the same time we hear many say that hospitality wages are good. What is up here?  How can there be systemic and growing poverty for tourism service labor and yet many core actors deny it?

The real question: who is paying low wages so that Springs-centered service workers have growing poverty even as valley elite tourism and wealth concentration grows in scope? It seems there is a disconnect somewhere among market-rate economic actors, and an effort to shift blame and avoid responsibility.

Tie city economic development support to higher wages
As a general principle, city economic development moneys (TID, SVVB, Chamber) need to be made contingent on serious systemic improvement to the wage floor. There is no good rationale to give price supports to the business community if those benefits do not also flow to workers in the form of a living wage. With worker benefits not insisted upon as a quid pro quo, what we have ended up with is a system of wage theft and wage labor slavery, which no actors want to admit or take responsibility for.

Certainly as this wage discussion unfolds there will be an effort by employers to avoid culpability, and/or to claim financial hardship.

Discussion
With a federal government that will be gunning hard in the next year for all social programs that help the poor, where will this leave county and city workers who are also squeezed by employers not wanting to pay a living wage? Is this system sanctioned poverty and inequality? Who says it has to be this way and why?

A very strong indicator of who is not paying a living wage in this discussion will be to see who comes out against higher wages. There is a Mexican phrase, when you throw a stick into a pack of dogs; the one that yelps is the one that got hit. It is highly likely that those who will lobby against a living wage are not already paying one; otherwise they would have no problem with the idea. The public will also see who is on the side of labor, and who is on the sides of management.

Higher wages, rent controls, these things are necessary to protect and support workers, otherwise it is just sophisticated rationales to keep up an exploitive status quo.

What did council members say?
Council members, at the 12/18 hearing to discuss discussing the wage issue, had various takes, from support to side-stepping wage issues, to denying there was a problem. Harrington and Agrimonti were clear supporters of putting wage issues on the agenda. Cook mentioned that his vineyard management business pays above the minimum, and that payroll taxes were a culprit in low pay, yet admitted that there was virtually no chance for the city to change that. Gary Edwards mentioned there was a low county unemployment rate and that “most restaurants are paying $15 an hour.” Edwards said that tips account for a lot of earnings, and that he does not know anyone who pays $10 an hour, and in that case he would not do business with them. He also said that he suspects wages are a lot higher than people think, that the facts will bear that out. Edwards also said that if Sonoma paid a decent wage, then people would commute from other places to work here, and that would cause a higher greenhouse gas footprint. (Some of Edward’s assertions are contrary to EDB facts and figures.) Hundley noted that $15 an hour was still not enough to rent here, and that she would like to see the city provide a cost/benefit analysis of raising the wage floor.

The council voted 5 to 0 to put discussing a minimum wage study, the living wage ordinance, and an RFP to raise the minimum wage on a future agenda, likely late April.

What data will council, members and the city use?
The EDB study identifies, from the county, where the low wages are (service sector), and who earns them. Where will city council members find more reliable systemic data? Anecdotally and by self-reference? It seems there is a whole underground economy the EDB found out about but that otherwise no one knows about!

If the city gets a consultant to analyze wages, who will such a consultant be and how will their biases be vetted? Does an RFP just go for the lowest price or the most comprehensive analysis? Marty Bennett advised using a Berkeley consultant source as the regional expert in labor and wage issues.

My educated guess
I can make an educated guess that the primary areas of low wages are in the hospitality sector, particularly house cleaning and hotel/B&B cleaning, in gardening services, in back room restaurant work and in general hotel work. There is also hidden in plain sight low-wage work in valley sales and office jobs, and in the transport and production sector A lot of the low wage will come from two sources: black market immigrant labor and part-time labor, so that no benefits need to be paid. Another area of wage deflation probably comes from forcing labor into being independent contractors when they are really employees.

The powers that be have managed to tamp down wages for a long time. I agree with Will Schonbrun that management uses unproven scare tactics, and that higher wages are not harmful, in fact, they are good. Sharing the wealth is good.

In an ideal world
County wages would be directly tied to the cost of living, so that every wage earner could make at least a minimum wage to afford the basic amenities of Maslow’s hierarchy of needs in their own town, without a massive commute necessary to work. Thus is why a regional effort to raise the wage floor is necessary.

However, it will do no long-term harm if Sonoma leads here and gets out ahead of the minimum wage pack. In a world where we often have to wait way too long to see the right things done, sometimes people just get tired of waiting and want to act. Yes, in my back yard to a real living wage!

Conclusion
Overall this wages discussion process is good in that it brings a salient set of community issues out, and puts them close to the front burner. The council’s two main long-term goals are housing and balancing the tourism economy with residential quality of life. Amy Harrington ran on these issues, and it is gratifying to see her get these things in front of the public where they belong. And as a member of the public, I am glad to see these sustainability issues come out. These are real community priorities, and any issues herein that fit the main council goals should rise to the top of the to do list.