The following is excerpted from Mandates Work: Raising Labor Standards at the Local Level available now from the University of California Press, Berkeley, California.
Beginning in the late 1990s and continuing through 2008, San Francisco enacted nearly a dozen laws to raise pay, improve benefits, expand health care access and extend paid sick leave for low-wage city residents and workers.
As a result, more than one in five San Francisco workers, including most of the low-paid workers in the city, now receive higher pay and increased benefits. Despite many warnings about dire negative effects, these new policies raised wages and benefits significantly for tens of thousands of people without hurting employment, a new book by researchers at the University of California-Berkeley shows. An excerpt from the book's final chapter follows.
As a result of the policies discussed in this book, tens of thousands of low-wage workers in San Francisco receive higher pay. They are not as compelled to come to work when they are sick, and they are more able to take care of their loved ones when they are sick. An even larger number of workers have greater access to health care services. They no longer face discrimination in benefits based on their sexual orientation.
Adding up the results reported in each of the chapters gives us a sense of the scope of the policies' effects. An estimated 77,500 workers received pay increases as a result of the living wage, citywide minimum wage, and IHSS policies.1 Some 59,000 workers gained access to paid sick leave. Slightly more than three-fourths (76 percent) of private employers with twenty or more workers surveyed by Colla, Dow, and Dube reported making changes to health care spending or coverage. Nearly one thousand employers paid into the City health plan in 2010, contributing a total of nearly $80 million on behalf of over 55,000 participants. By 2004, 66,500 people working for companies contracting with San Francisco had taken advantage of equal benefits for domestic partners.
To put these numbers in perspective, in 2012 slightly fewer than 560,000 people worked in San Francisco (U.S. Bureau of Labor Statistics 2013). Considering only those who received wage increases and work in San Francisco, the workers who benefited make up about 12 percent of the city's workforce. The benefit mandates, moreover, reached workers at higher income levels than did the wage mandates. Paid sick leave was newly offered at 15 percent of higher-wage employers; 14 percent of City health plan participants are above two times the federal poverty line (Healthy San Francisco 2012).
San Francisco may be unique in the unusual scope of these employer mandates. But it is not unique in the economic conditions that created the need for the policies or in the efforts of labor and community coalitions and local governments to address them. Rising income inequality and eroding federal protections for workers affect the country as a whole. Increased urban growth and the revival of central cities have not led to shared prosperity; the resulting increase in housing costs has left many further behind.
More than 130 cities and counties have living wage laws. Organizations such as the Los Angeles Alliance for a New Economy, Working Partnerships USA in San Jose, and the East Bay Alliance for a Sustainable Economy in Oakland were early innovators in living wage policies and community benefits agreements. Santa Fe, New Mexico, and Washington, D.C. have long had citywide minimum wage laws and Albuquerque and San Jose have just instituted them. Cities continue to innovate. Emeryville, California, passed a living wage law for large hotels in 2005, which was followed by a similar law in Los Angeles applying to hotels near Los Angeles International Airport. Seattle, New York, and Washington, D.C. all have adopted paid sick leave policies. The Los Angeles, Oakland, and San Jose airports all have living wage policies.
States are also taking action on low-wage work. Eighteen states have minimum wage laws above the national standard; ten of those states index their minimum wage to inflation. In 2011, Connecticut passed a paid sick leave law. New York's Domestic Workers Bill of Rights pro- vides overtime pay for domestic workers and three paid rest days a year. In 2002, California instituted partial wage replacement for paid family leave, followed by New Jersey in 2008 (Appelbaum and Milkman 2013). In 2012, California passed legislation to create a retirement savings pro- gram for workers who do not have access to a retirement plan on the job.
The development of labor and employment policy through these methods represents part of a larger move from the federal to the local. This shift arises, as Miriam Wells reminds us in chapter 9, in response to a lack of federal action. Federal minimum wage changes have become more infrequent and the $2.13 minimum wage for tipped workers has not risen since 1991. Department of Labor resources for enforcement are well below historic levels, as we saw in chapter 8. At the same time, union organizing has been hampered by weak federal protections and increasingly ineffective national labor relations laws.
Local labor policy also represents a move from the bargaining table to the legislature (or ballot box). The policies we have reviewed here encompass some of the key elements that are traditionally found in collective bargaining agreements. The declining share of private sector workers covered under collective bargaining agreements has forced unions to look for new allies and find new avenues to raise standards. The disproportionately high prevalence of part-time and short-term work in low-wage industries like restaurants and retail creates a particular challenge to traditional organizing methods. High turnover makes it difficult to sustain organization at a particular work site when an employer can easily delay the timing of a union election.
In response to these challenges, worker centers such as Young Workers United (YWU), the Restaurant Opportunities Center (ROC), the Domestic Workers Alliance, and the Retail Action Project organize low-wage and immigrant workers outside a traditional collective bargaining frame- work. They rely on a combination of public pressure, litigation, and leg- islation to raise labor standards (Fine and Gordon 2010). YWU was the central organization behind San Francisco's Paid Sick Leave Ordinance; the National Domestic Workers Alliance led the effort to pass New York's Domestic Workers Bill of Rights.
Unions representing low-wage workers are turning to similar strategies. OUR Wal-Mart, the organization of Wal-Mart workers backed by the United Food and Commercial Workers' Union, uses a range of meth- ods to put pressure on the company without seeking recognition for col- lective bargaining purposes. Similar efforts are under way by fast-food workers in New York, Chicago, and other major cities. Public policy plays an important role in all of these organizing efforts.
The Great Recession's slow employment recovery, a lingering wariness of Wall Street engendered by the banking crisis and bailouts, and calls for reducing inequality may yet result in further policy responses. Cities and states around the country and even the nation itself seem poised to implement policies discussed in this book. From the call for a higher minimum wage during President Obama's 2013 State of the Union to arguments in the Supreme Court over equal benefits for same-sex couples to the implementation of the Affordable Care Act and the recent passage of paid sick leave in New York City, elements of the social compact tested in San Francisco are being argued for and adopted on a larger scale.
What can we hope to learn from the cases discussed in this book? First, cities can take meaningful steps to address the issue of low-wage work. Second, they can do so and still remain economically strong. The San Francisco economy is not unique in its ability to incorporate employer mandates.
Dire warnings of disastrous economic and employment effects were heard each time San Francisco passed a new mandate. But San Francisco's experience and the careful empirical analysis presented in this book demonstrate that there need not be a trade-off between equity and economic growth...
Even when taken together, we find no evidence that San Francisco's series of mandates diminished the strength of its economy. While there are limits to how far employer mandates can go without creating negative employment consequences, San Francisco has not reached them. The evidence cited in this book, along with research on other state and local labor standards policies, thus suggests that the United States could go significantly further in protecting labor standards without harming employment.
At the same time, there are important limits to what cities and states can do on their own. Wages and employment both grow faster in a full-employment economy. While state and local governments can take better and worse actions to promote job creation, the strongest policy levers that affect aggregate demand lie with the federal government. Private sector labor law is likewise a federal issue, with state and local governments given limited space for intervention. While state and local labor standards are important in their own right, their success ultimately will depend on how the campaigns that pass them serve to build organization and raise the issues at higher levels of government.
Even as the research presented in this book strengthens our confidence in these policies, we recognize that there are many more unanswered questions. States and cities, to paraphrase Justice Louis Brandeis, will continue to be laboratories full of social and economic experiments. Social scientists should continue to analyze these experiments to advance our knowledge of which policies work and how to implement them effectively. The job of policy makers, organizations, and activists is to make sure that good ideas make it out of the laboratory and on to the main stages of state and national policy.
Reprinted from When Mandates Work: Raising Labor Standards at the Local Level. Edited by Michael Reich, Ken Jacobs and Miranda Dietz. Published by University of California Press, Berkeley, California. C. 2014, The Regents of the University of California.