January, 2000

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January, 2000

Living Wage Proponent Submits Only Bid to Study Issue

By Jorge Casuso, Santa Monica LookOut
January 10, 2000

Last fall, when the City Council decided to take up an unprecedented living wage
proposal, it requested bids for a study from 65 of the nation's leading experts on the

Now, all the bids are in, and with less than three months before the study is due, the only expert interested in the job is the man who literally wrote the book on the benefits of the living wage.

Robert Pollin - who authored "The Living Wage: Building a Fair Economy" at the behest of a leading supporter of the proposed ordinance - was the only one to submit a bid by the Dec. 10 deadline, leaving the city in an awkward predicament.

"He asserts that he is an advocate," said City Manager Susan McCarthy. "But he believes
that he can be objective."

McCarthy said city staff will present the council with a series of options at its Jan. 18 meeting. "We're still working out what the options might be," she said.

Opponents of the proposed ordinance - which would make Santa Monica the first U.S.
city to require businesses with no city contracts or direct subsidies to pay workers a
minimum wage - say Pollin's position could likely discredit his findings.

They note that Pollin wrote his book at the behest of Madeline Janis-Aparicio, who heads
the Los Angeles Living Wage Coalition and who urged the council to adopt a living wage
ordinance at its meeting last fall.

"Anything he does is going to be tainted," said attorney Tom Larmore, who heads the
Chamber of Commerce's Living Wage Task Force. "I do think he has a particular bias
about this area, and I think it would make it difficult for any study he produces to be
credible. It would be very difficult to produce something that people would not be
uncomfortable with."

"I think it's a disappointment," Larmore said. "I think the city is disappointed. It was a
very difficult RFP (Request for Proposal). This is a very hard thing to bid on and put a
price on. You have to have a lot of the history of Santa Monica."

The 65 economics professors, researchers and consultants from universities, think tanks
and private firms in more than a dozen states had varied reasons for turning down the

"I think certainly there were time and resource issues involved," McCarthy said.
There was also the question of what to charge for what likely will be a unique study.
"I talked to a couple of them during the process, and they had no idea how to price this,"
Larmore said. "Some would look at this and say, 'There's just a lot of time involved in
doing this.' So there was a lot of uncertainly."

There also was fear of controversy, some of the researchers solicited by the city said.
"The city's already caught on the record that they want it, so you wonder if you will be
pressured," said a Los Angeles-based expert who turned down the offer and who asked
to remain anonymous. "That's a dangerous situation to be in.

"Even if you did an analysis and found no harmful economic impact, there's the
perception that that's what the city wanted," he said. "You're tarnished. You could be
damned either way."

"It was going to be a very controversial thing," said Jack Kyser, an economist for the Los
Angeles Economic Development Corporation, who said he didn't submit a bid due to a
"heavy workload." "Would there be challenges, questions on how you arrived at the
conclusions?" he asked.

Like other experts who turned down the bid, Kyser believes that predicting the impacts of
a living wage - the request for proposal posed 11 major questions -- is a daunting task
that requires "a lot of on the spot interviewing."

Other experts said it would be difficult, if not impossible, to predict the economic effects
of imposing a $10.70-an-hour wage on only a limited number of businesses. (The
proposal only targets businesses with more than 50 employees along the city's coast --
from Fourth Street to the beach north of Pico and from Lincoln Boulevard south.)

"You can't get general statistical data," said Perry Wong, an economic researcher at the
Milken Institute in Santa Monica, who also declined to bid on the job. "When you select only two dozen firms, then the impact is not really economics, you are getting into firms' operational data.

"The firms would absolutely not provide you with that information," Wong predicted. "Even if they did, your sample would be too small. To do the study correctly, you have to do the whole city."

Among the council options on Feb. 18 likely will be contracting Pollin, extending the deadline or revising the request.

"We'll trust Susan McCarthy's research," said Councilman Michael Feinstein, a leading
proponent of the measure. "We don't have to sit and let this thing linger on. We have to
get the facts and do it."

Feinstein said he would wait for the staff report to weigh the options. But he doesn't
believe Pollin should be disqualified because he has taken a stance on the issue.

"There's a lot of it that's subjective, and a lot of this is going to be what are the
numbers," Feinstein said. "I have to see the staff report, but I'm not going to disqualify
someone because they're the only one that handed in" a bid.

Some opponents of the living wage think the staff should rewrite the request for
proposal, this time with community input.

"The city staff have to try to figure out why they didn't get more proposals," Larmore
said. "I would suggest they revise the RFP and put it back out. I think it was unfortunate
that no one from the community had a chance to be a part of the RFP process."

Staff writer Teresa Rochester contributed to this report.

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