It’s hard to argue that based purely on merit, the San Diego City Council did the right thing by approving a living wage ordinance for companies that contract with the city.
However decent and noble the move may be, the reality is, this city doesn’t have the money now, nor will the approximately $3 million needed to annually administer the program magically appear anytime soon.
Perhaps most troubling is the message sent by City Council members who, facing the biggest budget crisis in San Diego’s history, still don’t understand how to manage their money. This is a critical juncture for the city’s finances, yet the council nonetheless approved a law obligating companies contracting with the city to pay $10 an hour plus provide health coverage, or fund an extra $2 an hour so employees can get their own insurance.
Council members certainly realize San Diego teeters on the brink of bankruptcy and faces a dim short-term future in digging itself out of its current financial mess. Simply sweeping aside a $1.37 billion deficit in funding employees’ pensions while simultaneously staring at a predicted $50 million hole in the fiscal 2006 budget shows complete disregard for handling San Diego’s money.
It’s basic economics: Don’t spend what you don’t have. When you do, you dig an even deeper hole than the one you’re already in.
Business leaders did their best to point this out, pleading with council members during a lengthy, well-attended six-hour hearing. Their appeals didn’t completely fall on deaf ears. Three of eight council members, along with Mayor Dick Murphy, agreed the plan was ill-advised, given the city’s current fiscal state.
As profound an effect as the living wage ordinance will have on San Diego’s fiscal operation, it’s quite apparent who ultimately will bear the brunt of this feel-good initiative. That’s right; small business once again takes a hit.
Those contracting with the city will be forced to pony up that much more when they win the contract to cater an event, provide security or trim some trees.
One small-business owner who testified at the hearing expects his payroll to skyrocket by $100,000 annually. Try making up that money by passing it along to the customer.
In turn, some small-business owners simply will not be able to afford doing business with the city. It will severely cut into the number of businesses able to bid on certain contracts. In short, even the big fish have trouble surviving in this pond.
Of course, it feels good to say San Diego cares about its working poor by once again sticking it to business. But this city continues to lag on such basic needs as housing , we remain in a 2-year-old city-declared state of emergency , cheap, plentiful energy and water and adequate transportation.
San Diego, once a poster child for fiduciary responsibility, is in desperate need of fiscal leadership. Current attempts to regain its ability to start selling bonds is window dressing, and it’s obvious the mayor cannot muster the necessary votes to put this city back on sound financial footing.
Approving a living wage ordinance now is fiscally irresponsible and runs counter to any tough talk city leaders proffer in righting the sinking fiscal ship at City Hall.
, Rick Bell