Will Bay Area political crowd trump LA yet again?

Gavin newsomIt’s been a fait accompli that Gavin Newsom, the former San Francisco mayor and current lieutenant governor, will be California’s next governor after the iconic Jerry Brown heads off into the sunset next year. Moonbeam is a hard act to follow, having served as the state’s youngest and oldest chief executive, but it’s too bad California can’t at least muster a feisty and contentious political debate before crowning another Bay Area pol as successor.

You know, where politicians actually debate issues, take varying political stances and give voters a choice rather than a coronation.

It’s hard to understand Southern California’s inability to exert much clout at the highest levels of California government. Brown is from Oakland. U.S. Sen. Kamala Harris, the former state attorney general who got here start under the tutelage of former San Francisco Mayor Willie Brown, already is touted as the inevitable Democratic nominee for president.

Los Angeles Mayor Eric Garcetti, whose slim accomplishments certainly are on par with those of Harris, is mostly garnering skepticism for his possible presidential run. Sen. Dianne Feinstein is from Marin County and Senate President Pro Tempore Kevin de Leon is, of course, from Los Angeles, but he’s too busy dealing with an unfolding sexual-harassment scandal in his own chamber to have the time for a serious shot at her U.S. Senate seat.

De Leon and the low-key Assembly Speaker Anthony Rendon, D-Paramount, have the top legislative spots, but they’ve mostly rubberstamped the governor’s priorities. No one would suggest that either man is a true power broker – or is on the fast track to the governor’s mansion or the U.S. Capitol. There’s little doubt that Southern California politicians play second fiddle to their Bay Area counterparts and don’t even put up a fuss about it.

They rarely set an agenda that’s distinct from the one set by their Bay Area betters, so perhaps that explains why a region with so many people can’t seem to keep up with the power of an area that’s far less populous. San Francisco Democrats and Los Angeles ones are both progressive – but their priorities should not be interchangeable. The demographics and economies are vastly different between the state’s two megalopolises.

The latest Public Policy Institute of California poll offers some mixed news for Southlanders. For instance, Newsom’s latest lead is far lower than expected. He is favored by 23 percent of surveyed voters, with former Los Angeles Mayor Antonio Villaraigosa, also a Democrat, coming in a surprisingly close second at 18 percent. The other contenders, including the two lackluster Republicans (John Cox and Travis Allen), are in single digits. With the top-two primary system, the top two vote-getters face off in the general election even if they are from the same party.

In the Senate race, Feinstein is besting de Leon by a two-to-one margin, and around half of the voters surveyed had never even heard of de Leon, which is perfectly understandable given his underwhelming tenure in the Capitol. De Leon did throw a really cool $50,000 party at the Walt Disney Concert Hall in 2014 to celebrate his inauguration as Senate president pro tempore, but apparently the “glitz-fest,” as the Sacramento Bee called it, didn’t help any lasting name identification.

On the surface, Villaraigosa’s competitiveness in the gubernatorial race does offer hope that a Southern California politician could once again lead the state. But don’t get your hopes up. He admirably has taken on the teachers’ unions to advance school reform, but he also touched the third rail of politics, when he called for “changes” to 1978’s property-tax-limiting Proposition 13. Instituting a “split roll,” for instance, would dramatically increase the tax bill paid by commercial property owners.

This is more than a policy problem. Villaraigosa’s path to the governor’s mansion involves rallying Southern Californians, Latinos and remaining conservative and Republican-oriented voters. The latter comprise a falling 26 percent of voters, but it’s a significant enough block to create a path to victory. But attacking Prop. 13 tax protection is a nonstarter for that group.

Last November, former Orange County Congresswoman Loretta Sanchez seemed to embrace a similar political strategy (Latinos, mod Dems, Southern Californians, Republicans) to take on Harris for the U.S. Senate race, but despite her more moderate positions, her Latina background and SoCal credentials, Sanchez could only muster 38 percent of the vote. Unless, Villaraigosa expands his appeal, he is likely to face a similar fate.

“It looks just like the Harris race that it’s preordained that the candidate from the Bay Area will get the position rather than a qualified Latino candidate from Southern California,” said Alan Clayton, a San Gabriel Valley-based redistricting expert. “The political class in California protects its own, and they are significantly from the Bay Area.”

For Southern Californians to have a greater voice in Sacramento and Washington, D.C., Southern California Democrats have to speak with a more regional voice – one that focuses on public-sector reform, fiscal responsibility and on working-class concerns (jobs, housing, etc.) rather than the often-bizarre fixations of San Francisco liberals. Until then, expect a county that’s more populous than 40 other states to remain the lapdog to the Bay Area political establishment.

Steven Greenhut is a Sacramento-based writer. 

This article was originally published by Fox and Hounds Daily

Oakland Mayor Urges Residents to Take in Homeless

During her annual State of the City address on Thursday, Oakland Mayor Libby Schaaf called on her constituents to open their doors and residences to the city’s homeless, as union workers picketed against her for her administration’s handling of the city’s rampant housing problem.

“Give up that Airbnb. Fix up that back unit,” Schaff said, encouraging property owners to lease apartments at more affordable rates to recently homeless individuals, according tothe San Francisco Chronicle.

“In Oakland, we don’t step over the homeless we step toward them,” Schaaf said.

The city’s uptick in vagrants is tied to a general gentrification in the Bay Area, stemming from San Francisco, where artists and innovators unable to afford skyrocketing rents have migrated to Oakland.

In May, the Chronicle noted that a survey by Everyone Counts found that the number of homeless persons in Oakland had increased by 25 percent since two years ago.

Outside Schaaf’s Thursday event and planned festivities, hundreds of Service Employees International Union (SEIU )Local 102 union workers — ranging from librarians to street cleaners to city employees — reportedly picketed against the mayor. According to the Chronicle, their stated aim was to draw attention to “the real state of Oakland,” as opposed to the one Schaaf presented on Thursday.

All eight City Council members reportedly said they chose not to attend to because of the demonstration.
Despite their protests, the Chronicle noted that Schaaf said she had great respect for the protesters who were “expressing Oakland values” and speaking “truth to power.”

Schaaf also took the opportunity to rail against President Donald Trump, specifically choosing to hold her event at the Islamic Cultural Center. She did so, she reportedly said, to send “one clear message. And that is that Oakland welcome and honor all people, all families, and all communities.”

Adelle Nazarian is a politics and national security reporter for Breitbart News. Follow her on Facebook and Twitter.

This article was originally published by Breitbart.com/California

Pothole Coast Highway: California Faces an Infrastructure Crisis

Pot hole in residential road surface

The Pacific Coast Highway stretch between Dana Point in Orange County, Calif., at the southern end, and Fort Bragg in Mendocino on the northern end, “is a bucket-list trip,” the New York Daily News enthused two years ago. “Stretching 650 curve-hugging, jaw-dropping miles along the ruggedly beautiful central coast of California, Highway 1 is one of the most scenic roads in the country.”

What the newspaper didn’t mention is that anyone winding along California roads might think that the Big One has already hit. Streets and highways across the state are in awful shape: a cracked, crumbling mess pock-marked with potholes, which tend to grow larger due to time, weather, and government negligence.

Some potholes grew so monstrous after recent heavy winter rains that California Highway Patrol officers in Oakland actually named one — “Steve.” They should have called it “Jerry,” after Governor Brown, who has done little about the state’s failing infrastructure except talk about it, while continuing to seek funding for a costly and unnecessary high-speed rail system. A bit of help for the weary motorist who’s thinking about making a justifiable claim against Caltrans for the damage it’s done to his car? Not in Brown’s California. Chapman University professor and City Journal contributing editor Joel Kotkin wrote last year in the Orange County Register that Brown’s goal “is to make congestion so terrible that people will be forced out of their cars and onto transit.”

Not all of California’s infrastructure problems can be blamed on the winter weather. In 2015, in the midst of a withering drought, the Mercury News reported that a family’s car hit a “killer pothole” near Sacramento with such force that its airbags inflated. Repairs would have cost nearly $15,000, so the insurance company wrote if off as a total loss. Though that might sound like a one-off event, California roads are indeed wrecking cars. “Deficient roads” in the Los Angeles area cost motorists an average $2,800 in annual repair costs. The state implicitly admits that its roads are a mess through a law that enables car owners who feel they’ve “lost money or property as a result of any action or inaction by Caltrans” to make five-figure claims against the agency.

The Reason Foundation, which for decades has rated road conditions across the country, ranked California roads 42nd in the nation in its 22nd Annual Highway Report. The state is 45th in rural-interstate pavement condition, 48th in urban-interstate pavement condition, and 48th in congestion in urbanized areas, the study says. “Half of the nation’s rural interstate mileage in poor condition is located in just five states,” says Reason’s Adrian Moore, and California is one of them. Media reports say that nearly 60 percent of the roads need repair. Will Kempton, a former Caltrans director, told the Los Angeles Times in February that road conditions were the worst he’d ever seen.

Roads aren’t the only infrastructure breaking down in California; its dams are no longer trustworthy. The Oroville Dam in the Sierra Nevada foothills almost failed this winter when its main spillway fell apart. It didn’t, but its near-collapse was a warning, as the New York Times reported, that the state’s “network of dams and waterways is suffering from age and stress.” The San Francisco Chronicle said a year ago that “there are 200 dams in California that are at least partially filled with mud and are approaching the end of their working lives.”

This isn’t a surprise to policymakers, who’ve been on notice for some time. According to the Association of Dam Safety Officials, California had 334 “high-hazard potential” dams in 2005; by 2015, 678 earned that designation. Officials were told in 2005 that the emergency spillway at the Oroville Dam posed a serious risk.

Also vulnerable are the state’s levees, especially those in the Sacramento-San Joaquin River Delta network. Problems in this patchwork of largely muddy banks, built by farmers rather than civil engineers, put much of the state’s water supply at grave risk.

Rather than fix the state’s vital artery system and shore up its dams and levees, Brown and other policymakers prefer to focus on the shiny bauble of high-speed rail and a fanciful mixture of mass transit and bike lanes in an effort to move Californians out of their cars and into forms of transportation favored by Sacramento’s political bosses. Those who resist the agenda because they want to maintain the freedom facilitated by cars are likely to be hit with a new fuel-tax hike (in a state that already has some of the highest fuel taxes in the country).

More taxes, tolls, or user fees might be tolerable if the additional dollars improved the roads. But California has a history of taxing motorists to pay for pet projects that have zero connection with improved street and highway conditions. The Golden State’s existing patterns of density and sprawl have made reliance on car travel a necessity for most residents. Mass-transit advocates can wish for magical people-moving networks that will make cars obsolete, but the state’s planners need to focus on repairing the infrastructure we already have before they start implementing their dreams of a shining California future.

NFL Owners Approve Oakland Raiders’ Move To Las Vegas

As reported by KPBS:

Any hopes that the Raiders would turn their eyes to San Diego in wake of the Chargers’ departure all but evaporated Monday when National Football League owners conditionally approved the Oakland franchise’s move to Las Vegas.

The Raiders will play in Oakland for two more seasons before heading to Nevada, the team announced. It is the third franchise relocation green-lighted by the NFL in a little more than a year, including the Chargers and Rams to Los Angeles.

“The Raiders were born in Oakland and Oakland will always be part of our DNA,” owner Mark Davis said. “We know that some fans will be disappointed and even angry, but we hope that they do not direct that frustration to the players, coaches and staff.”

Very slim hopes were raised that San Diego could provide an alternative destination for the Raiders when development of his Las Vegas plans hit some snags. Such a result would have been ironic given local fans’ antipathy toward their Northern California rival. …

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Suffocating Regulations Driving California’s Housing Crisis to the Brink

urban-housing-sprawl-366c0Stories about the desperate living arrangements of highly compensated California tech workers sound like tales of Third World misery. One newspaper reports that a Silicon Valley engineer pays $1,400 a month just to live in a closet. He’s squeezing his wallet for the privilege of having a “private room” in a house where five adults live in bunk beds in a single bedroom. Another media outlet reported that a Google engineer moved into a “128-square-foot truck — in the company’s parking lot” because the cost of living in a real house was just too much.

Housing is so expensive across California that Joel Singer, CEO of the California Association of Realtors, said last fall that “only about one-third of our fellow citizens can afford to buy a median-priced home in the Golden State, down from a peak of 56 percent just four years ago.” Californians who own their homes spend more than a quarter of their total income on housing, the highest ratio in the nation. In 2014, Golden State renters paid 33.6 percent of their income on housing — third-highest in the nation. Despite rent-control laws — actually, in part due to those laws — San Francisco has the most unaffordable rental costs in the world, according to Nested, an international real estate service. Los Angeles is tenth on the list. Three of the five costliest housing markets in North America are found in California: San Francisco, San Jose and Los Angeles.

The housing crisis isn’t confined to the state’s elite coastal enclaves. In Riverside County, part of a region east of Los Angeles known as the Inland Empire, only 39 percent of households “are able to purchase a median-priced home, which in February was $334,440 for a single-family home,” the Desert Sun reported last March. The national average is 58 percent.

The California housing crunch is the product of a dire shortage of homes. Over the last decade, developers have built an average of 80,000 homes each year. But that number is about 100,000 units short of what’s needed to keep up with demand. According to the California Department of Housing and Community Development, the state will need to build roughly 1.8 million units between 2015 and 2025 “to meet projected population and household growth.” That would be like building more than 10 new Oaklands or nearly six new San Joses over that time.

Developers aren’t fools. They know that there is a great demand for housing in California. The profit motive would make them happy to build all those additional Oaklands. But California’s regulatory climate and development policies have eaten away at that incentive. The hurdles to building homes are high and solidly rooted: the most imposing is the California Environmental Quality Act (CEQA), which allows opponents of development to shut down projects in the courts, often with no environmental basis. But because the lawsuits can disrupt and suppress projects, the law has become, as the Hoover Institution’s Loren Kaye says, a “tool for abuse.”

Other barriers include the steepest impact fees in the nation, in some cases nearly $25,000 per unit; affordable-housing mandates in more than 170 jurisdictions that require developers either to choose between building units at below-market value or face government fines; local anti-growth policies; and rent control.

The regulatory regime even includes parking mandates that require, for example, a development to have at least one parking space for every bedroom in the project — a formula that absurdly still applies when only one driver lives in a three-bedroom apartment housing five people. A Southern California Association of Governments report says that sometimes housing units are removed from a project just to accommodate these local minimum-parking mandates.

Californians have raised NIMBYism virtually to a level of first principles. Golden Staters don’t mind housing development, as long as it’s “not in my backyard.” The state has an ugly history of established residents pressuring local officials to build policy walls that make development too costly to pursue. The result of all this government is a shortage that has produced the most distorted housing market in the country. It’s so warped and battered that it can hardly be called a market.

Layers of government housing policy have been settling on top of one another for decades, creating a deep regulatory bog that is exceedingly difficult to dredge. So it’s reasonable to ask if California will ever become livable again. And with state and local policymakers seemingly less attached to reality every year, it’s reasonable to give up and move, as many have already done.

Is the Raiders’ exit from Oakland inevitable?

RaidersAs CalWatchdog reported earlier this week, the San Diego Chargers are much closer to moving to Los Angeles, having gotten the formal blessing of team owners at a meeting in Irving, Texas, to leave if they choose by the Jan. 15 deadline the NFL established a year ago. But the situation in Oakland with the Raiders seems cloudier — at least in California media, as opposed to websites that specialize in the NFL.

With the Raiders, the seeming good news for fans who want the team to stay starts with the fact that the Oakland City Council and the Alameda County Board of Supervisors appear enthusiastic about working with Fortress Investment Group, which is led by NFL Hall of Famer Ronnie Lott and billionaire investor Wes Edens, on a stadium plan. On Bay Area talk radio, supporters of the plan have dropped hints of having deep-pocket supporters who might come forward to minimize how much taxpayers would have to pay for the billion-dollar-plus new stadium the Raiders and the NFL want.

NFL officials who have criticized San Diego officials for their response to the Chargers’ stadium needs are offering praise for what’s happening in Oakland.

ESPN reported this week that the league told Oakland’s leaders to not worry about the threat the team would leave even though Nevada state leaders have committed to provide $750 million in public funds for a $1.9 billion NFL stadium in Las Vegas. The team would only have to pay $500 million toward the stadium, with the rest of the tab largely picked up by Las Vegas Sands chairman and CEO Sheldon Adelson. One of the world’s richest persons, Adelson hopes to end up a minority or majority owner of the team.

The implication of the remarks by NFL executive Eric Grubman to ESPN is that the league very much wants the Raiders to stay in Oakland even if a better deal is available in Las Vegas. When allowed to comment anonymously, officials with other NFL teams have said that the league should be wary of having a team in the city that is the capital of American sports gambling.

Raiders may sue to leave if NFL owners say no

But optimism about Oakland keeping its team is less apparent on Pro Football Talk, a niche website now affiliated with NBC Sports that has broken dozens of stories in recent years because of its network of NFL insider sources. Site founder Mike Floriowrote this week that Adelson and Raiders owner Mark Davis were struggling to finalize a deal that would bring the team to Las Vegas.

But Florio has long depicted the Raiders’ exit as close to a done deal. On Nov. 22, he reported that Davis would sue the NFL to allow his team to move to Las Vegas if he could not get the support of three-quarters of the league’s 32 owners to relocate his team, as NFL bylaws require.

Davis’ father, NFL Hall of Famer Al Davis, successfully sued the league after it sought to block him from moving the team from Oakland to Los Angeles, where it played from 1982 to 1994 before moving back to Oakland.

Florio has interviewed Mark Davis dozens of times off the record. While he honors the rules and doesn’t quote Davis directly, the impression his coverage always gives is that the Raiders owner sees becoming the first major pro sports franchise to set up shop in Las Vegas — a tourist-centered metropolitan area with 2.1 million residents — as akin to a no-brainer.

Many reporters have also made the obvious point that the Raiders’ image as edgy, unconventional outsiders conforms with Las Vegas’ image.

Florio believes a final decision will be made by September.

This piece was originally published by CalWatchdog.com

Oakland Fire Death Toll Rises

As reported by Fox News:

A grim search for victims of a devastating fire that ripped through a converted warehouse in Oakland, California during a dance party entered a third day on Monday, with the list of 33 known deaths expected to grow.

The blaze, which erupted about 11:30 p.m. on Friday (0730 GMT on Saturday), ranks as the deadliest in the United States since 100 people perished in a 2003 Rhode Island nightclub fire.

As criminal investigators joined recovery efforts at the charred ruin, just east of San Francisco, firefighters found the remains of nearly three dozen victims at the weekend as they searched the debris-filled shell of the two-story converted warehouse being used by an artists’ collective. …

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Local NFL Fans Express Themselves to the League About Possible L.A. Move

As the National Football League neared a final decision on whether to relocate any franchises to Los Angeles, fans in cities that could lose teams gave the league an earful.

Commissioner Roger Goodell recognized how touchy things have become, as an unprecedented sequence of proposals and counterproposals has played out among the St. Louis Rams, San Diego Chargers and Oakland Raiders. “We’ve been 20 years not in the Los Angeles market,” Goodell said, according to ESPN, calling an L.A. team “a huge plus for fans. There are 20 million fans in that market that would love to have a franchise. But we’ve got to do this responsibly. There’s a process, and we’re going through that process.”

Its latest set of twists and turns has played out at hearings in the hometowns of teams contemplating a move. “The three-hour meetings, held on consecutive nights in downtown theaters, were more listening sessions for the NFL than back-and-forth exchanges with fans, who registered online for free passes to the events,” the Los Angeles Times reported. “The league also streamed the hearings online.”

Fan fury

ChargersAt times, fan frustration dominated. “It was loud. It was angry. It was sad. But no matter how much they pleaded for the Chargers to stay in San Diego, many wondered if it even mattered,” USA Today observed at the city’s downtown Spreckels Theater. The Chargers, according to the paper, “say they receive 25 percent of their local revenues from Los Angeles and Orange counties.” In St. Louis, the assembled booed every mention of Stan Kroenke, the Rams owner seemingly intent on shifting his team to a complex to be built on an Inglewood lot where a Walmart once might have been. Echoing a common sentiment, one fan told the Times “there was a feeling around St. Louis that the town hall meeting was merely a formality.”

Comments from the League seemed to reinforce that cynical judgment. In remarks reported by the Times, NFL executive vice president Eric Grubman called the hearings “very cathartic,” but denied that fans’ strongly-voiced opinions ultimately held any sway. “What I got from the crowd was the passion and emotion. There were a couple of ideas to think about,” he said. “But this is not the time to negotiate. We weren’t trying to negotiate with the crowd. What we were trying to do was give them a voice, and be able to carry that voice back, and that happened pretty effectively.”

Hail Mary in Oakland

But in Oakland, at least, fans found succor from their team’s owner, Mark Davis, who vowed to do all he could to stay out of Los Angeles. “We need help from the community as well to get something that our fans in Oakland can be proud of,” he said,according to NFL.com. “We don’t have that right now and we want it. It can be done in Oakland. We’ve talked to three mega developers to get this going. We have been trying for at least the past six years, every day, hundreds of hours, to try to get something done here in Oakland.”

Nevertheless, Davis’s dedication might not pay off. As NFL.com pointed out, the Oakland Coliseum, where the Raiders still play, “was built in 1966 and has been plagued by numerous plumbing and other problems over the past decade.” In Los Angeles, under a proposed joint deal, the Raiders and the Chargers would share a new $1.7 billion dollar stadium located in Carson.

Whatever the feelings involved, the league appeared to be set on a course for a relocation process that could begin — and end — in January. “Teams would pay a fee to apply to exit their current market, and NFL owners can vote to determine the order of preference for franchises herding themselves into the California queue,” UPI noted.

Originally published by CalWatchdog.com

Transparency of Oakland PD Body Cam Footage Sparks Controversy

Police carSeveral local police forces in California got on the police body-cameras bandwagon well before police killings around the nation in the summer of 2014 triggered a broad push for their adoption. The Rialto Police Department was the focus of a 2013 New York Times story that emphasized how much body cameras improved interactions between officers and the public.

But in Oakland, it appears authorities will only release the body-camera videos when they exonerate police, and that the video will be kept from the public and the media in other circumstances on the grounds that it is part of an ongoing investigation. The East Bay Express recently reported on how the Oakland police are dealing with four police killings. In two cases, Police Chief Sean Whent won’t release any body-cam footage. In the other two cases, police wouldn’t release the footage to the public. Instead, on Aug. 19, the Oakland Police Department held a screening for 11 members of the media.

This account is from the East Bay Express:

[The] videos included police body camera footage taken by officers who were chasing Richard Linyard and Nathaniel Wilks (in two separate incidents). On July 19, Linyard was allegedly fleeing the police on foot when he was later found wedged between two buildings. A coroner’s report said Linyard died from injuries he suffered when he was apparently stuck between the buildings.

On August 12, Wilks allegedly fled the police in a vehicle and then on foot. Several officers confronted and shot Wilks near the intersection of 27th Street and Martin Luther King, Jr. Way.

Watson said OPD showed videos to select members of the media in order to dispel inaccurate reports that officers beat Linyard, and claims that Wilks was shot in the back. Both incidents sparked protests. “We held the viewing in the interest of the public, to be able to share information through fair and balanced reporting,” said Watson.

Watson, however, said that the video footage will not be released to the broader public, and that OPD believes the California Public Records Act allows the department to withhold the footage because it is evidence in several ongoing investigations.

‘Completely wrong’ to withhold some video

As the Bay Area News Group reported, giving the police the right to pick and choose which videos to release outraged local civil-rights lawyer Jim Chanin. “I think it’s completely wrong to have selective showings of one shooting and not another shooting, depending on how the department feels . … There’s an inference now that if (police) don’t show you a video, there could be something wrong or improper about (another) shooting,” he said.

Meanwhile, in Sacramento, a bill that would establish statewide procedures on access to and use of policy body-camera footage appears to have failed, U-T San Diego columnist Steve Greenhut wrote on Friday.

In April, a comprehensive bill by Assemblywoman Shirley Weber, D-San Diego, passed its initial committee vote. Per its official description, “Assembly Bill 66 would provide guidelines about when the cameras are to be operated, require notification of those being recorded, and prohibit law-enforcement officers involved in serious use-of-force incidents that result in serious bodily injury or death from viewing the video until they have filed an initial report.” Whent, the Oakland police chief, testified infavor of the bill.

But Weber’s bill was effectively killed within weeks. As Dan Walters wrote in the Sacramento Bee:

Weber’s body camera bill was beaten up in the Assembly Privacy and Consumer Protection Committee. Police unions, whose endorsements politicians crave, strongly opposed it as unfair, and the committee insisted that only local authorities decide when cops can see body videos.

Originally published by CalWatchdog.com

CA Cities Engage in Minimum Wage Arms Race

Minimum WageForging ahead with plans to take minimum wages to new highs, California’s San Francisco Bay Area has touched off tit-for-tat increases, deepening fears that the region’s high cost of living has become a business-killer.

A growing dilemma

“Berkeley’s City Council approved a hike in June 2014 that will lift the minimum wage to $12.53 by next year,” the Los Angeles Times noted. “In November, voters in San Francisco and Oakland overwhelmingly approved increases, with San Francisco on track to hit $15 before Seattle does. Oakland went up to $12.25 this year.” Then, last month, nearby Emeryville surpassed Berkeley and Oakland with a $14.44 wage; “Berkeley sent its labor commission back to the drawing board. The council next month is expected to take up a proposal that would add paid sick days, extend wage hikes until they hit $19 in 2020 and then add cost-of-living increases in perpetuity.”

The upshot for businesses has been mixed at best: although some employers have crafted clever strategies for adding more value for customers, others have worried the path is unsustainable. “The necessity of paying people a living wage in the Bay Area is clear, so it’s hard to argue against it, and it’s something I’m really proud to be able to try doing,” one pizzeria owner told the Times. “At the same time, I’m terrified of going out of business after 18 years.”

As big wage increases have been passed into law across California, business interests haven’t always been the only ones to pump the brakes. In Los Angeles, where the city minimum is a $15 wage, critics of the increases howled when labor advocates wound up asking for a waiver on the eve of its passage. “The exemption was left out of the law’s final version after criticism from the local chamber of commerce and business groups,” noted the Wall Street Journal. “But similar exemptions are included in at least three other Los Angeles laws, including a minimum wage for hotel workers approved last year.”

Recalibrating business

Although California has led the country in grappling with stagnant wages and rising costs of living, the turn toward higher minimum wages has touched off broad debates across the country. Hospitality businesses such as the hotel industry have faced a particular challenge as wages have climbed upward. For years, bar and restaurant groups have lobbied policymakers to think twice, warning that dramatically hiking wages would undermine their business models, which politicians and analysts have often built into their assumptions about jobs and economic health.

“The problem with the minimum-wage offensive is that it throws the accounting of the restaurant industry totally upside down,” as Harold Miller, a restaurant consultant currently serving as vice president for franchise development at Persona Pizzeria, told the Chicago Tribune.

In tech-forward areas with high costs of living and high rents, the threat to the hospitality business model has accelerated the shift toward increased automation and decreased employment rolls.

Stalling statewide

Some California employers have set out to recalibrate their work forces, hoping that a shift to more temporary workers could blunt the economic impact of wage increases. But the political impact of such a shift has also become a problem. Faced with criticism over differential treatment between contract and career employees, the University of California system offered a $15 “minimum wage” set to apply to thousands of contract workers on a private, not public, payroll.

UC unions were still left cold. “Private contract firms will still make as much as $10 an hour or more in profit off the labor of workers being denied the same wages as UC workers doing the same jobs,” wrote the president of the system’s largest employee union in the San Francisco Chronicle. “UC could choose to send a different message by supporting SB376,” she argued, “legislation that would guarantee the employees of UC contractors equal pay as career employees doing the same work.” That bill was authored this spring by state Sen. Ricardo Lara, D-Bell Gardens.

But the latest Golden State bellwether, a bill creating a statewide $13 wage introduced by state Sen. Mark Leno, D-San Francisco, could signal that the minimum wage wave may be cresting. As the Sacramento Business Journal observed, Leno’s effort “moved farther than it did last year, but the bill’s fate is far from assured.” Although Gov. Jerry Brown has “proposed to tackle income inequality this year through an earned income tax credit,” he has declined to comment on the push for a $13 wage — letting a skeptical Department of Finance speak for him.