July 26, 2001

--------------------------------------------------------------------------------

Santa Monica, Calif., Moves to Adopt First 'Living Wage' Law for Businesses By a WALL STREET JOURNAL Staff Reporter

SANTA MONICA, Calif. -- After two years of rancorous debate, this affluent seaside town of 90,000 residents adopted the nation's first municipal "living wage" law that applies to local private businesses.

How Minimum Wage Lost Its Status As a Tool of Social Progress in the U.S. (July 19) The law, approved by a vote of the Santa Monica City Council Tuesday night, requires that businesses with at least $5 million in revenue in a defined geographic area pay their employees a minimum of $12.25 an hour. The requirement drops to $10.50 an hour for employers who provide a certain level of health benefits. The state minimum wage is $6.25. The new law takes effect on July 1, 2002.

About 60 municipalities across the country have adopted living-wage laws, but the Santa Monica measure "is a significant breakthrough," said Robert Pollin, professor of economics at the University of Massachusetts at Amherst. Other laws cover only a tiny percentage of local workers -- mostly those who work for city contractors, he said.

Some Santa Monica businesses were up in arms after the city council vote. "We think it's unfair and will have a very severe impact on a lot of restaurants and retailers that can't possibly absorb the increased costs," said Tom Larmore, a local lawyer who is on the board of the Santa Monica Chamber of Commerce.

http://interactive.wsj.com/archive/retrieve.cgi?id=SB996106580692284912.djm&template=printing.tmpl

-- Martin Thompson (mthom1927@aol.com), July 26, 2001