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How San Francisco Created a New Social Compact: An Interview With Ken Jacobs




Forget, for the moment, downer news stories coming out of Midwestern statehouses, Southern auto plants and sundry federal courts. A new book edited and co-written by three Bay Area researchers optimistically chronicles what can be accomplished when progressive politicians and a determined electorate, backed by an energetic union movement, tackle income inequality, health care, labor peace and other challenges. When Mandates Work: Raising Labor Standards at the Local Level, edited by Michael Reich, Ken Jacobs and Miranda Dietz, parses a dozen years of legislation passed by San Francisco voters or their board of supervisors. Thanks to 10 ordinances enacted between 1996 and 2008 —

  • 77,500 low-wage workers are now receiving higher pay;
  • A new minimum wage law has put $1.2 billion in the pockets of workers
  • 59,000 workers can stay home from work when they or a loved one is sick without risk of losing a job or a paycheck
  • More people have access to health care—three-quarters of city employers have invested more money into health care

In an interview with Capital & Main, Ken Jacobs, who chairs the University of California, Berkeley’s Labor Center, emphasizes the far-reaching effects of even slightly raising the bar for workplace benefits.

“Setting higher standards has a real impact on people’s lives and their ability to care for themselves and their families,” Jacobs says, while acknowledging that local reforms cannot rectify all regional economic imbalances. “In a place where housing costs are going up rapidly,” he says of San Francisco’s initiatives, “they do not solve all the problems of income inequality. We still see, with the tech boom, people struggling.”

Nevertheless, citywide attempts to redress inequality through local government proposals or voter ballot initiatives can succeed where national efforts cannot.

“Even if you had a higher national minimum wage,” Jacobs says, “some states have higher costs of living and, within those [states], cities have higher costs of living. So the idea of having different wage rates within certain industries or across the city as a whole still makes sense even if you had a higher state or federal minimum wage.”

The book reminds readers that San Francisco wasn’t always the wealthy Emerald City that is now pricing out its working- and middle-class residents.

“As late as 1989 San Francisco’s median income was below the state median,” Jacobs says, adding that the economic justice reforms that began in the mid 1990s were not part of some visionary blueprint but only occurred piecemeal. “Each step built on the previous step, there was no master plan in the beginning,” he says. “The first step came in 1996, with the passage of San Francisco’s equal benefits for domestic partners.” That ordinance extended the job entitlements enjoyed by a married employee, whose company had a contract with the city, to his or her partner, regardless of their gender or official marital status.

Later ordinances mandated “card check” protections to SFO airport workers and certain hotel and restaurant employees — granting union recognition if a majority of workers sign authorization cards saying they desire union representation; a living wage for workers employed by city contractors and businesses located on city property; an increased minimum wage that ranks among the nation’s highest and a comprehensive community benefits agreement at a Hunters Point Shipyard commercial development project.

According to Jacobs, the consequences of the 10 ordinances have dispelled several business-generated fears, while revealing some unexpected truths:

  • San Francisco’s dining industry wasn’t damaged (as some had predicted) by restaurants having to pay higher wages and give health care benefits. Nor, for that matter, did the city’s tourist industry implode. “If it was true that slightly higher prices in the [tourist industry] would hurt it,” says Jacobs, “you’d expect to see a different industry growth rate in San Francisco compared to other places. But if you look at where we were in 1990, 2000 and 2010, it’s the same two percent growth.”
  • Since the initiatives were passed, employee turnover for low-wage jobs in the city dropped from 60 percent to 20 percent.
  • The wage and benefit increases that were designed to help low-income workers have also aided middle-class households. “The sick leave law didn’t just require paid sick leave, but made it accessible to the [worker] and his family members,” says Jacobs. “This affected employees who worked for companies that may have had some sick leave, but not enough, or they had paid sick leave but didn’t allow it for [the employee’s] family members. Even firms that had higher-paid employees may not have met those rules.”

None of the ordinances, though, would have been worth the recycled paper they were printed on without stringent compliance mechanisms.

“Enforcement is essential,” Jacobs stresses, noting that even with the city’s robust enforcement machinery (which over the years has recovered $17 million in back wages), surveys of both employers and workers have revealed that compliance with health care benefits is far from universal.

“Fifteen percent of employers say they don’t provide paid sick leave – a straight violation,” he says. “In both the firm and individual surveys you find that many employers aren’t meeting the full law. Maybe they’re providing paid sick leave but not enough, or not in all the cases all that is supposed to be provided.”

Jacobs does not see San Francisco’s economic initiatives as only being uniquely applicable to that city and points to the fact that its ordinances have since been replicated in many other communities and jurisdictions across the country. In any case, its mandates are here to stay and cannot be ignored by other cities that find themselves struggling with income inequality. “San Francisco,” Jacobs says, “has created a new social compact.”

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