New Social Compact : Speakers Tout San Francisco Experience As Progressive Blueprint for Labor Standards

By Joyce E. Cutler - January 8, 2009

Originally published by Daily Labor Report, BNA, Inc. (subscription required)

SAN FRANCISCO–From health coverage to mandatory paid sick leave, San Francisco illustrates the results of adopting progressive labor standards and policies, speakers representing the city, business, and labor said Jan. 5.

The remarks were made during a session of the Labor and Employment Relations Association's annual meeting, held Jan. 2-5.

Although modest by European standards, San Francisco policies "represent a bold experiment in American industrial relations," Ken Jacobs, chair of the University of California, Berkeley Labor Center, told the conference.

During the last 20 years, San Francisco has set minimum labor standards for firms doing business with the city and county.

San Francisco enacted card-check recognition procedures at hotels and restaurants where the city has a proprietary interest; established a local earned income tax credit; approved an equal benefits ordinance for firms doing business with the government to provide the same benefits to domestic partners as provided to spouses; mandated a minimum wage law; created a universal health access program; and voted for a mandatory sick leave policy.

Health care reform, paid sick leave, majority verification union recognition, and a higher minimum wage "were all part of Barack Obama's platform" during the presidential campaign, Jacobs said. "San Francisco offers a great laboratory to look at and to understand what is the impact of these kinds of policies," he said.

San Francisco Values.

San Francisco values translate to a "social compact, and the people deserve credit for everything that's happened," said Steve Kawa, chief of staff to San Francisco Mayor Gavin Newsom.

More than 60 percent of San Francisco voters in November 2006 voted for a law requiring workers earn one hour of sick leave for every 30 hours worked, Kawa noted.

San Francisco uses its contracting ability "to promote our social policy. Is that right or wrong? We believe it's absolutely right if it's a matter of quality, fairness, [and] human decency," said Kawa.

Newsom and labor secretary designate Rep. Hilda Solis (D-Calif.) "go back a long way, so she is quite aware of all the things that we've done on the labor side," Kawa said.

Former Sen. Tom Daschle (D-S.D.), President-elect Obama's choice for secretary for health and human services, "has already contacted us about Healthy San Francisco and other things that we've been doing there as they try to do their own" nationwide health care policy, Kawa said.

Business Misgivings.

The San Francisco Bay Area is a very expensive place in which to live and operate, observed Jim Wunderman, president of the regional Bay Area Council representing 270 local employers.

"I think if you look at these things on an individual basis, it's very hard to argue with any particular one of them," said Wunderman, who was chief of staff to then-Mayor Frank Jordan in the early 1990s.

"The question is if you add them all up ... and in fact they were passed and implemented in a compressed period of time, are we putting San Francisco in a unique position" of being noncompetitive, Wunderman said.

Although business has not fled the city, the extent of the opportunity costs of businesses that decided not to locate or expand is unknown, Wunderman said.

"You're not going to globalize waste collection," he said. But when it comes to jobs that can be located anywhere, "that's where the issues really come up."

Although modest by European standards, San Francisco policies "represent a bold experiment in American industrial relations," Ken Jacobs, chair of the University of California, Berkeley Labor Center, told the conference.

When San Francisco in 1996 began requiring contractors to provide benefits for domestic partners that are equivalent to spousal benefits, 500 firms nationwide offered health benefits to domestic partners. By 2002, Jacobs said, 3,500 San Francisco city contractors offered benefits.

The San Francisco Human Rights Commission estimates more than 50,000 people in 35 states had taken advantage of health insurance offered to domestic partners by firms contracting with the city, Jacobs said.

Taking It Local.

The wage gap between workers at the top and the bottom of the wage scale and the benefits gap between union and nonunion workers has "taught us we can't count on federal or state governments to narrow that gap," UNITE HERE Local 2 President Mike Casey told the conference.

"The living wage movement showed us that we can reform things on a local level," Casey said.

Casey expressed hope that local ordinances and advances "will continue to build. And that lays the foundation ultimately for the change that has to come to America at a national level."

Card-Check Impact.

With Congress preparing to consider the proposed Employee Free Choice Act, which, among other things, would establish procedures for certifying unions as the representative of a group of employees when a majority of workers sign union authorization cards, the legislation also was debated during the four-day LERA meeting.

San Francisco in 1997 enacted a card-check organizing law covering hotel workers. Since then, Jacobs said, Local 2 gained representation rights for 1,000 workers as a result of the ordinance. Additionally, he said the local organized another 2,000 workers through card-check procedures at hotels not covered by ordinance.

Local 2 represents 89 percent of San Francisco hotel workers, up from 73 percent, in large part because of the ordinance, said Casey.

Healthy San Francisco provides uninsured city residents access to comprehensive health services through a network of public and nonprofit hospitals. The law requires employers to make certain health care expenditures for workers through the employers' plans or by paying into the city's plan.

Last September, the U.S. Court of Appeals for the Ninth Circuit ruled the Employee Retirement Income Security Act does not preempt the ordinance's spending provisions (190 DLR AA-1, 10/1/08).

The Golden Gate Restaurant Association, which sued over the ordinance, is seeking en banc review (Golden Gate Restaurant Association v. City and County of San Francisco , 9th Cir., No. 07-17370, opposition memorandum filed 12/3/08).

Enforcement Issues.

For years San Francisco had a "little Davis-Bacon" act requiring prevailing wages on public works projects, but the ordinance lacked enforcement provisions, according to Michael Theriault of the San Francisco Building and Construction Trades Council.

After the council sued in 1999 over lax enforcement, San Francisco's Office of Labor Standards Enforcement was created to enforce prevailing wage law, Theriault said.

OLSE now is responsible for enforcing for the health security ordinance, the minimum wage law, sweatshop-free contracting provisions, paid sick leave, and minimum wage requirements for airport workers, Theriault said.

"The OLSE is not central just to the enforcement of prevailing wage, but [to] the new social contract," he said.