The City Council’s firm belief in a free market economy has
shelved a wage ordinance advocated by the body’s most liberal
member that would have required city contractors to provide their
employees with
”
livable
”
wages and health benefits.
By Chris Bone Staff Writer
Gilroy – The City Council’s firm belief in a free market economy has shelved a wage ordinance advocated by the body’s most liberal member that would have required city contractors to provide their employees with “livable” wages and health benefits.
At the council’s July 20 policy summit, Councilman Peter Arellano said low-income families and uninsured workers without health insurance are driving up local health care costs that the city ends up paying for.
But Mayor Al Pinheiro and Councilman Dion Bracco said forcing companies to take care of their own workers would raise their business costs and cause them to lay off workers and rely on city contracts because they wouldn’t be able to compete in the open market or hire more people.
“If a person’s never been in business, they can’t understand this,” Pinheiro said.
Arellano replied that a solution’s in order, nonetheless. “We should stop contributing to the problem and start having a solution,” he said. “How much more is it costing us to have people without health insurance and livable wages?”
A 1998 study done by San Jose and private labor groups answered this question.
It concluded that Santa Clara county spent $10,000 annually providing health and other services to each city-contracted employee who was not paid a living wage because those employees were using taxpayer-financed childcare, housing, food stamps and medical care.
“The city said we don’t want to be creating low wage jobs that come back to the city for services because we’re costing ourselves more than we’re benefiting ourselves,” said Phaedra Ellis, executive officer for the South bay AFL-CIO Labor Council, which contributed to the study.
San Jose now mandates a $12.27 base hourly wage and another $1.25 per hour if no health coverage is offered, and similar laws have been passed in San Francisco, Oakland, Berkeley, Richmond, Santa Cruz and Marin County.
Councilman Roland Velasco said he and his colleagues won’t follow suit, though, because “we have a duty to the citizens to ensure that we get the best product at the best price.”
One such “product” was Madrigals Cleaning Service, which used to perform janitorial duties for the city.
Juan Birrueta, 19, co-owns the company with his mother, Evelia, and they cover 40 percent of their employees’ health costs with PacifiCare Health Insurance that they get through Costco. Birrueta said he thinks Gilroy should require contractors to provide health coverage even though it cuts into his profits.
“Companies just want profits, but why not pay extra? It’s costing companies more money in the long run,” Birrueta said. “I’d rather just have an employee covered so I can get them cured faster so I don’t have to hire people to work double shifts or retrain a new employee.”
