The Los Angeles Alliance for a New Economy (LAANE) recently published a study on behalf of the Long Beach Coalition for Good Jobs and a Healthy Community entitled:
A Tale of Two Cities – How Long Beach’s Investment in Downtown Tourism has contributed to Poverty Next Door
You may download this report from the website of the “Long Beach Coalition for Good Jobs and a Healthy Community’s by clicking here. (Click on “publications” and then “Download the Full Report”). I strongly encourage my readers to download this report and read it, in its entirety and with an open and questioning mind, as I have now done.
Through this report, LAANE takes 50 pages and some 17,000 words to get to: “Some Long Beach hotel workers in some downtown Long Beach hotels should receive better wages and benefits and we believe the City should mandate this because some of these hotels received public subsidies.”
Groups like LAANE are firm in their belief that the best answer to poverty is through unionization and government-mandated redistributive policies like so called “living wage” laws.
Unions can benefit some employees
First, let me be clear: I am by no means anti-union. My own family derives many benefits from my own union membership. Absent an effective collective bargaining entity like my union, it’s extremely unlikely that I would enjoy my current wage and benefit levels or working conditions. I pay what I consider to be a considerable amount, in the form of annual dues, to receive such representation from my union and my union has proven to be quite effective when advocating to my employer on behalf of its membership.
But unionization should be a matter of free choice; not coercion or government mandate. Employers should be able to freely choose to negotiate either with a collective bargaining entity or directly with its employees. Employees should be able to freely choose whether or not to engage in collective bargaining.
Coercion and government mandates in this area, as in most others, have the effect of limiting free choice which, in turn, limits our personal liberty.
Moral High Ground v. Intellectual Honesty
Nor do I take issue with LAANE’s or LBCGJHC’s or any other special interest group’s advocacy on the part of some workers, in the hospitality industry or any other. Where I part company with such groups, however, is in the generally misleading and disingenuous manner in which they attempt to convince others of their positions.
The “Two Cities” report is a perfect example of good information used very poorly and, in this, is similar to other publications that LAANE has released. Like all special interest groups, LAANE has an agenda. That agenda is, in fact, LAANE’s entire raison d’être.
If groups like LAANE would simply state their true agendas, unequivocally and up front, and then present facts that support their agendas in a more intellectually honest manner, then they and I would have no issue. What they attempt, instead, is to dress up their agenda in flowery phrases like:
“LAANE is committed to building a new economy that restores the American dream of fair wages and benefits” (LAANE website) and;
“But this redevelopment has largely failed to benefit the community because hotel owners still pay workers poverty wages”(LBCGJHC website).
It’s through whimsical language like this that we are led to believe that the “American dream” has somehow been unfairly withheld from some and that some in our community are consciously keeping others in poverty.
Neither of these assertions is true, of course, but by making such statements groups like LAANE attempt to take and to hold the moral high ground in any debate on the issue.
Because the facts on this issue, when presented in a more intellectually honest manner, tend to favor the converse of the assertions of groups like LAANE…or, at best, to support no definitive conclusion either way…it’s important for such groups to attempt to assume the moral high ground.
From such a position groups like LAANE are better able to appeal to people’s emotion, which requires no unbiased factual support, rather than to their reason… to their intellect, which does.
So called “Living Wage” laws
Despite what groups like LAANE would have us believe, so-called “living wage” legislation is not the panacea for the challenge of low-wage work and poverty. A 2005 study by the Public Policy Institute of California (PPIC) summarized the dilemna that “living wage” laws can sometimes create:
“Living wage laws, as with other forms of government redistribution of income, generally entail some costs and inefficeincies, and it is always important to ask whether there are more effective ways to bring about the particular redistributions of income that voters or policymakers are seeking.”
“Living wage laws boost the wages of the lowest-wage workers but at the cost of disemployment effects for the least skilled.” (PPIC/CEP, Vol. 1, #3)
Through these two simple quotes derived from just one report from a single unbiased organization we see that there are both “down” and “up” -sides to the application of so-called “living wage” legislation. But we will not be exposed to such mitigative information from groups like LAANE because, at least in this instance, LAANE is not seeking to present the whole truth on this topic but, rather, to further their agenda.
Garbage In, Garbage Out
Beyond the hyperbole and the inflammatory and misleading terminology and phraseology that groups like LAANE employ to generate reports like “Two Cities”, they likewise routinely employ cherry-picked facts and twisted statistics to support them.
For example, when LAANE discloses that: “the average hotel worker earns roughly $19,000 per year” they do so prominently on Page 5, but we have to visit the footnote buried on Page 44 to learn that these were numbers from almost 3 years ago. Does the average worker now earn more? It’s certainly probable, but this study doesn’t seem to feel that information to be pertinent.
Likewise; in the “Two Cities” study LAANE tells us that the average worker (singular) earns about $19k per year, and then, in an intellectual sleight of hand, switches its terminology, in the very next paragraph, and states: “the average annual income of $19,000 cannot sustain these **families** (emphasis added)”. The report never discloses what the household size for these average workers may be. It prefers, apparently, to assume and, in assuming, to paint the misleading picture of an entire “family” living on only $19k p/y.
We could just as readily assume that there is at least one other wage earner in “these families” and that these other earners are each making $100k per year. No doubt LAANE would assert that such an assumption would be without appropriate foundation, glaringly inappropriate and we should therefore not accept it.
So why are we to accept such glaring and inappropriate assumptions from LAANE?
A more intellectually honest analysis would report that the individual “average worker” made $19k p/y in 2006 dollars and that this amount is, in fact, well *above* the federally established poverty level of $10,830 for a single person household. Thus clearly refuting the contention that “…hotel owners still pay workers poverty wages…”.
“But what if some of these workers aren’t single?” you ask.
This is a very valid question. Absent definitive information as to the household size of LAANE’s “average worker” we must rely on what I consider to be the best source for this information that is available to us, the U.S. Census which estimates the average household size in Long Beach to be 2.83 persons, but lets give LAANE the other .17 person and call it an even 3.
In fact $19k p/y is above the federal poverty guideline – established by the U.S. Department of Health and Human Services – for households with up to 3 members ($18,310 p/y) and thus, even with 3 person households we still clearly refute the erroneous contention that “…hotel owners still pay workers poverty wages…”
But rather than report such information accurately, it better suits LAANE’s agenda to make unsubstantiated comments like “…hotel owners still pay workers poverty wages…” and “the average annual income of $19,000 cannot sustain these families”
“But what if some of these workers live in households of 4 or more persons?” you ask.
This is also a very valid question and one we should rightly consider. But in doing so we must also consider that the average household of 4 or more persons contains 2 or more wage earners.
What might the average household income be for those with 2 or more wage earners? Even if a second wage earner in the same family earns the same low $19k per year, then the annual household income for the hotel worker in question, in fact, doubles, to $38k p/y.
That figure is above the federal poverty guideline for a household of 8 ($37,010 p/y) and thus, even with households of 4 or more persons we still clearly refute the erroneous contention that “…hotel owners still pay workers poverty wages…”
The U.S. Census Bureau estimates that about 23,371 Long Beach workers (or 11%) are employed in the combined industries of: Arts, entertainment, and recreation, and accommodation, and food services (a category they use that includes our hotel workers, but does not, unfortunately, further separate them out). Absent other data, let’s say that an even 5th of those workers, or 4,674, are employed in the “accommodation” sub-set and that an even 5th of those, or 934, work in the downtown hotels that LAANE is concerned about.
Much of LAANE’s personal information concerning our hotel workers was based upon a 2008 survey they, themselves, conducted at just 2 of the downtown hotels of concern to them…a survey that they, themselves, admit was “not a random sample”. At those 2 hotels, LAANE received survey responses from a grand total of 45…forty-five…employees.
Thus, in “Two Cities”, LAANE seems content to rely upon highly selective personal information, from less that 5% of the available hotel employees to support their various contentions and conclusions, hardly either representative or particularly informative.
The report conveniently omits all of this mitigating information as well and, once again, because it better suits LAANE’s agenda to do so.
The Bottom Line
Special interest groups like LAANE have a clear agenda that, I believe, is counter to the market economic principles that help to assure and enhance our individual liberty. LAANE advocates for the insertion of government-mandated artificialities into labor transactions that are better left between the sellers and the buyers of labor.
I wish to offer my profound apologies to Mr. W. Shakespeare for the admittedly poor adaptation of the quote derived from Macbeth. Though necessarily incomplete, the phrase seemed somewhat more than minimally applicable.
I very much welcome your questions and your comments.