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San Francisco Bay Guardian

By Tim Redmond

MAYOR GAVIN NEWSOM isn’t going to listen to me, and besides, he’s already finished his city budget. By the time I’m done writing this, the budget will be at the printer, and by the time you read it, the mayor’s blueprint for the city’s fiscal future will be all over the newspapers. But just for the record, I think there’s something he ought to consider.

Check out a summary of the study at It’s one of the more remarkable additions to the debate over whether business pays its share of the tab for running state and local government in California.

Titled “The Hidden Public Costs of Low-Wage Jobs in California,” the report, by economists Carol Zabin, Arindrajit Dube, and Ken Jacobs at the UC Berkelely Labor Center, shows that almost half of the money the state pays out in public assistance goes to working people and their families. These people – huge numbers of them – earn so little at their jobs that they have to collect public assistance to keep afloat.

“What’s going on,” Zabin noted in an excellent May 20 story on the study by the San Francisco Chronicle’s Tom Abate,
“is that low-wage employers are shifting their labor costs to the public.”

Think about it: these employers – many of them big businesses, particularly chains – pay a minimum wage that’s so low, with such shoddy or nonexistent benefits, that even full-time workers can’t feed and house their kids on the money. So taxpayers pick up part of the burden. And these same companies constantly fight any effort to make them pay higher taxes.

As we note in an editorial on page 11, Newsom wants to reduce the size of the city workforce and contract out more public services. I suspect that some of the companies that bid on the contracts – offering lower-cost services – will do so in part by hiring cheap labor and not paying for decent health insurance (even if they promise the city otherwise). So when their workers get sick, they’ll wind up in San Francisco General Hospital – which will have lost staff because Newsom doesn’t want to tax big business enough to cover the deficit.

The Committee on Jobs would be howling if one of its members was forced to cut 500 positions because the city wasn’t paying its bills. Now the city is going to cut (at least) 500 jobs – good, unionized jobs with benefits – because downtown isn’t paying its share of the tab. Bad idea.