Category: Blog

Recently I was invited to sit down with the Seattle times Editorial Board to talk about how SeaTac’s Proposition 1 would boost the local economy, create new jobs and why it’s the right thing to do.  Coming along with me was a UW Professor of Labor Economics and an airport worker to share her personal experience.

Although we were able to point to credible information and analysis that shows Proposition 1 would boost the economy by $54 million, create over 400 jobs and put more money into the pockets of workers, they were not persuaded.

The editorial rested its case on a recent story by one of their journalists on a similar living wage initiative that passed last year in Long Beach, CA.

Amy Martinez, who has been covering Proposition 1 for several months, did the hard work of finding workers, employers and other observers in Long Beach to put together a balanced and fair front page story.

Funny thing about the editorial is that it lifted only some of the findings from Martinez’s story. So, in fairness, I’d like to point out some others.

First, some context. Measure N won at the ballot in November 2010 by 64% of the vote.  The measure is not apples to apples with Proposition 1 – it covers only large hotels, whereas Proposition 1 covers large hotels, in addition to ground transportation and airport workers in SeaTac. The new wage floor is $13 an hour there (while Proposition 1 would set a floor of $15 an hour). About 2,000 workers at over a dozen hotels were expected to be covered. It went into effect on January 1st, less than 10 months ago.

It’s really a bit early to tell the full effect of Measure N on workers, the hotel market and the broader community. As employers find ways to adjust for the new requirements, the dust needs to settle a bit to see the big picture.

But, here is what we know for now. According to Martinez,

• • • Unemployment dropped from 12.4% to 11.2% since 2012. (That’s no small drop.)
    • Revenues per hotel room, a standard industry measure for profitability, went up by 2.9%.  And occupancy rates went up faster than the rest of the county.
    • Two workers interviewed had their hours reduced, one did not. But it’s not clear whether Measure N was the cause. Regardless, even at a 25% loss in hours, the 33% gain in wages meant their paycheck did not go down. If the reduced hours were seasonal, as suggested in the article, Measure N preserved their income.
    • Two hotels downsized to 99 rooms, avoiding Measure N coverage. However, Martinez also found that at least one of these hotels was planning this downsize before Measure N was even introduced.

If we add to this preliminary look at Long Beach to evidence from other cities and airports with living wage standards, a better and stronger picture appears.

In our report, Below the Radar, Puget Sound Sage showed how four airports have all seen growth and prosperity since living wage policies were adopted.  In Los Angeles, which has a living wage standard for hotels just outside the LAX, the overall market is doing well (occupancy rates and revenue per room both up 3%, according to hotel analysts PKF Consulting).

So, before we reach a conclusion about the outcomes of Long Beach’s very popular Measure N, let’s take initial findings with a grain of salt and take the longer view where we have years of data.

The Washington Policy Center (WPC) this week takes aim at Obamacare, blaming it for the new-found drive of corporate retailers to cut their part-time workers off of healthcare. Roger Stark calls union support for the new health care policy “ironic” and asserts that “the law they supported is hurting their own members.”

His case in point is the strike vote of 30,000 grocery workers who are negotiating with big chains like Safeway and Kroger for fair wages and benefits. The WPC editorial claims that worker dissatisfaction with the grocers’ proposals to cut healthcare for part-time workers derives directly from the Affordable Care Act (ACA.)

What WPC seems to have missed is that the grocery chains have already taken the proposal to drop part-time workers from company health coverage off the table in their negotiations with unions (though at what level they will fund the program remains in dispute.) They have done this without any changes in national policy that would suddenly absolve the responsibility for employers to insure their workers. Yet, none of these corporations have simultaneously announced their intention to go out of business as a result.

We have already posted on why the blame Obamacare game is a lame excuses strategy. It is a ploy to obscure the fact that giant retailers (not unions) are making decisions that hurt workers. While they publicly claim Obamacare is making them do it, they are really doing it because it’s so much more profitable to shift the cost of providing workers on to tax-payers and the new health care exchanges.

It’s time to cut through all the rhetorical posturing. The ACA is not forcing businesses to cut full-time workers down to part-time status, or drop part-time workers from their health insurance coverage.

The federal mandate is a policy that applies a fee (a tax) for not providing health insurance for employees who work full time. It defines full-time employment as 30 or more hours a week. Dropping worker hours to get around the requirement is an attempt to exploit what amounts to be a tax loophole. Big companies rarely pass up this kind of opportunity. There is nothing new about that.

When corporations ask the federal government and tax-payers to pick up the cost of providing worker benefits so that they can attract and maintain workers, they are asking the government to subsidize the cost of doing business. That is corporate welfare.

The real flaw with the ACA is not how it forces companies to hurt workers, but how easy it made off-loading labor costs onto tax-payers.

Hotel developer R.C. Hedreen goes before the Seattle Design Commission today. Why? Hedreen needs the city to cede over a public alley in order to build a new mega-hotel at the old greyhound bus site at 9th and Stewart.

To give you a sense of the scale of this project according to the most recent proposal that the tower will reach the highest allowable height in downtown at 500ft tall, include 1,680 hotel rooms, and as much as over 185,000 sq. ft. of convention and pre-function space. The total proposed amount of meeting space is enormous – greater than the combined meeting space in Seattle’s Sheraton, Westin, Hyatt and Hilton hotels.

But the City doesn’t just hand over alleys or streets to anyone who asks. Unlike land use approvals typically granted for checking a series of boxes, City Council has complete discretion to say no or yes – for a wide variety of reasons related to public interest.

On top of that discretion, the City is required by State law to obtain public benefits in exchange for the permanent loss to the street grid (called a street or alley “vacation”). For an alley vacation on the newly approved Amazon campus, Jeff Bezos is on the hook for purchase and operation of a street car among other open space and transportation goodies for the neighborhood.

So, what’s the mega-hotel offering as public benefit?

Before answering that, we have to note that the developer, R.C. Hedreen, needs over 880,000 square feet of “bonus” floor area to build all 400 feet of his hotel tower. To get the bonus, the City’s incentive zoning program requires the developer to produce about 150 affordable units on site – or cut a check to the Office of Housing for $12.4 million. Hedreen has proposed to build the units on-site. And he wants to count it as a public benefit for the alley.

According to the developer, building on-site is “unprecedented” and a “high priority for City leadership.” Both are true. No commercial project of this scale has included units on-site and City Council and the Mayor are working now on getting incentive zoning to generate more affordable units in downtown. But everyone recognizes that commercial developers don’t build on-site because the in-lieu fee option is typically much cheaper.

So, does Hedreen get to count his affordable unit for both the bonus area and the alley vacation? The City’s Street Vacation policy (City Council Resolution 30702) says no. It specifically states that “Meeting code requirement for a development” does not constitute a public benefit. And that “The public benefit must exceed elements required by the SMC.” Building on-site may be more expensive, but it does not go beyond what the code requires Hedreen to get a density bonus.

It seems that this developer wants to “double dip” from the public well with his on-site units. It would be reasonable to argue that additional incentive is needed to get more affordable units downtown. But it should be decided through policy, not a street vacation process. For now, double-dipping could undermine both the carefully crafted street vacation policy and the City’s incentive zoning programs. Council created them for separate purposes and for differing public interests: the first, to preserve and enhance the urban environment, and the second to address the lack of affordable housing in Seattle.

King County Metro is planning for a 17% reduction in bus services beginning in 2014 during a time when ridership is at its highest point since `08. Unless state lawmakers take up transit funding during the upcoming special session in November transit riders can expect cuts to 600,000 service hours, 65 routes eliminated, and 86 routes reduced or altered.

That will mean longer walks to stops, longer waits, more difficult transfers, and more crowded rides. To some, it will mean total loss of public transit options. To find out the details about what routes are at risk, visit King County Metro online.

Transit riders and city residents will have an opportunity on Monday October 14th to make their concerns heard when State Senators will be making a stop on their “listening tour” in Seattle at First Presbyterian Church. The Transit Riders Union is planning a rally outside the church beginning at 5pm.

They are likely to get an earful. Here is why:

Transit riders who have a car are likely to go back to driving, adding between 20,000 to 30,000 vehicles (according to the office of County Councilmember Larry Phillips) to already congested traffic conditions in Seattle. Not only will commutes become more hectic, but the city’s environmental goals for transit will be undermined.

For those who rely on public transit – most likely to be people of color and low wage workers – service cuts represent more than an inconvenience. A disruption of transit at this scale can be detrimental to those for whom public transit is their primary source of transportation to get to jobs, schools, daycares, and grocery stores.

According to Got Green’s Community Survey – Young Workers in the Green Economy – roughly 1/3 of young people don’t have access to or can’t rely on a car for transportation. Claira, an 18-year-old retail worker, recounted how a lack of viable public transit has meant the loss of a job. “Where I work, there is only a bus every hour. . . . I lost a job once because I missed a bus. Because I was late, they passed my time slot to someone else. It’s devastating sometimes.”

For more information about the cuts visit KIng County Metro online.

New research conducted by the University of Washington in collaboration with Puget Sound Sage indicates that residents of South Park and Georgetown are likely exposed to higher levels of diesel exhaust than residents of the Beacon Hill and Queen Anne.  Within the two Duwamish Valley neighborhoods, pollution levels vary, even across small areas, and residents near busy roads and industrial areas face higher levels of diesel exhaust pollution.

The higher air pollution levels due were documented in the Diesel Exhaust Exposure in the Duwamish Study (DEEDS), which measured diesel exhaust in the port-adjacent neighborhoods of South Park and Georgetown. A large volume of traffic travels through these South Seattle communities is due to nearby highways, industry, train routes, and the Port of Seattle.

The study confirms what many residents already knew.  In our 2009 community surveys, Puget Sound Sage found that sixty percent of neighborhood residents believed pollution from commercial trucks affected the health of their families.  Long-term occupational exposures to high concentrations of diesel exhaust have been linked to respiratory and cardiovascular health problems as well as cancer.

Environmental health researchers in the UW School of Public Health collected data over a two-week period in summer 2012 and winter 2012-2013 on four primary pollutants that serve as markers of traffic-related air pollution, including 1-nitropyrene, nitrogen oxides, black carbon, and particulate matter less than 2.5 μm in diameter. Researchers also compared this data to pollutants measured in residential sites in Queen Anne and Beacon Hill.

For the full report, please visit duwamishdiesel.org

*The mix of cities we highlighted above is a cross section of the estimated 400 municipalities[1] that have some form of inclusionary zoning.  This list was selected in an effort to demonstrate the diversity in population size and real estate development climate of U.S. cities with inclusionary policies.