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Originally published October 31, 2013 at 8:55 PM | Page modified November 1, 2013 at 8:57 AM

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Editor’s note: The Seattle Times investigates the claims of politicians, public officials and other newsmakers.

$2.5M to enforce SeaTac 'living wage' law? Figures in ad 'way on high end'

Truth Needle: Opponents of SeaTac Proposition 1 claim that enforcing a $15 minimum wage would cost the city $2.5 million. Besides being vague — it refers to potential costs over five years — that figure appears based on exaggerated estimates.


Seattle Times business reporter

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The claim: A television ad by opponents of SeaTac Proposition 1 contends that the ballot measure to create a $15-an-hour minimum wage for airport-related workers would cost the city about $2.5 million to enforce.

The 30-second spot, “Safe Neighborhoods,” features a SeaTac resident who warns that Prop. 1 would mean either tax increases or cutbacks for “important priorities” such as public safety and parks.

“SeaTac is one of the last great affordable places to live, and I want to help keep it that way,” she tells viewers against the backdrop of a playground. “So I’m voting no on Proposition 1 — because one person’s pay raise shouldn’t come at everyone else’s expense.”

What we found: Mostly false.

This ad refers to a study done by a global consulting firm, Cardno, for Common Sense SeaTac, a business-backed political committee opposed to Prop. 1.

The ad fails to mention that Cardno’s estimate for Prop. 1 enforcement costs covers a five-year period. What’s more, the study seems to use exaggerated estimates of the number of city workers needed to oversee the measure.

Cardno says it looked at other cities with experience at administering and enforcing so-called living-wage ordinances and found that SeaTac probably would need at least four employees, or full-time equivalents (FTEs), at a cost of $150,000 each (salary and benefits), to implement Prop. 1 next year.

The projected number of FTEs would decline to three in 2015, at a cost of $160,000 each, followed by 2.5 FTEs in 2016 and beyond, for a “best-case scenario” of $2.5 million over five years.

Cardno’s “worst-case scenario” assumes more complaints and difficulties with implementation, requiring as many as six FTEs upfront. It puts the five-year cost at $3.4 million.

In reality, more than 120 cities nationwide have enacted living-wage ordinances since the 1990s, and most require only one FTE — if that — for enforcement.

So says Stephanie Luce, an associate professor of labor studies at the City University of New York, who has studied the implementation of living-wage ordinances for the past 15 years.

“Generally, that work is assigned to someone who does other work, and maybe they spend 20 percent of their time on the living-wage ordinance,” Luce said. “It’s rare for a city to have one full-time person (exclusively) doing living-wage enforcement. To hire four or five full-time staff seems excessive, and no city is doing that.”

SeaTac Prop. 1’s $15-an-hour minimum wage would apply to an estimated 6,300 hospitality and transportation workers at 72 airport-related businesses.

Affected employers also would be required to provide paid sick leave, offer part-time workers more hours before hiring additional part-timers, and retain employees for at least three months after an ownership change. The rules can be waived in a union contract.

The measure says workers who believe their employer has violated the ordinance may sue in King County Superior Court, seeking lost pay and damages, plus attorney’s fees and other expenses.

Prop. 1 provides no funding mechanism and says the city of SeaTac “shall adopt auditing procedures” to ensure compliance. It also allows workers to complain to the city attorney, who may then investigate and initiate legal action or another possible remedy. “However,” it says, “the City Attorney is not obligated” to do so.

Supporters of Prop. 1, organized as Yes! for SeaTac, contend its costs would be minimal — requiring no more than the time it takes for an employee to survey some 70 businesses each year.

“The city of SeaTac is just the record-keeper, which can be completely done online nowadays,” said spokeswoman Heather Weiner.

Opponents disagree, saying the measure poses all sorts of hidden costs. Gary Smith, a spokesman for Common Sense SeaTac, which paid for both the “Safe Neighborhoods” ad and the Cardno study, warns that workers would complain to the city rather than hire a lawyer to sue on their behalf.

“The city has no idea what it’s getting into,” Smith said. “It’s going to get some complaints, and it will have to evaluate these complaints. It’s just not true that it’s going to be free.”

Cardno used as its benchmark San Jose, Calif., where one city worker actively monitors and enforces a living-wage ordinance at the airport.

Cardno’s estimate assumes SeaTac will devote one FTE from its legal staff to investigate and adjudicate complaints and one FTE from its information-technology department to create and maintain an online database (although eventually it believes the IT work will decline to 0.5 FTE). In all, Cardno predicts a permanent need for 2.5 FTEs.

Cardno says Prop. 1 requires a “significantly greater scope of tasks” compared with San Jose — in particular, additional auditing requirements for the rule about giving more hours to part-timers, which is unique to SeaTac.

Luce, the professor, described Cardno’s estimates as “way on the high end.” She noted that cities with strong enforcement tend to rely on citizen advisory boards to help with the workload, something SeaTac might try.

“In a good-case scenario, you’ll have a half-time FTE who’ll be the point person on this, and that person will then coordinate a citizen advisory board,” she said.

In any case, living-wage ordinances typically do not generate a lot of complaints, or at least not as many as Cardno’s study seems to assume, Luce said.

“There is a little confusion upfront, but once you get the contractors and employers on board, then it’s just dealing with the occasional bad apple,” she said.

Because the ad highlights a cost estimate that is based on extreme assumptions, and because it fails to mention that the $2.5 million figure is a five-year projection, we find it mostly false.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com. On Twitter: @amyemartinez



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