No Sweat

Did anyone listen to KPFK this morning? If so, then you may have heard Eric Garcetti on Uprising (with my favorite radio host, Sonali Kolhatkar ) talking about the new ordinance passed unanimously by the L.A. city council. This ordinance, called No Sweat, is designed to ensure decent working conditions and at least minimum wage for factory workers in Los Angeles. It is designed to work along with the Responsible Contractors Ordinance to create better, safer working environments for all people living in Los Angeles. After two long years in the making, this proposal was finally passed, making Los Angeles the first major city to pass an ordinance of this nature and will hopefully set an example for other cities in the nation (New York? Where are you?)

31 Replies to “No Sweat”

  1. as a local business owner i can only say “thank god i don’t do any business with the city of helLA”.

    imagine what else they could charge in adddition to my 9% workers comp insurance, 3.5% unemployment insurance, 10% payroll tax, $538.00 yearly inspect my bathrooms fee, $1025.00 yearly garment
    registration fee, 1.5% city tax, 12% state tax, 36% federal tax and god knows what else that i pay in taxes and fees and can’t remember.

    arnold are you listening???????

  2. Michael, dude, you’re not really aruging that you shouldn’t have to provide “decent working conditions and at least minimum wage” for your employees are you? I mean, I feel your pain and wish you all the best, but that doesn’t seem to me like an undue requirement.

  3. 5000, dude. if 1/4 of the companies in helLA paid their entry level laborors what i pay mine and provided them with the 401k plan, vacation, paid holidays and bonus days off it’d be a much better world.

    but, if you think a bunch of bureaucrats sitting around city hall thinking of ways they can charge some more fees and create more headaches for california business is gonna solve anything your gonna have to change your name to 4998. it all sounds so nice but i can’t even start to quote you all the stupid laws that don’t do any damn good that we have to pay for and be inspected for.

    yes, there are a some really bad people out there but instead of creating some idiotic commission (remember the master & slave computer issue in the office of procurement?) to enact some more useless laws with no teeth and waste more of our tax dollars, lets hit people hard when they ABUSE the system and make them pay with JAIL TIME or some SERIOUS fines.

    Who do you think ends up paying for all these silly commsissions and all of their staffs and perks? not the taxpayers. businesses will end up paying for the soon to be enacted “study for a living wage” tax. someones gotta pay for all those peeps on the website.

    there are many laws that protect employees that i fully embrace and as an employer feel it is my duty to provide above and beyond. but we need less government regulation, more enforcement of serious laws and harsher penalties for breaking them.

  4. No sweat about the spelling Michael, and I’m totally not claiming that you mistreat your employees. I would’ve guessed just the opposite even if you hand’t told me. But the only point that Cindy seems to be raising is that the legislation is intended to ensure decent conditions and a minimum wage. I’m very open to the fact that it’s not what it’s cracked up to be, but I’d really like to hear somebody make a case for it, not just the typical “Ah more meddling in my business!” rhetoric. Obviously I’m not familiar with the details of any of this legislation, but I don’t see anything about a commision or new taxes on business in Cindy’s post. I see a reference to two oridnances, passed by the LA City Council, which I assume will be enforced by things like fines if they’re violated. I would very much like to be educated about both sides of the issue before declaring that the bureaucrats are at it again.

    BTW, I was in your building for an opening the other day. It’s totally not where I thought it was. It’s seems like a cool place. I wish there was more stuff down there to buy instead of rent.

  5. yo 5000. no offense was taken by your post.

    here is something to think about. we already have state and federal minmum wage laws that carry some stiff penalties. i’m betting that this commission has NOTHING to do with enforcing minimum wage laws and fair working conditions. we have laws covering such issues. i need to get a copy of their texts!

    since you are looking for some info here’s a good one for ya. did you know that if any of my sub-contactors (sewing shops) are caught not paying their employees or employees overtime i am resposible to make up the shortfall or they will take away my license to do business in this state? even if i pay them a high price to sew the clothing and pay all my employees properly i am resposible for their fuck up. if they decide to skip town i have to pay up or close down.

    welcome to doing business in california. how would you like it if you paid for a shirt at macys and two weeks later the state came after you and said that you owed a persen who sewed the shirt money for overtime that their employer did not pay them?

    sound stupid? that is the law if you are a garment manufacturer. also i have to pay over $1000.00 a year for the privilege of being a part of that system!

    i have a very simple answer for all the people who support anti sweatshop ordinances, BUY MADE IN THE USA. if local manufacturers did not have to produce clothing at “barely above cost” prices to compete with china and stay in business eveyone would get paid more and treated much better. i have some bad news for everyone who shops at the gap, macys, nordstrom, walmart, target, kmart and every other retailer YOU ARE THE PROBLEM BECAUSE YOU BUY CHEAP IMPORTED CLOTHING. truth hurts but it’s the truth. pay more for your clothing and buy made in the USA!!!!!

    we are not in the this situation since our designer is a genius and has such great ideas. we charge a fair price for our clothing and can afford to produce it in california and pay very fair prices to our suppliers and employees.

    trust me the “no sweat” ordinances will only raise taxes and costs, cut employment and drive illegal contractors and manufacturers further underground.

    whew, i’m all tired out from ranting and all…….

    BTW, 5000, we wish there was more for sale down here also. next time your in the building come say “HI” and i’ll introduce you to our child labor pool in the basement!

  6. 5000, did some research and the “no sweat” laws do nothing to insure minimum wage and safe working conditions. simply put, it’s an ordinance that requires any company that provides uniforms to the city to provide “non-poverty” wages and working conditions to their employees. i’ll be curious to see how the city balances getting the best value for our tax dollars and guarantees a “living wage”, whatever that is.

    my issue is this…. how long until the city decides “hey, we’re doing it let’s make everyone provide “a living wage” and who will get to decide what that is.

    as i wrote earlier, raising minimum wages does not affect us because we pay much higher already. it’s just that it’s always a slippery slope with these type of regulations.

  7. This is the kind of thing everyone can agree businesses should do, but is it really the government’s mission to force them to do it? I think market conditions should take care of themselves. If workers are underpaid or treated badly, they can get other jobs; they aren’t slaves. And if employers can get away with low wages or poor working conditions so be it, maybe it helps them compete. Other employers might find better wages and working conditions lead to better workers and better morale, and that helps them compete. I think the government needs to stay out of stuff like this – at the city level, and the state level and the national level. All it does is have weird unintended consequences anyway.

  8. hey michael,
    I don’t know exactly what the ordinance means, but I thought I’d put it out there because it sounds like a good idea. While I understand your concerns, I have to say that it sounds like you know as much about the ordinance as I do. Living wage has already been determined by the state ($6.75/hr) so I don’t think the city could make businesses pay any more than that. Also, I think that while you may be right about the taxes, etc. it’s really hard to say whether or not that’s worth it. Maybe it isn’t to you, but the reality is that if you are making enough to be involved with these factories, or if you own one yourself, then you probably aren’t doing too bad for yourself and can afford to pay the taxes. If not, then that really sucks, and I understand how it could be seen as a lose lose situation, but I’d rather protect the worker than the business (generally speaking). But I do agree with much of what you have said and I hope we can all get informed on the issue. I think it’s important to know what’s going on no matter where you stand on the issue, so thanks for bringing all that up. Ole, on the other hand, sounds like someone who has no idea what they’re talking about but is very passionate about it. Yeah, people that get paid $3 an hour sure have a lot of job opportunities, don’t they? What the hell are you talking about? It’s totally fine if people’s working conditions are sub standard, as long as the company is making more profit. While we’re at it, way not legalize whippings so that when workers aren’t producing enough an hour employers can just beat them until they get production back up? Yeah, dude, you’re so informed.

  9. Ole, you and I are obviously on very different ends of the spectrum when it comes to economic theory.

    >All it does is have weird unintended consequences anyway.

    I think that’s oversimplifying things quite a bit. You’d be hard pressed to argue that Europe’s highly-controlled economies are just a mess of unintended consequences. Especially when we’re watching our dollar fall precipitously compared to their currencies, very much due to pro-business Bush administration policies similar to what you’re championing.

  10. ole. i can’t say that i agree with what you have to say or your solutions. one thing i do agree with is that paying your workers more and treating them with respect buys you a lot of productivity gains and cuts down on your employee turn over rate. besides we’re a reallly small company and i have to look these people in the face everyday! i don’t think you’d be in business very long with that attitude. well actually there are a few people in business who do subscribe to your way of thinking and stay in business.

    cindy. minimum wage is $6.75 an hour. living wage is a $12.00 an hour minimum that people in san francisco have been trying to make law for a long time. i am still trying to locate the text in full so i can understand it better and spot the idiocy to follow.

    why would you think that the city can’t force someone to pay more than minimum wage to receive a city contract? they force garment manufacturers to pay reparations to other companies employees.

    it’s great and all that you support the worker over the business but what happens when your support for the worker becomes more than the market can bare and i close my company and let my seven employees go? then of course there are the 60-70 people that my sub contractors employ that lose their jobs. then lets deduct all the wages (mine included) that dissapear and are no longer spent in the local economy. next lets tally the unemployment insurance costs that come out of the state budget.

    i’d be careful about supporting labor to the tune of jobs dissapearing.

  11. 5000. be careful with the europe comparisons. they are a mess over there. slow growth, super high enemployment(i beleive over 10% in germany, france & england), big inflation, stagnant wages, high taxes, massive deficits that as a % of GDP make ours look tiny. you think bush spends money, hell they know how to run up a debt!

    the european union is even starting to talk about buying dollars so that the euro will drop and their exports will be affordable again. the dollar dropping has been the best thing to happen in our economy for a long time. it was way to high for to long!

    in addition they have discovered that they can no longer afford the very generous social benefits and are starting to cut them back towards the levels of government support that we have. why do you think all those french people keep blocking the highways and shutting paris down.

    i’ll let you sit down with the europeans i do business with and they’ll fill you in on whats really going on.

    they wish their economies were anywhere near as strong as ours. of course everyone here thinks ours is so bad.

    grass is always greener!

  12. Michael,
    Like I said, I don’t know exactly what this bill is. I just thought it was an interesting thing to post. The problem lies (if you ask me) in the capitalist system in our country. Small businesses like yours should be exempt from many of the taxes and b.s. you have to pay right now, but not from paying your employees decent wages. And I understand that the city could raise the wages on their contracts, but the question is whether or not they would be that stupid (maybe, maybe not). If they did that I think they know that they would only do harm. If, however, asking a business to pay their employees minimum wage is too much to ask, then they shouldn’t be in business. I agree completely with your idea to buy American, and believe me I do. But like you said, you offer your employees good pay and benefits and you’re not going under. I’m not saying it’s your fault AT ALL, especially because you are a small business and trust me, I know what that’s like (I own one myself, and my husband is a teeshirt designer for one as well). I think the problems lie in big corporations, and I’d like to hope that’s who this ordinance is going after. But who knows? Let me know what you find.

  13. Read everyone’s comments with interest. Since I have been working on this legislation for two years, let me clear a few things up:

    1) this does not create a new bureaucracy or impose new fines on companies

    2) this simply makes the city move its money to good companies, not bad ones. In other words, when a company cannot show that it does not pay sweatshop wages (in this case in Los Angeles, about $4-$5 an hour, which is below the legal minimum wage, forget about a living wage), we take our business elsewhere. This actually encourages buying American and protects the good companies like yours, Michael, from being undercut.

    3) I’m all for getting government out of the way of business where it is acting morally. I’ve been in Sacramento lobbying for lower workers comp fees and this coming week, the plan that I put forward with Wendy Greuel to lower our gross (in more ways than one) reciepts tax will be voted on in budget committee and the full city council, so we could use everyone’s support. It has the backing of every business group and chamber as well as labor, and it makes Los Angeles much more business-friendly, abolishing, among other reductions, any business tax at all for 60% of local businesses.

    4) A good anti-sweatshop ordinance is all about using the power of the marketplace to improve the condition of workers. We could probably save a lot of taxpayer money by doing all of our IT work in India, but this doesn’t seem to be a reponsible use of taxpayer money. Neither does using taxpayer money to subsidize sweatshops.

    5) We plan to be part of a national consortium (no cost to taxpayer) sharing information about the good and bad companies locally and abroad to increase the impact of buying decisions by making them collectively with other cities.

    Thanks for everyone’s interest. Feel free to contact my deputy Josh Kamensky if you are interested in more information ([email protected])

    And if you are interested in ways to help local businesses, check out this document: 11 ways to help local businesses. http://www.lacity.org/council/cd13/pdf/11_things_to_do_for_LA_business_in_2004.pdf

    I’d love to hear people’s suggestions for ways to help small businesses in particular as I am co-chairing a new Small and Local Business Advisory Committee for the city.

    EG

  14. >i’ll let you sit down with the europeans i do business with
    >and they’ll fill you in on whats really going on.

    Thanks Michael. I’ve got a degree in economics, so I think I have a pretty good idea about it already. :)

    I think Eric sums up my entire philosophy nicely:

    > I’m all for getting government out of the way of business where it is acting morally

    I’d love to believe that most companies treat their employees as well as you do, Michael, but history just doesn’t bear it out. Look at all the stuff about Electronic Arts that’s been floating around the net the last few days. I wish they were all like you, though!

    >the plan that I put forward with Wendy Greuel to lower our gross (in more ways than one) reciepts tax will
    >be voted on in budget committee and the full city council, so we could use everyone’s support.

    Thanks for the information Eric. What exactly would you like to see? Just good wishes or is there action that supporters can take to help?

  15. To add to Eric’s list, alongside the no-sweat ordinance, we amended the responsible contractor ordinance to eliminate the 14-day waiting period to contract with the City of Los Angeles. The waiting period was put in to allow for a period in which to raise objections to businesses with a bad history, but since the names of bidders are available well in advance of the contract, we felt the waiting period was superfluous.

    As long as businesses obey the law, this ordinance makes life better: it makes contracting with the city faster and it makes it so you don’t have to compete with people who lower their costs by skirting the law.

    As far as business tax reform: email your councilmember (via this page: http://www.lacity.org/council.htm or just [counilmember’slastname]@council.lacity.org) and ask him or her to support business tax reform, please!

  16. Thanks everyone for the info. I really appreciate Eric Garcetti coming on here and straightening it out for us. Keep us posted on how it all works out!
    Cindy

  17. eric,
    i see your name quite often and hear many good things about you from this blogging community. it is rare to have direct interaction with local representatives! i applaud your involvement and interest in what everyone has to say.

    as for the ordinance. i’m shocked that the city actually did business with sub-minimum wage shops! i hope i can use that as a reference if one of the shops i use ever gets in trouble and i need to show how difficult it is to monitor a sub contractor:-)

    thanks for your tireless work on lowering workers comp rates and trying to cut fraud out of the system. our rate dropped from 9.63% to 8.71% this year. considering i’ve never had a claim in three years i am inclined to think it should be much lower. but, for now i’ll take what i got and thank you again.

    i’d really enjoy hearing your take on manufactuers such as myself being responsible for sub contractors employees payroll deficiencies. every day i open my doors it’s like having a gun to my head and the threat of being closed down or paying large penalties because someone else mistreated their employees.

    i’ll take a look at the links and post comments after i have absorbed the information.

    many of my complaints do not apply directly to my company. as i said previously i am in a very unique position. but, that may not last forever. as a business owner i worry about the general business climate and the out right hostility directed towards “corporations” in the state of california. i may be small but i am a “coporporation” and would someday like to be a larger “corporation”. our new govenor seems to understand that a favorable business climate in which government encourages growth, protects the basic rights of workers and the basic rights of business to do business is best for our state.

    maybe i should attend some of your meetings and throw in my .02 where can i find that information?

    thanks again eric!

    P.S. 5000, i defer to your economics degree.

  18. >i’d really enjoy hearing your take on manufactuers such as myself being
    >responsible for sub contractors employees payroll deficiencies. every day i open my
    >doors it’s like having a gun to my head and the threat of being closed down or paying
    >large penalties because someone else mistreated their employees.

    I’d like to hear it as well. I’m not familiar with the law, but from what Michael describes it doesn’t seem to make much sense. Hell, that’s an understatement. It’s crazy. I can’t think of any other industries that are held to a standard like that, but of course I’m probably not informed. Obviously it grew out of a desire to stop sweat shop labor, but I just can’t see the logical progression from that to holding somebody like Michael accountable without proof that they were complicit. I suppose I should go Google it.

    Also, I just wanted mention that it’s nice to have you as a devil’s advocate Michael. I think it’s easy for people to forget that all the cool small business owners they might know are as affected, or more affected, by these sorts of things as, I don’t know, The Gap?

  19. 5000, thanks for your support.

    is that not the craziest law or what? i have friends who had shops that sewed their clothing for years just close up and dissapear or get caught not paying proper over-time and the state shows up at my friends door and says here are your options.

    1. you can either pay a % of the employees wages due based on the % of the total business you did with that shop. if you’re 10% of the shops business you pay 10% of the back wages due.

    2. we will, seize and hold all your goods that are in that shop until you help pay the back wages.

    3. if you don’t pay we will revoke your license to do business in the state of california.

    absolute truth. i am friends with these people, this is not word of mouth stuff.

    the only way that you can even hope to not have to pay is if you hire a lawyer to go from shop to shop every month and audit their payroll and head off problems before the state finds them. in most cases even hiring a lawyer to cover your ass and signing specific contracts with the shops that detail all the laws they must follow will do you no good. the state takes the path of least resistance and holds your license or product hostage.

    these rules do not apply to any other california industry, only the garment industry. nice of the state to decide “since we can’t police the problem we’ll just make someone else pay for it” intead of punishing the illegal shop owners.

    now you know why we all run for cover whenever the state gets involved with a new program to “save the worker”

  20. here’s the real story of what “NO SWEAT” is. the ordinance requires that all garment contracts over $25,000.00 with the city of los angeles must show that all employees of the manufacturer and the sub-contactors must be paid a minimum of $9.04 (a living wage) an hour excluding health benefits.

    the estimated increase on existing contracts is $20,000-$70,000 of our tax dollars.

    cindy, i think you mentioned something about the city not being able to force people to pay higher than minimum wage?

    within 5 years there will be a living wage requirement imposed on all garment companies in the state.

    you heard it here first…..

  21. Michael,
    I never said that the city couldn’t force a living wage. I said I didn’t know what they could do. And can you explain how this takes our tax dollars and why? Because I don’t understand, and you didn’t really explain it.

  22. your quote:
    “Living wage has already been determined by the state ($6.75/hr) so I don’t think the city could make businesses pay any more that”.

    my response? unless i am way off base……
    this ordinance require that you and your sub contractors pay at least $9.04 an hour to receive a city uniform contract. if you don’t you are fined $1000.00 or 20% of the contract.

    what’s it gonna cost us the taxpayers?

    $100,000.00 to $120,000.00 minimum

    there is an estimated $50,000.00 to $70,000.00 in additional costs that will have to be added to new contracts so that the contractors can afford to pay their employees the living wage for the same work they may have done last year. in addition, the city is paying a company $50,000.00 to monitor companies that submit bids to insure they are compliant with the wage minimums. if it’s coming out of our stretched budgets who is it going to be taken from? it it’s not coming from existing program cuts…….. cindy, you do the math.

    this ordinance has nothing to do with enforcing “decent” working conditions or enforcing minimum wage laws. it’s the first step towards the living wage law.

    why do i car about this? it does not affect me or my company. i don’t make uniforms and i already pay more for entry level postions than $9.04. i worry about where ordinances like this will lead us. and, i know a precedent when i see one. this is just the first step to new, broader reaching legislation. give it a few years and we’ll talk!

    but, our elected officials passed this and it must be what the people want. who am i to whine?

    eric, josh. if i am in error reporting any of the facts i would appreciate your wisdom. i am quoting from a newspaper article not the complete text.

  23. Michael>i worry about where ordinances like this will lead us. and, i know a precedent when i see one. this is just the first step to new, broader reaching legislation.

    I don’t see why this is anymore outrageous then the current minimum wage issues we have now. Everyone seemed to think Ole was insane for thinking there should not be a minium wage but I agree with him. Minimum wages impose a false inflation on the value of the work or services provided by a person. This inflation leads to additional inflations through out the market for any buisness that must pay the false inflation. This causes products and services to be more expensive where the end consumer pays tax of this inflation. Since everyone is a consumer, that person who gets paid the inflated minimum wage pays for it in the end when they purchase anything produced using that minimum wage.
    The once nice thing about these inflated minimum wages is that the government gets to tax people more on their increased minimum, and tax more on their inflated purchases.
    This doesn’t apply to michael since he has already integrated higher salary’s into his buisness model, he has determined his employee’s “value”, and pays them according to that.
    Then again, I don’t see the minimum wage laws going away anytime soon. So I guess it really doesn’t matter now does it? :)

  24. sean, i agree with you completely. what you wrote makes absolute sense. but, it ain’t happening anytime soon.

    to answer your question. “why is this more outrageous than current minimum wage laws”. it’s not! and, it seems silly that i would argue against one but not the other. think of it this way, “we lost the war but are still fighting the battle”

  25. Minimum wage in neccessary so people don’t take advantage of their employees. If we didn’t have work related laws people would still be working 7 day weeks for shit money and we’d be making even bigger businesses out of the ones we already have. So yeah, for small businesses it sucks, and maybe it’s tough, but have YOU got a better idea to protect the unskilled worker? And Michael, quoting me only proved my point further. I NEVER said that the city couldn’t make businesses pay more than minimum wage, I said I didn’t think they could. Now I know. I just cannot believe you are arguing against something so neccessary as minimum wage. I’ve given you the benefit of the doubt and I even agree with some of what you’ve said, but I think it’s pretty obvious that you are only thinking about small businesses and NOT the bigger picture. There are bad people out there that will take advantage of their workers without these laws, and that is why these laws are there. And that is what the people want. So complain all you want, but that’s how it is.

  26. Cindy>There are bad people out there that will take advantage of their workers without these laws, and that is why these laws are there.

    Bad people and bad companies are going to pay people less then minimum wage with or without the law. For the big companies they simply out source it other cheap labor countries (Nike/Gap/etc.). The bad small companies will just ignore the law and pay people under the table to ignore the minimum wage, and ingore taxes.

    A minimum wage does little to guarentee safe or good work conditions, or work schedule. It just inflates the value of a salary.

    Laws and government’s role should be to protect people, and their freedom. Like Michael said earlier, you should be preventing abuse by punishing the abusers. How much money you get paid has little to do with your rights as a worker or your working conditions.

    To assume that the bottom up approach will help prevent big corporations from doing bad things is not practical. Large corporations have the money to react to these changes by moving out of state, or out of country. If you really want to change big corporations the politicians need to start revoking corporate charters so that corporations understand their is backlash to their social abuses. Until you add the threat of death to corporation they can continue to operate in the most efficient manner to aid the bottom line, even if it results in them breaking laws.

    Though, like you said this is what people want, then again look who “the people” wanted for president.

  27. Cheap shot with the president comment, and let’s talk about reality for a second. There is no way the government will start revoking charters because that would be bad for the state. So the next best thing is what we have. If you really want to get to the root of the problem, then you’d have to completely rework the system, but since we can’t (or won’t) do that we have to take what we can get. And by the way, California, the state in question, voted for Kerry.

  28. cindy. i wish minimum wage protected employees from being taken advantage of. there are many ways one can be taken advantage of while being paid a minimum of $6.75 an hour.

    if they did abolish minimum wage rules i’d still be paying the same wages i pay now. i have well trained, qualified, reliable employees and good ones are hard to come by. without them it would be much more difficult to make my deliveries. without my deliveries i have no business. i’m not for abolishing minimum wage laws but there is some logic to it.

    cindy, whether you agree with sean or think he is a robber baron you have to admit he has a better understanding of the entire economic picture relating to these issues than both of us combined.

  29. Cindy, yes I am sorry about the low blow on the president comment.

    I don’t think my idea’s should be looked at as trying to take advantage of people (ala robber baron). Workers require and deserve protections to ensure they are not abused, I just think the government is not good at this. Labour unions, workers associations, and guilds are a more effective and efficient at protecting the interests of workers. They also do it without a tax to the system by making things mandatory by law etc.

    I think we can all agree to disagree, I know my ideas are not part of the general populations political mind trust. That doesn’t keep me from believing in them, or hoping others start to believe them. There is no intended harm in this, just thinking that the government’s role in our life should be greatly different then it is now.

  30. Sean, I do agree with you, but all I’m saying is that this is what we have, and it’s not the best, but it does do SOMETHING. Anyway, is anyone else getting tired of posting on this issue. This is my last, no hard feelings. Thanks for the ideas.

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