This week, the American Legislative Exchange Council (ALEC) descends on San Diego, California for its annual meeting of lobbyists and legislators.
In many ways, San Diego is an appropriate setting for ALEC’s conference. Beyond the walls of the Manchester Grand Hyatt, where ALEC members convene under heavy security and behind closed doors, the city known as “America’s Finest” has been a major battleground in the corporate-backed resistance to local control over paid sick days and the minimum wage.
It was at the Association of Chamber of Commerce Executives’ (ACCE) last meeting, held in Washington D.C. in December, where an ALEC task force director claimed that “the biggest threat comes from the local level” when it comes to grassroots efforts to raise the wage and enact paid sick days, and warned that “we are seeing a number of localities that have increased their minimum wage.”
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San Diego is one of them. One year ago, the San Diego City Council voted 6-3 to raise the minimum wage for 172,000 workers to $11.50 by 2017, and to allow at least 279,000 workers to earn paid sick days.
Mayor Kevin Faulconer opposed the measure, but it passed the city council after hundreds of people packed hearings in support. Former basketball star Bill Walton testified in favor of the bill and urged the council to adopt the proposal, which he called “good economics and good public policy.”
Mayor Faulconer, a Republican, vetoed the measure. The city council then overrode the veto.
But corporate members of ALEC were not deterred, and bankrolled a front group to try reversing the law.
San Diego a Line in the Sand
Around the country, local efforts to raise the wage and allow workers to earn paid sick days have been gaining momentum. And this has spooked some of the corporations that fund ALEC and ACCE.
In Republican-controlled states like Michigan or Oklahoma, ALEC and its funders have managed to pass state “preemption” laws that block local control over economic issues. Yet a statewide law is less likely in blue states like California. And national corporate interests decided that San Diego was where they would draw a line in the sand against local wage laws.
Brian Crawford, a national VP of the American Hotel & Lodging Association, described the San Diego strategy at the joint meeting of ACCE and ALEC last December.
Crawford explained that, after the San Diego law was enacted, “we partnered with the Restaurant Association and local hoteliers in San Diego, and put together a coalition called the ‘San Diego Small Business Coalition’ – a really forward-facing, aggressive coalition that went to the media and started talking about the issue.”
The AHLA and California Restaurant Association (through their “San Diego Small Business Coalition” front group) initiated a referendum to postpone the paid sick day and minimum wage measures and put the question on the 2016 ballot. The group used alarmist claims and outright lies to gather signatures, and more than one paid local petitioner for the group was caught on tape claiming that the petition was actually in support of a minimum wage hike.
“We successfully gathered 53,000 signatures, and the City Council was forced to rescind the ordinance,” Crawford boasted to the ACCE/ALEC crowd. Corporate interests have also used the referendum process in San Diego to block the council’s efforts to guarantee affordable housing.
The San Diego Small Business Coalition was headed by Jason Roe, Mayor Faulconer’s political consultant. He made clear that business interests viewed San Diego as a bulwark against grassroots wage campaigns: “They have seen an opportunity in San Diego to stop this that they haven’t had in other cities,” he told BusinessWeek.
Mayor Faulconer will address the ACCE meeting, perhaps because he has shown himself to be a willing ally to the corporate interests that fund ALEC.
ALEC Funders Bankrolled San Diego Anti-Worker Effort
Contributions to the “San Diego Small Business Coalition” from actual San Diego small businesses were “few and far between,” as the San Diego Reader put it. In fact, most of the money came from ALEC funders and their affiliates.
The national AHLA gave $100,000 to the group, and local hotel trade groups added another $70,000. The state and local chapters of ALEC member the National Restaurant Association added a combined $135,000. ALEC member the International Franchise Assocation added another $25,000. The local chapter of the U.S. Chamber of Commerce, another ALEC member, added $152,499.
Nationally, the AHLA—a trade group for the $163 billion hotel industry—has been spinning a $15 minimum wage as “extreme.”
The AHLA also sued Los Angeles when it raised the minimum wage to $15.37 per hour for hotel workers. And it is a major mover behind the “Coalition to Save Local Businesses,” which is encouraging Congress to challenge the National Labor Relations Board’s determination that McDonald’s is a joint employer of franchise employees.
At last December’s ALEC meeting, Crawford compared the industry’s battle against local wage laws to a game of Whack-a-Mole: “We’re trying to beat them down when they pop up.”