Bold: Irvine Dumps $13.34-per-Hour ‘Living Wage’

Great Park Irvine (Joe Wolf / Flickr / CC / Cropped)
Joe Wolf / Flickr / CC / Cropped

The Irvine City Council voted 4 to 1 to begin dumping an eight-year-old “Living Wage” ordinance on Wednesday night that forces most of the city’s thousands of contractors to pay all employees at least $13.34 an hour.

Facing a blossoming scandal over the prior City Council’s supposed squandering of $200 million, mostly on public relations and planning consultants, for its “Great Park,” money is tight in “America’s Safest City.”

Mayor Pro Tem Jeffery Lalloway argued before the vote: “Instead of trying to impose a feel-good wage, we should be protecting the city’s finances and seeking ways to have our economy grow.”

Irvine’s thousands of outside contractors will no longer be required to pay all of their County “employees an hourly rate, comparable health benefits and paid time off (such as vacation, sick, holiday, and jury duty).” The most recent “Living Wage” rate set in July was $10.82 per hour, plus a “benefit factor” mark-up of $2.52 per hour. The city’s “total rate” for a “Living Wage” equaled $13.34 per hour.

Led by former mayor Larry Agran and his fellow-traveler majority, the liberal Irvine City Councils with deep union ties were able to spend with abandon and pursue “pioneering” social justice initiatives, such as one of the nation’s first “Living Wage” ordinances.

According to the National Bureau of Economic Research, a minimum wage hike of 40 percent, like Irvine’s Living Wage rate, can push up wages for unionized workers earning up to twice the minimum wage by between 20 and 40 percent.

The “Living Wage” movement was founded by the economics department of Massachusetts Institute of Technology, whose website states: “The living wage model is an alternative measure of basic needs. It is a market-based approach that draws upon geographically specific expenditure data related to a family’s likely minimum food, child care, health insurance, housing, transportation, and other basic necessities cost.”

The MIT Living Wage Calculator would set the Orange County hourly wage rate for a single wage earner at $14.05; with one dependent at $27.33; with two dependents at $30.89; and with three dependents at $39.33. Annualizing the living wage for a single Orange County breadwinner with three dependents equals $81,806 a year–about twice the $44,888 National Average Wage Index calculated by Social Security.

Agran and all but one of his progressive allies were ousted in a November 2014 election following a preliminary audit of the Great Park that revealed 80 percent of $250 million to build the park had been spent on public relations and planning consultants who often worked for the city on “no-bid” contracts. The 1,300-acre park that was “envisioned” as a rival to New York’s Central Park has only completed 88 acres.

Two investigative reports from an auditing firm and a law firm hired by the City of Irvine made their first joint public presentation at a March 25 City Council meeting.

Having spent 21 months investigating the Great Park project’s less-than-transparent contracts, the Newport Beach-based auditing firm Hagen, Strieff, Newton & Oshiro Accountants found only a fraction of the expenditures had actually been spent on building anything. The Great Park was projected to cost a total of $401 million when it reached full build out, according to the Great Park Design Studio hired in the late 1990s to create a the park’s master plan. But in 2007, the estimate ballooned to $980 million. Three months later, the estimate again jumped to $1.24 billion, the report stated.

The city’s special audit counsel, David Aleshire and Anthony Taylor, said after reviewing the 143-page audit and completing 25 depositions: “We believe there are grounds for legal recovery including contract claims, claims under the False Claims Act, and professional negligence should the Council wish to explore them.”

The City Council will need a second confirming vote to dump the “Living Wage” ordinance. Current contracts that are about to expire over the interim will be extended and then rebid without the Living Wage, at what Councilman Lalloway believes will be significantly lower costs.


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