Pay-Raise Activists Buoyed by Growing Support From Big Foundations

Celia Talavera’s day starts just after sunrise in the cramped bungalow in suburban Inglewood that

she shares with her husband, her two school-age children, and two other relatives newly arrived from her native Mexico. After breakfast, she takes the first of three buses to work, arriving at the Loews Santa Monica Beach Hotel an hour later to work a day shift as a housekeeper.

The hotel she works in is one of many in this seaside resort that charges $200 or more per day for a room. Two-bedroom apartments nearby cost around $2,000 per month, more than twice what she pays in Inglewood. “I’d love to live in Santa Monica,” says Ms. Talavera, 42. “I’d be closer to work and I’d live in a better neighborhood.”

But Ms. Talavera says she and most of the tourist district’s 2,500 workers can’t afford to live here, or earn their way out of poverty.

That concern has prompted Ms. Talavera and hundreds of other workers to join labor-union organizers, church groups, and nonprofit activists in fighting for a so-called living wage of at least $10.50 per hour for employees in Santa Monica’s tourist district. Her hourly pay of $9.88 — nearly $5 more than the federal minimum wage — might not seem all that low until one considers the cost of living in this seaside resort. Controversial legislation that would require the higher wage was forced to a November referendum vote by opponents — primarily hotel owners and the local Chamber of Commerce — who say the measure discriminates against employers in one section of the city.

Such a law would be only the second minimum wage-raising measure of the more than 80 passed nationwide since 1988 to affect employers who don’t hold contracts with governments. Concern that more and more cities could force private employers to pay higher wages has drawn the attention of a handful of national corporations to Santa Monica’s battle.

Faced with deep-pocketed adversaries from the businesses that depend on low-wage labor, activists here and elsewhere hope they have found a new ally in their quest for wage laws to help the working poor: foundations.

Motivated by a growing wage gap between the rich and poor, the effects of the 1996 welfare overhaul, and a federal hourly minimum wage that has remained the same since 1997, some big foundations are supporting advocacy groups that seek to change policies affecting the working poor.

While many big foundations have long sought to reduce poverty, few had previously made substantial commitments to movements aimed at increasing wages. In the past, activists say, they could not persuade many big foundations to do more than support studies of poverty issues. The reason, speculate some grass-roots leaders and grant makers, is that foundations are nervous about getting involved in controversial political issues.

Among the foundations that have begun to support living-wage groups:

• The Rockefeller Foundation, in New York, has put nearly $1-million over the past two years into supporting local organizing groups linked to the living-wage movement. Previously, the foundation made virtually no grants to help local advocacy groups, and emphasized supporting groups that were studying and influencing welfare policies. Says Katherine McFate, associate director of the Rockefeller Foundation’s Working Communities Initiative: “You have to look at the root causes of poverty. And there’s no question that low state and federal minimum wages are at the root of working poverty.”
• The Charles Stewart Mott Foundation, in Flint, Mich., has granted $720,000 in the past three years for living-wage organizing efforts.
• The Ford Foundation, in New York, has provided $1-million over the past three years to groups that work for higher wages for the poor. Last year it awarded $100,000 to the Los Angeles Alliance for a New Economy, which was formed by a local hotel and restaurant employees’ union in 1993 and has succeeded in winning living-wage ordinances in Los Angeles and Los Angeles County. The alliance last year donated $92,000 to Santa Monicans for Responsible Tourism, the nonprofit group leading the fight for higher wages. That amount accounts for more than half of the $140,000 that the Santa Monica group raised.

Some of those foundations make their grants to smaller organizations, such as the Liberty Hill Foundation, in Santa Monica, which then distribute the money to organizations that work to raise the wage floor for the poor. That indirect way of making grants might insulate large foundations from critics, such as employers who may be subject to higher-wage laws, who complain that foundations are giving money directly to political groups, says Madeline Janis-Aparicio, executive director of the Los Angeles Alliance for a New Economy.

Alexander Wilde, a Ford spokesman, counters that large foundations make such grants not out of fear that they would be perceived as political, but because local grantees understand neighborhood issues better than grant makers.

“We don’t choose the issue,” says Mr. Wilde. “We choose the people who choose the issue.”

Lance Lindblom, a former program officer at Ford and now the president of the Nathan Cummings Foundation, a grant maker in New York that gave $500,000 last year to groups working on the living-wage cause, disagrees.

Many business leaders who serve as foundation trustees bristle at the idea of higher-wage laws or involvement in causes that may be considered political, Mr. Lindblom says. “If you’re going to deal with poverty issues, you’re going to have to confront economic interests,” Mr. Lindblom says. “Some of those interests are on foundations’ boards. That doesn’t mean foundations can’t transcend them.”

But many activists are skeptical about whether mainstream foundations will be able to do that in the long term. “We met with Ford in February and tried to convince them of our need for more organizers,” says Jen Kern, director of the Living Wage Resource Center of the Association of Community Organizations for Reform Now, in Boston. The group has led 10 of the more than 80 successful local living-wage campaigns.

“They said it was good to hear about the issue, but that’s about it. My thought was, why are they being so cautious when the need for help is so obvious, and our rate of success is so high?” Ms. Kern says.

Here in this sun-drenched city of 90,000 people, the disparity between rich and poor couldn’t be more pronounced. With its gleaming new hotels, a recreation pier, and palm-tree dotted parks under azure skies, Santa Monica’s coastal zone is a veritable postcard come to life. But under many of those trees are knapsacks and battered grocery carts, and hundreds of their homeless owners.

The proposed Santa Monica ordinance was backed by voters in a 2001 election. The City Council passed legislation requiring the wage rise in July. But a petition drive led by businesses prompted a second referendum, which will take place this November.

Opponents of the measure say it will increase costs to businesses and customers. Activists counter that the wage law would guarantee that workers benefit from the $185-million in government subsidies given to businesses to improve the tourist areas.

Most wage laws don’t include private businesses that aren’t engaged in contracts with the city. Activists speculate that the Santa Monica measure’s inclusion of businesses that aren’t government contractors has prompted national corporations, such as U.S. Bank, in Minneapolis, and 7-Eleven, in Dallas, to join hotels, restaurants, and the Santa Monica Chamber of Commerce in raising $427,000 to fight the effort.

Although money from national companies has been welcomed by critics of the wage law, they haven’t been so happy about national foundations supporting those pushing the wage measure.

“Activists are selling this movement like it’s some kind of little, innocuous local thing,” says John Doyle, spokesman for the Employment Policies Institute, a think tank in Washington that is financed by food-service companies, restaurants, and the hotel industry. “That’s sheer hypocrisy.”

Mr. Doyle contends that Ford and other foundations are being duped into helping spread a union-building movement across the country.

But Mr. Wilde, of the Ford Foundation, says the grant maker thoroughly checks all groups it supports. “We’ve seen no indications of activities we would find troublesome,” he says.

Should the referendum vote pass in Santa Monica this fall, activists say they expect a court contest. And they are prepared to continue the battle. Leery of foundations’ willingness to get entangled in a controversy, they wonder how much continued support to expect.

“They might fund you in your advocacy,” says Vivian Rothstein, director of Santa Monicans for Responsible Tourism. “But when the stuff hits the fan and the other side hits back, will foundations be there?”

Mr. Wilde says his foundation doesn’t shy away from helping groups pursue court action. “We’ve been willing to support litigation under certain circumstances,” he says. “As a matter of principle, we don’t shrink from groups who have litigation strategies.”