Welfare to exploitation: City cheats workers out of minimum wage in order to balance its budget

San Francisco's new minimum-wage ordinance is supposed to provide a living wage for the city's poorest workers. But one cash-strapped city department is openly skirting the law.

A coalition of workers and activists is charging that the city isn't paying some of its neediest employees – those in the welfare-to-work programs – the minimum wage of $8.50 an hour, which went into effect Feb. 23. The welfare-to-work programs are administered by the Department of Human Services, where workers and supporters rallied June 9 and accused DHS of breaking the law.

"The city is balancing the budget on the backs of the poor," JoAnn Sanders from People Organized to Win Employment Rights (POWER) said. "The city is using tricky bookkeeping to claim that they've raised our wages – when in fact our checks have stayed exactly the same."

In fact, a Feb. 11 notice given to welfare-to-work participants shows workers' weekly wages have actually decreased under a new DHS policy. The notice states, "This is to inform you that as of February 23, 2004, there will be changes in the Community Jobs Program (CJP) for the hourly wage paid and the number of hours per week for which wages will be paid. The change is because CJP will pay San Francisco's minimum wage.... As of February 23, you will be paid $8.50 per hour for 25 hours per week of your 32-hour per week.... Although you will not be paid for 7 hours per week of CJP activity, you are expected to participate in them" [report's emphasis].

DHS doesn't dispute these facts. DHS administrative analyst Hope Kamimoto told the Bay Guardian that until the new minimum-wage law went into effect, workers were paid for all 32 hours, for a paycheck of $216 per week. Under DHS's new policy, workers receive only $212.50 a week. And those unpaid seven hours aren't voluntary: they're mandated for workers to remain eligible for the DHS program.

Kamimoto acknowledged DHS's policy shift put less money in needy workers' pockets per month but defended the department's decision. "This is a transitional employment program," she said. "It's not meant to be the job for them to get off welfare. Training is not providing economic benefit to someone else – and therefore, it's not subject to the minimum-wage requirement.... The total amount of our budget didn't change and didn't allow us to do otherwise.... At least this wage is a better opportunity than they could otherwise have."

That doesn't fly with some lawyers, workers, and community activists. "This, to me, is dangerous legal ground for the city, because they're recategorizing [hours] as unpaid job training all of a sudden just to make the dollar amount pay out the same," Bay Area Legal Aid staff attorney Stephen Bingham charged. "It's disingenuous at best.... Mandatory on-the-job training is considered employment under labor law."

"The budget issue is just an effort to manipulate the situation," said Julie Browne of POWER. "The [minimum-wage] ordinance clearly spells out that San Francisco as a city must use its General Fund to supplement where other funds fall short for ensuring people like single moms meet the standard of living in San Francisco. Our question to DHS is why they're not asking for that money, why they're not advocating for their workers."

Kamimoto told us she was unaware of any DHS effort to approach officials working on next year's budget for additional funds to pay workers for the seven hours cut under the new policy. "There was a sense that the state was having a hard time, and the city was running a deficit, and the General Fund becomes more difficult to ask for," she said.

"The fundamental issue is equality. Our work and our time needs to be valued," Browne said. "You're talking 80 percent people of color and over 50 percent African American single mothers who are affected by this. The reality is the voters have spoken and said that this law is meant to apply to all workers, and especially women on welfare-to-work programs, who are some of the hardest working and poorest."

Wage activists believe the DHS case isn't an isolated incident. "The new minimum-wage law is being broken left and right," said Fei Yi Chen of the Chinese Progressive Association, whose family members are affected by minimum-wage law. "To make this law reality, the city needs to put real resources into both publicizing the minimum-wage increase and holding employers accountable."

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