‘Gravy Train’ a Bitter Myth for Many Public Workers

A Los Angeles doctor earns a meager $10,000 annually, forcing him to turn to food stamps to feed his family.

An attorney working nearby makes thousands of dollars less than the lawyers he supervises because his salary is paid by a different entity. And, miles away, there labors a library aide who receives no health benefits to pay for her arthritis treatments because she is a part-time employee.

Three victims of a profit-driven company’s increasing reliance on temporary employees and novel labor arrangements?

Wrong.

All three people work for Los Angeles County and, like their low-wage counterparts across the country, they are one of local government’s dirty little secrets. They also are caught in the middle of a tug of war over American government’s role at the end of the 20th century.

Although the vast majority of public employees still hold steady, and at times cushy, jobs--after all, Linda Tripp just got a raise--government agencies from Baltimore to Seattle for years have kept some workers’ salaries low and dodged paying their benefits with the agility of a downsizing corporation.

“It’s a very, very common pattern,” said Dennis Dresang, a professor of political science at the University of Wisconsin. “Government is supposed to be the model employer, but that runs straight into concerns about finances.”

With local coffers flush from the nation’s economic expansion, cities and counties across the country are expanding health benefits to cover domestic partners and upping salaries at the urging of labor groups demanding a so-called living wage, usually tied to the amount required to keep a small family off public assistance.

Not only do these laws potentially lead to raises for employees of the hundreds of companies that contract with government, but in some cases they also can boost the pay of public workers who, because of local government’s unusual labor arrangements, have been underpaid for years.

But that push, a revival of the old-fashioned notion of government as a progressive employer, has run smack into another vision of government embodied by the cost-cutting legacies of the Reagan revolution.

In Los Angeles County, the situation was worsened by Proposition 13 in the 1970s and a property tax shift to the state 20 years later, which sapped county coffers, coupled with scandals over abuse of the county’s pension fund.

Robert Shiell is one of those on the receiving end of that legacy.

An attorney, Shiell has represented county social workers in child abuse cases for 12 years. He manages a group of lawyers from the county counsel’s office who receive county pay, a county pension and Civil Service protection.

But Shiell technically works for a nonprofit organization called Auxiliary Legal Services, which is funded by the county counsel’s office.

Formed in the late 1980s, when caseloads were rising and funds were scarce, the organization pays its employees as much as $30,000 per year less than county lawyers and provides them neither pensions nor Civil Service protection.

Ironically, a county analysis in 1992 determined that Auxiliary Legal Services was still as pricey as full county counsel, and a later audit found that costs are raised by the need to replace the many Auxiliary attorneys who abandon the counsel’s office for better-paying jobs.

Shiell and several of his colleagues have filed two lawsuits against the county. The first alleges that the use of Auxiliary Legal Services is an illegal scheme to deprive them of equitable pay, the second that the organization discriminates against women, who make up 70% of its employees. By comparison, 70% of the higher-paid county counsel’s employees are men.

“We’re supposed to be upholders of the law. We should be setting an example, rather than engaging in questionable practices,” Shiell said.

The new county counsel, Lloyd W. Pellman, who says he was not involved in the creation of Auxiliary Legal Services, is shifting away from the organization, creating 179 new positions in his office to absorb Auxiliary attorneys and support staff.

But he defended the existing arrangement as a legal contract and said a disproportionate number of Auxiliary employees are women simply because more women have applied for jobs since the organization was created.

Similar Pacts Elsewhere

The arrangement is not unique to Los Angeles County, said David Stobaugh, the attorney handling the suits against the county, though he said he had never seen an arrangement that, to him, appeared as blatantly discriminatory.

Stobaugh’s Seattle-based firm reached multimillion-dollar settlements with the governments of Seattle and King County, Wash., over similar practices. He said other government agencies rely on “shell” corporations to keep pay low and their books looking tight.

“I don’t think anyone ever said the Los Angeles County counsel’s office would have a two-tiered system,” he said, “and one class would do the same work for less pay. I don’t think there was an up or down vote [by the supervisors] on that.”

One of Stobaugh’s firm’s earliest cases was against Seattle, which had classified many of its janitors as “temporary” employees and denied them benefits even though some had worked for the city for 17 years. He settled that case in 1989 for about $10 million.

King County government used a similar tactic to keep more than 5,000 employees--from park workers to contract negotiators--classified as temporary, without vacation pay or health insurance. Stobaugh’s firm settled a class action suit against the county for $24 million.

School districts from Baltimore to Santa Monica frequently list crossing guards, cafeteria workers and teacher’s aides as part-time and deny them benefits, union leaders say.

Teacher’s aides in the Los Angeles Unified School District only received benefits after unionizing earlier this decade. After being pushed by community groups, Maryland state government has only now begun to reverse a policy begun when it dropped more than 6,000 workers from its payroll only to hire them back as contract labor for less pay.

Experts say governments across the country have been holding down salaries and benefits through a variety of means--from the use of contracted labor, now at an all-time high, to classifying employees as temporary--since the 1970s.

Dresang, the Wisconsin professor, said that in the 1970s the moves were designed to increase government flexibility, but that since the Reagan presidency they have been fueled by the assumption that government is too expensive and inefficient. The movement has even gone global, with cabinet-level officials in Britain and New Zealand now on yearly contracts to make their performance more efficient.

“There was this huge push to privatize and save costs,” said Madeline Janis-Aparicio, an attorney for Los Angeles’ Living Wage Coalition. “In many ways now we’re looking at the consequences of that.”

In response, labor groups and anti-poverty activists have pushed for what they call a living wage in cities across the country. These groups argue that keeping wages down eventually costs governments more because they must assist poor people with health care or welfare. Municipalities from New York to Madison, Wis., to Seattle have adopted various living wage laws.

In Los Angeles, crossing guards and other employees for years were denied benefits because they were listed as part-time. Janis-Aparicio said that when her organization pushed a living wage requirement through the City Council, the group and council supporters were surprised at the number of low-paying city jobs, and the law was amended to cover part-time workers.

Now the living wage movement is targeting the far larger county government four years after its brush with bankruptcy, placing the liberal majority on the Board of Supervisors in a bind: How can they require their contractors to pay higher salaries while denying the same to some of their own employees who are classified as part-time?

Los Angeles County, the region’s largest employer with more than 80,000 workers, includes about 3,000 people making less than what the county auditor determined to be the living wage--$9.46 per hour without medical benefits. Many of these are classified as part-time.

The situation involves “the constructive tension between management and labor, between those of us in management who would like to do more, but are constrained to do less because of fiscal restraints,” said Supervisor Zev Yaroslavsky, one of the Democrats among the supervisors and an aggressive cost-cutter since joining the board.

Lois Luera feels that tension.

She works 32 hours a week in the Valencia library, receiving an hourly salary of $7.50 without benefits. Although she says she wants full-time work, the only job the 59-year-old former homemaker could get after her divorce was the part-time position shelving books for the county library system, which has about 800 part-time employees.

Recently, Luera’s arthritis flared up, forcing her to miss a week of work and go to the doctor, paying out of her savings.

“Here I am, out of work, having to pay to go to the doctor. It’s not a good thing,” Luera said. “When the savings are gone, it’ll be really scary.”

Nancy Mahr, a spokeswoman for the county’s libraries, said her agency uses part-time workers because they are a more flexible way of staffing a system open nights and weekends.

The county has closed libraries since the state Legislature shifted away much of the county’s property tax revenues in the early 1990s. Mahr said that although cost was not a prime factor for the staffing decisions, it could not be ignored.

‘Government Has a Responsibility’

“The government has a responsibility to its employees, of course, but it also has a responsibility to the public it’s serving,” she said. “It has a responsibility to balance so it can serve both.”

Labor activists say the county has gone out of balance, especially since a conservative board majority got voters to pass Proposition A in the 1980s, allowing the county to contract out work if the private sector could perform it more cheaply.

Many of the 200 county contractors now employ low-wage janitors and service workers. One group that cleans the Long Beach courthouse testified before the board recently about how their employers paid them with personal checks and denied them overtime.

Then there are more unusual arrangements, such as the one that has snared Dr. Hassan Kobaissi, a medical resident at County-USC Medical Center.

Kobaissi graduated last year from the California College of Podiatry in San Francisco and agreed to take his residency in the county hospital. He and 11 other residents are managed by a county employee and have county ID cards but are paid by his college under a stipend. Their pay is $10,000 per year.

“You can’t expect people to function as human beings on $10,000 a year,” said Kobaissi, who after putting in his 60 hours weekly at County-USC works odd jobs in the construction field to help provide for his newborn son. Still, he must use food stamps.

Kobaissi said that when he took the position, there were suggestions that the pay would rise. Residents in the county’s sprawling hospital system who are unionized earn $30,000 annually.

“I figured this is a government; there’s reasonable people here; we can speak with them and have our grievances heard,” Kobaissi said. But he said he has had no success.

Dr. Joel Clark, dean for clinical affairs at the College of Podiatry, said his small school loses up to $400,000 annually on the program because the county charges the school for using county facilities, but does not pay for its students’ services. The residents see a staggering 1,000 patients per month, and Clark has unsuccessfully tried to get the county to take over the program to cut his costs and boost the residents’ pay, which he called “an embarrassment for us and them.”

Dr. Ronald Kaufman, medical director of County-USC, said the county cannot pick up the costs, especially with its health department capping indigent patient visits to hospitals in an effort to close a multimillion-dollar deficit.

“What they choose to pay their employees is their own business,” Kaufman said of the college. “It is difficult to discuss pay raises in the face of curtailments.”

Bart Diener, assistant general manager of the union that represents most county employees, said he understands why government allows people like Kobaissi to labor in what he views as unfair working conditions.

“If you’re working under budgetary pressures, you’re going to look for ways to keep your costs down,” Diener said. “And this is one way to do it. If no one’s pointing out this is unfair or unethical, there are going to be pressures to go ahead.”