San Francisco's local-hire law has good intentions, bad consequences 

click to enlarge Contractors say they are now required to use some workers who are far below the journeyman level for construction jobs simply because they live in the right area. (Getty Images file photo) - CONTRACTORS SAY THEY ARE NOW REQUIRED TO USE SOME WORKERS WHO ARE FAR BELOW THE JOURNEYMAN LEVEL FOR CONSTRUCTION JOBS SIMPLY BECAUSE THEY LIVE IN THE RIGHT AREA. (GETTY IMAGES FILE PHOTO)
  • Contractors say they are now required to use some workers who are far below the journeyman level for construction jobs simply because they live in the right area. (Getty Images file photo)
  • Contractors say they are now required to use some workers who are far below the journeyman level for construction jobs simply because they live in the right area. (Getty Images file photo)

Not every social or economic problem deserves its own law, as our governor said recently while readying his veto pen for dozens of unnecessary bills.

Try selling that concept in San Francisco, where the road of good intentions is paved with shaky legislation.

Take for example the local-hire ordinance approved by the Board of Supervisors, which heard the cries about rising unemployment and a dearth of jobs and decided to run with it.

Only supervisors didn’t know where their feet would take them. Still, they marched on determinedly, to the point that they find themselves facing a wall of opposition from business and union leaders who are asking that an independent analyst be hired to review the law and fix it where necessary.

Officials at City Hall pronounced that the local-hire law would produce new jobs for San Franciscans, requiring 20 percent of workers hired for public works projects valued at $400,000 or more to be from San Francisco, with an increase of 5 percent each year until it reaches its goal of 50 percent by 2017.

That’s a lofty goal that would require a pole vault to achieve, but this one missed some marks on the way to the track.

Such as, for starters, just who is a San Franciscan. The ordinance defines a city resident as someone who lives in The City for as little as one week before starting on a project.

That of course has raised another question about residency. Building contractors are now saying that people are skirting the law by claiming a San Francisco address when they live far outside the fog belt. As a general rule, you don’t want to fashion new laws that carry a huge incentive for cheating.

“One of the things we’ve seen is a gaming of the system with regard to residency,” said Michael Theriault, secretary-treasurer of the San Francisco Building & Trades Council. “That was always going to be problematic. You can’t go knocking on someone’s door in the middle of the night.”

Yet it’s whether they can build a door that has some questioning the worthiness of the ordinance. Contractors say they are now required to use some workers who are far below the journeyman level for construction jobs.

“The biggest problem is that workers are no longer recognized by their skill set, they’re recognized for their ZIP code,” said James Ruigomez, a representative of the painter’s union Local 913.

Still, the biggest flaw may be the price of overseeing the localhire program itself, which the City Controller’s Office estimates will cost $1.6 million per year, with costs increasing by $9 million by the seventh year of the program.

You might ask if that’s money well spent, or whether that kind of funding should be allocated for education and training programs for city residents. Or to put it another way, instead of fighting over jobs based on where workers live (and possibly penalizing contractors over residency requirements) why not use city funds to help young workers learn a career?

Punishment seems to be part of San Francisco’s legislative agenda. Supervisors are scheduled to soon debate a measure designed to force San Francisco businesses to comply with a requirement that they provide health insurance to their workers.

It’s hard to argue with that, but Supervisor David Campos’ plan overlooks the fact that most businesses are already complying with the law, and that by locking up hundreds of thousands of dollars in unspent health insurance funds, it could cripple businesses already inching closer to the economic brink.

Supervisors are looking at a compromise plan, but you can begin to see a pattern here. As well-meaning as the local-hire law was envisioned, it overlooked some aspects of that thing we often call reality. San Francisco expects to spend approximately $27 billion on public works and improvement contracts during the next decade. Yet there isn’t a sufficient labor force residing in The City to fill all those jobs in the future.

The local-hire ordinance is supposed to be reviewed after three years. But why wait to fix something that has more cracks than a typical city sidewalk?

No wonder we trip so often here in the land of unintended consequences.

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Ken Garcia

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