The Board of Supervisors Budget and Finance Committee on Wednesday recommended for approval a proposal that would require every company operating at San Francisco International Airport to provide comprehensive, affordable health care coverage to workers and their families.
Supervisors unanimously agreed to move the legislation to the full board in spite of staunch opposition from airlines and the broader tourism industry.
The Healthy Airport Ordinance would create a baseline standard of healthcare coverage for all SFO workers and their families, many of whom are low-income and people of color, and who say their current premiums and deductibles deter them from seeking even the most basic care.
If passed into law, it would “make sure all our folks who are at the airport are able to cover themselves and their family,” said Supervisor Shamann Walton, one of the bill’s co-sponsors. “They are essential workers going into work every day, and they do not have the luxury as some of us do to work from home or work remotely.”
The ordinance gives airlines and airport contractors two options. They can either provide health insurance to all workers and their families at no cost to the employee, regardless of how many average weekly hours an individual works, or instead contribute $9.50 per hour — up from $5.60 per hour — on behalf of each employee into the existing city-managed health care account, which provides a suite of options including coverage of dependents.
“These folks are, as we all are, in fear for their health as never before,” said Supervisor Rafael Mandelman, a co-sponsor of the ordinance.
Airport workers have told the Examiner they feel they must choose between going to work, possibly contracting the virus and dealing with costly treatment bills, or foregoing their shift and losing their paycheck altogether.
Airline officials came out in full force at last week’s hearing and again on Wednesday to voice their opposition and testify during public comment that the ordinance would dramatically increase the cost of doing business at SFO, forcing them to cut flights, eliminate jobs and pass along higher costs to the customer.
All this, they said, at a moment when the tourism industry is fighting for its life in the wake of the coronavirus pandemic.
“We are far from out of the woods,” said Dana Debel, managing director of state and local government affairs for Delta Airlines. Debel put the daily loss for the airline this quarter at roughly $18 million.
The idea that this is the wrong time for the policy wasn’t met with much sympathy from the committee.
Mandelman said now is “the necessary time” to craft a policy that no longer perpetuates “a situation in which our lowest wage workers, often immigrants and people of color, don’t have access, or at least not real access, to affordable, high quality health care.”
Ted Waechter, spokesperson for UNITE HERE Local 2, which represents many of SFO’s service workers, called the airlines’ fight against the proposed legislation “shocking.”
“The Healthy Airport Ordinance is essential to protecting frontline workers and ensuring that travelers feel safe coming to SFO […],” he said.
Representatives from the tourism industry and local business also expressed opposition, saying it would have a ripple effect on the regional economy and merchants downstream that are already struggling and depending on the return of tourism for survival.
Sharky Laguana, chair of the San Francisco Small Business Commission and president of the American Car Rental Association, commended the committee for its efforts to legitimately help workers, but cautioned that the new policy might backfire.
“My concern is simply that it might not end up helping workers in the long run, especially if airlines end up moving flights to other nearby cities. It could hurt workers in San Francisco overall, a city that’s so dependent on money from visitors and tourism,” he said.
Disputes over cost
How much money the provision of such health care would actually cost the airport, its airlines and its contractors remains a major point of contention.
A Budget and Legislative Analyst report estimates the ordinance would make 4,260 employees eligible for family health care benefits, costing an additional $8.4 million to $24 million to the impacted companies every year, if they choose the first option of providing expanded coverage directly.
Should companies elect to make the contribution to the Department of Public Health on behalf of employees instead, total annual costs incurred could reach approximately $33 million.
An estimate from SFO leadership, however, puts the economic cost of both scenarios far higher.
Option 1, it says, would cost anywhere from $40.9 million to $120 million annually. Option 2 would cost approximately $163 million.
“We estimate that implementing this proposal could double health care costs for airlines and their service providers,” Airport Director Ivar C. Satero wrote in a letter to the committee on Oct. 23.
Many who testified during public comment in opposition to the ordinance as written asked that the BLA report be revisited and the discrepancy between the two estimates more thoroughly explored.
Although supervisors voiced sympathy for the plight of the airlines, they didn’t back off their stance that workers in San Francisco must be protected.
“I understand that this is a big lift for the airlines, but, quite frankly, the last 10 years have been very profitable for the airlines,” Supervisor Sandra Fewer said. “I think this is the time to step up because the emergency calls for it, but also because it’s an issue about worker’s rights and our own moral compass.”
SFO has been disproportionately hurt by COVID-19’s travel slowdown.
Data from the U.S. Bureau of Transportation shows the number of departing passengers out of SFO during June 2020 was down 87.6 percent as compared to last year. That’s the fourth largest decline nationwide, behind only the three major airports in the New York City area.
However, the airport’s employees have also proven to be vulnerable to the spread of the coronavirus.
There were at least 142 confirmed cases within SFO’s workforce as of last Wednesday, according to Mandelman. That includes one outbreak and an alleged cover-up by contractor ABM Aviation, as previously reported by The San Francisco Examiner, and another outbreak at Gate Gourmet, reported by catering workers.