LSG Sky Chefs – City and Union Take a Stand
Today, I wrote letters to each Alaska Airlines, Lufthansa, American Airlines, Delta and United Airlines. Each airline has hubs serviced by a company called LSG Sky Chefs. LSG Sky Chefs provides catering and much of the food on these airlines as well as others, and is a subsidiary of German airline Lufthansa. They also produce some food sold at 7-Eleven convenience stores.
At those three airlines alone, last year LSG Sky Chefs served over 126 million passengers. Maybe you flew one of these airlines this year & ordered a Sky Chefs meal? I did.
So, why did I write to these 5 airlines? LSG Sky Chefs employees work in my Council District 1, in a West Seattle facility. In early January, the Seattle Office of Labor Standards (OLS) ruled that LSG Sky Chefs failed to pay workers the correct minimum wage going back to 2015, and totaling $335,000 in back wages and fines. OLS even gave LSG Sky Chefs a break on the fine if they agreed to pay what they owed these workers.
LSG Sky Chefs is accused in several other jurisdictions including: San Francisco, San Diego, Denver, and Miami. The loss of wages total $12 million according to a recent report from Unite Here, the union representing LSG Sky Chef workers.
In the West Seattle case, LSG Sky Chefs admits that it did not pay employees the minimum wage, but asserts that Seattle’s minimum wage is preempted by the Railway Labor Act (RLA). However, per the U.S. Supreme Court, the RLA “does not undertake governmental regulation of wages, hours or working conditions.” LSG Sky Chefs also argued that “the Minimum Wage Ordinance did not apply between April 1, 2015 and January 7, 2016 as the result of conflict preemption because it was engaged in collective bargaining…” However, the City of Seattle argues that there is no legal basis for LSG Sky Chefs’ argument and that they are required to pay its Seattle employees the minimum wage.
On Monday LSG Sky Chefs motion to dismiss the case was denied by the Hearing Examiner.
Fixing Our Broken Tax Structure
Here’s an update on my efforts to address our inequitable tax system. Did you know that, in Washington State, people earning $20,000 a year devote two entire months of pay to their yearly tax bill, while the top one percent pay their annual tax bill in only six days? Not only do we have the number one most regressive tax structure in the nation, but we also rate second worst in the nation in transparency and ninth worst in stability. We neither know how much we pay each year as tax payers nor can we reliably predict how much revenue our state and our city will collect from year to year.
To address this, I introduced Resolution 31747, expressing the City’s intent to adopt a progressive income tax for high-income households. The Council unanimously adopted the resolution in early May. This week, I, along with Mayor Murray and co-sponsor Councilmember Sawant, announced a council bill that, if passed, will implement the goals of the Council’s Resolution 31747, and shift Seattle toward to more progressive and sustainable tax structure. Here’s a link to the draft council bill, and a summary sheet.
The May 31 committee meeting of the Affordable Housing, Neighborhoods and Finance (AHNF) Committee included a presentation by prominent local economist Dick Conway, who detailed the regressive nature of our tax system, and its lack of fairness, transparency, and stability. The Affordable Housing, Neighborhoods and Finance Committee held their most recent briefing and public hearing on Wednesday, June 14, in the City Council chambers. There will be additional opportunities to testify before the Council in future AHFN Committee meetings and Full Council. The next opportunity will be next Wednesday, June 21 at the 9:30 am AHFN committee meeting. To sign up for future committee agendas, see here.
The council bill, as proposed, would place a two percent tax on total annual income over $250,000 for individuals, and, for joint filers, a two percent tax over annual income of $500,000. As an example, for an individual with $300,000 in income, only the $50,000 over the $250,000 threshold would be taxable.
The draft council bill specifies that use of the revenues would be restricted to: (1) lowering the property tax burden and the impact of other regressive taxes; (2) replacing federal funding currently received by the City that may be lost due to federal budget cuts; (3) providing public services such as housing, education, and transit; (4) creating green jobs and meeting carbon reduction goals; and (5) the cost of implementing and administering the new City income tax.
The tax would apply to income received after January 1, 2018 and would not be collected until 2019. Early estimates indicate it would raise approximately $125 million. It would apply to Seattle residents only.
The Department of Financial and Administrative Services (FAS) would be responsible for administering the tax, including the future development of more detailed rules for implementation. Only residents with incomes over the thresholds would be required to file with the City. They would file their total income as listed on line 22 on IRS form 1040.
The Institute on Taxation and Economic Policy (ITEP) has found Washington State’s existing tax structure to be the most regressive in the nation, disproportionately hitting low-income households. ITEP found in 2015 that state and local taxes paid by the 20 percent of Washington families with the lowest incomes amounted to 16.8 percent of their income. In contrast, the tax burden for the top one percent of families with the highest incomes was 2.4 percent of their income.
Resolution 31747 noted that legal viability would be the City Council’s primary consideration in developing and constructing the legislation.
Displacement in the MHA Draft Environmental Impact Statement
On June 8, the Office of Planning and Community Development released the Draft Environmental Impact Statement (DEIS) as a necessary step before the Mayor proposes and the Council considers legislation to implement a Mandatory Housing Affordability (MHA) program city-wide including in District 1: Westwood-Highland Park, South Park, West Seattle Junction, Admiral, and Morgan Junction.
As a recap, in order to implement MHA citywide, the Council would have to pass legislation to change zoning to allow a small amount of additional development capacity in Urban Villages and Commercial Zones throughout the city. In exchange for this additional development capacity, the City would require developers using that additional capacity to contribute to affordable housing.
A key component of the DEIS includes the analysis and evaluation of displacement as requested under Resolution 31733. This was a resolution that I authored and sponsored to make sure that the Council was on the record declaring its “intent to consider strategies to mitigate any loss of subsidized affordable units and naturally occurring affordable units resulting from an increase in development capacity.”
Chapter 3.1 Housing and Socioeconomics of the DEIS contains the full analysis used to evaluate whether the proposed city-wide upzones would: (1) increase or decrease direct displacement due to demolition; and (2) either introduce or accelerate a trend of changing socioeconomic conditions that may potentially displace vulnerable populations. The analysis looks at both physical and economic displacement. Physical Displacement is defined as displacement that occurs when acquisition, rehabilitation, or demolition of propriety requires a household to move from their place of residence. Economic Displacement occurs when residents can no longer afford escalating housing costs.
Key Findings, Physical Displacement
- Based on Tenant Relocation Assistance Ordinance (TRAO) data, about 17 households under 50 percent Area Median Income (AMI) were displaced per 100 demolitions. My note: relying too heavy on this finding is problematic. Low income households are considered to be those households under 80% AMI (see chart). This analysis does not include low income households earning more than 50% AMI (see chart) that may have been displaced nor does it include other low income households that are ineligible for TRAO, such as low income, unrelated individuals that share housing expenses but ae not considered a household under the law. These numbers of uncounted displaced residents are likely to be significant.
- Census tracts with more housing production were slightly more likely to gain households with incomes at or below 50 percent of AMI (see chart). My note: this is likely a result of low income housing funds & development being focused in those areas.
- The evaluation of physical displacement concludes that historical analysis indicates that net new housing production has not been associated with a loss of low income households at the census tract scale. Conversely, the study states that tracts that have received more net housing production were more likely to see increases in low income households during the period of analysis. This finding applies to tracts in all displacement risk and access to opportunity typologies. My note: I’m concerned that the issue raised in #1 above relates to this finding as well. How does one calculate net “increases in low income households,” if all low income units demolished are not being counted?
- Very few census tracts in high displacement risk areas experienced a loss of low-income households, but many census tracts with low displacement risk lost low income households. The study states that this indicates that displacement can occur in all areas of the city and may not be more likely to occur in areas classified as high displacement risk.
Key Findings, Economic Displacement
- Overall, Seattle has seen an increase in income disparity.
- Between 2000 and 2013, the number of high income households (above 120 percent AMI, see chart) and extremely low income households (below 30 percent AMI, see chart) grew the fastest.
- Seattle lost households with low- to middle-incomes (60-120 percent AMI, see chart).
- Areas with high displacement risk and low access to opportunity, such as Bitter Lake and Othello, were the fastest to gain extremely low income households (below 30 percent AMI) and very low income households (30 to 60 percent AMI, see chart); but it is unclear if this can be attributed to development of low income housing.
- Areas with high displacement risk and high access to opportunity such as Columbia City and Northgate gained households with incomes (between 80 and 120 percent AMI, see chart) while other areas of the city saw loses.
- The study claims that loss of low income households does not correlate with areas of rapid housing development, although the data used does not reflect the most recent development boom. Census tracts that experienced more net housing production were more likely to gain low income households.
Based on these findings, the Draft EIS identifies three new alternatives using the SEPA process to test and construct a program that would ultimately be proposed for action by the City Council to mitigate displacement. These alternatives may be modified and/or a preferred alternative may be identified in the Final EIS.
Next week I’ll provide a short summary of how each alternative differs and additional analysis on the displacement findings.
Arts Update: Help Columbia City Theater
Please consider supporting this fundraising campaign to pay for some long overdue repairs, add a new marquee & awning out front, upgrade sound and lighting technology, and create the capacity to smoothly execute an ownership transition to a new leadership team with deep roots in the South Seattle music community.
West Seattle Greenway meetings, June 17th and 21st
The Seattle Department of Transportation (SDOT) has released a “most promising route” for the West Seattle Neighborhood Greenway. The route they identify goes from 30th Ave SW and SW Roxbury Street to 42nd Ave SW and SW Edmunds Street. It was selected from options released last year. The route reflects the Bicycle Master Plan, which calls for a neighborhood greenway primarily on 34th, 36th and 37th, and public comments.
SDOT will host two drop-in meetings during the coming week:
- Saturday, June 17: 10 – 11:30 AM
Uptown Espresso
4301 SW Edmunds St - Wednesday, June 21: 5:30 – 7 PM
Southwest Public Library
9010 35th Ave SW
In addition, an online survey will be available at the project webpage from June 17-July 9. The project contact is Dan Anderson, you can reach him at westseattlegreenway@seattle.gov.
Information about neighborhood greenways is available at the project webpage; here’s a link to information about the Delridge/Highland Park Greenway.