Laboring in Laguna

The City of Laguna Beach is buying property where a day labor center has been in operation for more than a decade. According to a July 24, 2008 LA Times story, there are no plans by the city to shut down the center, which it has subsidized for several years. The center enjoyed use of the land rent free for years, until the California Department of Transportation ("Cal Trans") discovered that it was the rightful owner and demanded compensation. Laguna Beach then began paying Cal Trans $420 a month in rent. Now the city is ponying up $18,000 to buy it lock, stock, and barrel.

In the grand scheme of things, that's not a lot of money. But one can't help but wonder if these costs could have been avoided if the city had chosen simply to designate a stretch of sidewalk or roadside as an appropriate place for soliciting day labor work and nothing more. Building a center undoubtedly attracted the attention of the state.

According to court papers filed in a lawsuit challenging the center, http://www.judicialwatch.org/files/2007/0408GarciaAppOpenBrf.pdf, Laguna Beach has contributed between $20,000 and $40,000 a year to the operation of the day labor center, a non-profit picking up the rest of the expenses, which total about $50,000 per year. The South County Cross Cultural Council non-profit earns some money from those who use the center-- laborers and employers alike. The fees are
modest. Employers pay $5 per visit. For a long time workers paid only $1 per day, which was refunded if the worker was hired. But the economic slowdown has reduced the number of workers using the site, and worker fees have been increased to a non-refundable $2 per day. The Council hopes this will enable the center to stay afloat. But the fiscal crunch also serves to highlight riskiness of investing in day labor centers.

This is not the only way to deal with day labor. As street corners near home improvement stores attest, workers and employers have no trouble finding each other at informal hiring sites. I've blogged before that the negative spillover effects from such sites are typically much less than are often perceived. Compared to formal day labor centers, informal sites cost much less to run. Super flexible, they have little in the way of sunk costs-- they are a safe investment.

With the best of intentions, the city of Laguna Beach paid 18 grand to become the proud owner of a day labor center. Let's hope that its investment doesn't turn out to be a white elephant.