Go to a grocery store or shopping center in San Diego, La Mesa or Chula Vista and you might see people collecting signatures for a couple ballot initiatives. One seeks to limit health care executive compensation and the other would implement a $25 per hour minimum pay for employees at health care facilities.
"That is the baseline to be able to make it in California — to be able to pay rent, buy groceries, put gas in your car in this very expensive state," said Renée Saldaña, a spokesperson for SEIU-United Healthcare Workers West (SEIU-UHW).
SEIU-UHW is the union behind the ballot initiatives. They have led similar efforts in other Southern California cities and their partner, SEIU California, supports a bill (SB-525) moving through the state legislature that would phase in a $25 per hour minimum pay for health care employees by 2025. Saldaña said the pandemic made staffing shortages worse and some at the lower end of the pay scale are leaving for higher paying jobs in retail or food service.
"We are hearing that many health care workers just can’t afford to live where they work in San Diego," Saldaña said. "They are working two or three jobs just really struggling to make ends meet on top of dealing with this work that is very emotionally and physically draining. What we saw was that pay rates for health care workers in San Diego were failing to keep pace with those in the retail and food service industries."
While this claim is difficult to verify, many food service jobs in San Diego start at or near minimum wage. KPBS looked at current job listings for local retailers including McDonald’s which lists pay rates of $16.50-$19.00 per hour for team members and Target which lists pay rates starting from $25 to $42.50 an hour for a food service team leader position. A restaurant server at Buffalo Wild Wings in San Diego pays $15.50 - $20.15 an hour plus tips.
A certified nursing assistant job listing at Sharp Healthcare has a pay range of $20.25 - $28.86 per hour, nursing assistants have a similar pay range. A patient transporter at Sharp could earn $20 - $26.77 per hour. A Sharp newborn hearing screening technician pay range is from $23.10 to $34.22 per hour. A food service partner at Scripps Health ranges from $18 - $25.20 per hour. Cooks are listed at $19.10 to $27.50. A Scripps security officer’s hourly range is posted at $18.54 to $26.33. A telemetry/monitoring technician at Scripps earns an hourly rate of between $19.10 to $27.50.
The minimum pay initiative would impact positions including receptionists, cleaning staff, cooks, maintenance workers and security guards — not nurses or doctors who make above $25 per hour — but Saldaña said it would also boost pay for some who provide direct care.
"Certified nursing assistants, patient care technicians, dialysis technicians — these are many of the folks who are at the lower end of the wage scale in health care and these are also folks who have some of the most contact with patients," Saldaña said.
Sharp HealthCare, Scripps Health and Kaiser Permanente officials referred comment on this story to the Hospital Association of San Diego and Imperial Counties. Rady Children’s Hospital and UC San Diego Health officials did not respond. Kaiser San Diego also emailed a statement about its general compensation model.
“We offer employees market-competitive wages and outstanding benefits, opportunities to learn new skills and grow their careers, and we are committed to providing a safe and equitable work environment where they can be their best selves,” said Jennifer Dailard, spokesperson for Kaiser San Diego.
The hospital association represents health care facilities and their interests. CEO Dimitrios Alexiou said they are opposed to the local initiatives as well as SB-525. Alexiou said health providers support fair and living wages as the market dictates.
"Passing measures city by city — including some workers while excluding others — just simply isn’t good policy," Alexiou said. "We definitely support our health care workers, but from a financial perspective you’re talking about increased expenses and costs to the bottom line without additional revenue, which puts hospitals and other providers in a tough position."
Alexiou described the initiatives as “operational handcuffs,” that could force unintended consequences.
"Providers will have to make difficult decisions and some of that could be access," he said. "Unfortunately some of that could also be facilities end up closing. We’ve seen some of that already throughout the state without minimum wage conversations."
According to a report commissioned by the California Hospital Association 1 in 5 hospitals are at risk of closing due to financial challenges from the pandemic. Alexiou said some hospitals operate on thin margins. But SEIU-UHW pushes back against the notion that health systems cannot afford this. Saldaña pointed to millions of dollars in federal and state COVID-19 relief funding and high profits for some systems.
"What they can’t afford to do is lose more health care workers in our system," Saldaña said.
The majority of hospitals in San Diego are nonprofits. CalMatters reported in 2021 California hospitals had earnings of nearly $12 billion.
KPBS examined the most recent financial information from public disclosures made by three nonprofit San Diego County hospital systems via tax filings:
- For the fiscal year ending in Sept. 2020, Sharp Healthcare reported an operating loss of $126 million with $96 million in net assets or fund balances, according to federal tax filings. For the fiscal year ending in Sept. 2021, the documents show Sharp posted an operating loss of $156 million with net assets, or fund balances, of $185 million.
- Scripps Health reported net income of $243 million with $4.6 billion in net assets or fund balances, according to 2020 filings. In 2021 net income grew to $245 million with $5.2 billion in net assets or fund balances, according to the tax filings.
- Rady Children’s Hospital had $116 million in net income for 2020, with $1.4 billion in net assets or fund balances, filings show. The filings for fiscal year 2021 Rady’s had $156 million in net income with $2 billion in net assets or fund balances.
The documents show that Sharp Healthcare’s fund balances were much lower than those of Scripps Health and Rady Children’s.
Alexiou estimates the financial impact of these initiatives for heath care facilities in San Diego, Chula Vista and La Mesa would be hundreds of million of dollars each year. He said health care systems cannot generally raise the price for goods or services in the same way a retail store or restaurant can.
"Health care doesn't quite work like that," Alexiou said.
Higher reimbursement rates for commercial insurance can be renegotiated, but Alexiou said in the San Diego region as much as 65% to 70% of residents have some form of government funded health care, in Medi-Cal (typically for low-income residents) and Medicare (insurance for those 65 and older).
"Without any increases — which we haven't seen in Medi-Cal in over 10 years — you're really eating the cost so to speak," Alexiou said. "There are no sort of dollars coming to fund or offset those increased expenses."
The separate ballot proposal to limit health care executive compensation would see pay no higher than 15 times minimum wage. Signatures for those initiatives are also being collected in San Diego, Chula Vista and La Mesa. The text of those initiatives reads, "If the applicable minimum wage were $15.50 per hour for the entirety of one calendar year, the covered compensation limit for that year would be $483,600."
"We feel that the primary concern of our major health providers should be serving patients and the community and not enriching individuals," Saldaña said. "So we feel that it’s very appropriate, as we’re having this conversation about the lower-paid workers in our health care system, we also need to be having a conversation about the highest paid workers in our health care system."
Alexiou said capping executive pay would make it harder for systems to recruit top talent.
Per tax filings, in 2021 Rady Children’s Hospital CEO Patrick Frias earned $1.4 million in reportable compensation. During the same year Sharp Healthcare CEO Christopher Howard had $2 million in reportable compensation with Scripps Health CEO Christopher Van Gorder earning $2.4 million.
"Initiatives like this will only make it harder to find those qualified executives because when you start to look at executive comp caps like this which — if they were to be in place — would just make other states, other localities, more desirable and it would make it harder to recruit qualified talent to lead these complex organizations," Alexiou said.
When asked about challenging the initiatives should they qualify for the ballot, Alexiou said it’s too early to say.
"If and when they qualify, there will be more conversations to sort of identify next steps," he said.
If enough signatures are collected and verified, voters in San Diego, La Mesa and Chula Vista would see the initiatives on the November 2024 ballot.
Chula Vista city leaders will also take up their own minimum wage ordinance in September. City Councilmember Andrea Cardenas made the proposal on Aug. 8 for staff to draft an ordinance, which was supported by a majority of members.
"Our workers have been facing an unprecedented rise in the cost of living — I'm not just talking about the recent spike in inflation — but it's an issue that's been ongoing and we really are at a point where we need to take immediate action," Cardenas said.
