California State Senator Mark Leno

California State Senator Mark Leno

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Senator Mark Leno says the ‘sharing economy’ is a misnomer for big business

Back Q&A Feb 29, 2016 By Rich Ehisen

California State Senator Mark Leno never intended to enter the political arena. A Wisconsin native who spent two years in rabbinical studies at the Hebrew Union College in New York, his focus was on running the small sign business he owns in San Francisco. But in 1998, then-Mayor Willie Brown appointed him to fill a vacancy on the Board of Supervisors, and a new career was born. In 2002 he was elected to the California Assembly, becoming one of the first openly gay men to serve in that body. In 2008 he again blazed a trail, becoming the first openly gay man elected to the Senate. Along the way he has become one of the Capitol’s most prominent voices fighting to protect consumers. Now approaching his final year in the Legislature, we sat down with him to discuss raising the minimum wage, regulating the sharing economy and LGBT rights.

Make it Work:History has taught us that increasing the minimum wage produces greater workforce stability and less attrition,” says Sen. Mark Leno. “It’s very expensive for an employer to lose someone and then go through the hiring process. If someone is no longer paid a sub-poverty wage, you also have greater productivity.” Leno has authored legislation (SB 3) to raise California’s statewide minimum wage to $13 by 2019, with future increases tied to the consumer price index. “It’s a business talking line that we respect and reward work, but we don’t.” he adds. “How can you say a sub-poverty wage is rewarding honest work?
You’re probably used to having many of your bills labeled as ‘job killers’. Does that bother you?

I won’t be so flippant as to suggest I wear it as a badge of honor, but it’s really just a difference of opinion. I do not believe any bills I introduce are job killers. For example, we’ve got data that shows raising the minimum wage not only doesn’t kill jobs, it creates jobs. We raised California’s minimum wage to $9 an hour on July 1, 2014. Businesses knew the law would raise it 18 months later to $10 an hour. With full knowledge of all that, what’s happened to California’s unemployment between July 1, 2014 and today?  I could be off by a tenth of a percentage point, but I think it’s down from 7.3 percent to 5.9 percent. Does this sound like it killed jobs? No. It puts more money into the pockets of lower wage earners. People at that rung of the economic ladder must spend everything they’ve earned to put food on the table and pay the rent. Any additional money they have will be spent in the local community. That’s more dollars circulating, which increases the demand for goods and services. Employers have to hire to meet the demand, creating what economists call a virtuous upward cycle. I get that the chamber will come out and say it’s a job-killer bill, but it’s a difference of opinion.

You and several other prominent Democrats were in favor of a proposal in San Francisco last November to more strongly regulate services like Airbnb there. That measure failed. Do you anticipate trying to come at it from a statewide perspective with state legislation?
Related: Sen. Mark Leno on the fight for privacy in the digital age

It is clearly a statewide issue. My colleague, Sen. Mike McGuire, introduced legislation [last session] that was very similar to Proposition F. It’s a two-year bill. He could not move it forward last year and I don’t know what will become of it this year. The industry is only getting more powerful and when they put their foot down, they usually get what they want.

The so-called ‘sharing economy’ is booming – Airbnb, Uber, Lyft, TaskRabbit and so many others. Regulating them and ensuring consumers are protected has been a real struggle, particularly with the ridesharing services. How do we foster innovation but still protect consumers?

First, I take issue with the name, ‘sharing economy’. This is big business and profits — it’s not about sharing anything. It’s a great moniker, but it also gives you an indication that there’s sleight-of-hand going on. And let’s be clear what Prop F was. In San Francisco, the law requires people who want to use rooms in their homes like this to register with the city. What Prop F would have done was make it illegal for Airbnb to allow illegal hosts to use their platform. Doesn’t that make sense? The fact is, the industry is making the majority of its profit on the activity of illegal hosts. So, why are these hosts held harmless? San Francisco’s existing ordinance is completely unenforceable and that’s what Prop F was trying to fix. Another example: It took Airbnb a full year or more to collect the city’s transit occupancy tax. You pay 14 percent when you stay in a hotel. Shouldn’t you pay 14 percent when you stay in my bedroom? That’s money the municipality loses if we don’t treat them the same. Why should the Airbnb industry be treated more beneficially than the existing hotel industry? That’s not a level playing field. The Airbnb industry’s concern about Prop F was that there would be lawsuits against them for breaking the law. How do they go to Wall Street and sell an IPO for billions of dollars when they have two dozen lawsuits pending? It’s all about the IPO, let’s be honest here.

You were one of the first openly gay men in our legislature. How much has your presence and effectiveness opened that possibility to others?

That will be for those with some hindsight and distance to be able to assess at some future date. Of course Carol Migden and Sheila Khuel preceded all of us. But I do recognize that John Laird and I were the first openly gay men elected to the Assembly, and then I was the first elected to the Senate. My friend (Attorney General) Kamala Harris told me that her mother told her that as important as it is to be the first, it’s more important not to be the last. It really says something for making sure that attention is paid to this in the future, so these opportunities remain and we become a more inclusive society that is less concerned with our differences and more focused on our similarities.

One significant measure Gov. Brown signed last fall was your bill that bars the state from doing business with employers who offer transgender workers different benefits than other employees. Measures like this are often confusing to employers. What is the intent of the bill and how will it work?

We already require all businesses in California that contract with the state for contracts of more than $100,000 to provide equal benefits to all employers, transgender or otherwise. The problem is when California businesses are competing for state contracts with out-of-state-businesses that don’t have similar laws or requirements, it’s not a level playing field. This bill requires that all businesses wishing to contract with California for more than $100,000 provide equal benefits to their transgender employees. We’re not requiring any benefits be provided, but if you provide health benefits to your non-transgender employees, then you must provide equal benefits to your transgender employees. We’re not saying you have to hire them or create a benefit for them. You just have to provide equal benefits.

Your friend, colleague and former Senate pro Tempore, Darrell Steinberg, is now running for mayor of Sacramento. You term out at the end of 2016. Do you see yourself ever following suit and running for mayor of San Francisco?

I made the conscious decision last year at this time not to challenge the incumbent mayor for this election. I was asked by a reporter on election night if I had any regrets and I do not. I don’t look back on it. I’ve been in public service for the last 17 years, but at heart I’m a small business owner. I had no intention of running, no inclination and no thought of getting into public office. It is such a privilege and a pleasure, and it is also confounding and maddening. That notwithstanding, I love it. I do want to remember there is life outside of this, because we have all seen too many elected officials go through moral contortions just to stay in office. I thought, if that happens to me, take me out and end it. But you never say never, right? 


Frugal Traveler (not verified)February 29, 2016 - 12:34pm

I have to agree with Senator Leno: what began as "sharing" is now Big Business. It's a distortion of the word to call the commercial short-term rental business sharing. Thanks, Senator Leno, for pointing out that the emperor isn't wearing any clothes! @trvlonthehouse