SD minimum wage going to $11.50 by 2017

[Leo the Dog]

SD minimum wage going to $11.50 by 2017
Council opts for ordinance over ballot measure in 6-3 vote
By David Garrick9:43 P.M.JULY 14, 2014


SAN DIEGO — Thousands of San Diego workers got a big pay raise Monday night from the City Council, which voted 6-3 along party lines to increase the city’s minimum wage to $11.50 an hour by January 2017.

The council considered presenting the wage hike to voters for approval in November, but decided to move forward with an ordinance instead.

Supporters of raising the minimum wage, including all six of the council’s Democrats, said it will help local business by boosting the buying power of many thousands of low-wage workers. They also say it’s not acceptable that people working full-time can’t afford the basics in San Diego.

Opponents, including the council’s three Republicans, say raising the minimum wage will force small businesses to increase prices, lay off workers, search for greater automation and possibly shut down or leave San Diego. It will also accelerate inflation, they said.

San Diego joins several other cities across the nation, including San Jose and Seattle, trying to fight poverty by establishing local minimum wages that are higher than state and federal requirements. San Diego is the largest city by population in the country to make such a move.

California’s minimum wage rose from $8 an hour to $9 on July 1 and is scheduled to become $10 in January 2016. The federal minimum wage is $7.25 an hour.

San Diego’s minimum wage will rise to $9.75 in January 2015, $10.50 in January 2016 and $11.50 in January 2017. Further increases tied to the local Consumer Price Index would begin in January 2019.

The ordinance also requires employers to award full-time workers five days of sick leave per year beginning in January; part-time workers would earn prorated sick leave based on the number of hours they work.

The council’s decision to opt for an ordinance instead of a ballot measure was criticized Monday, especially by business groups, which said it would have been more appropriate to allow voters to decide an issue with such impact.

An ordinance also makes the new pay requirements more vulnerable to change by a future council, where elections can shift the balance of power every two years. It could also be overturned by a referendum, which happened last month to the council-approved Barrio Logan Community Plan.

The six votes in favor of the ordinance means the legislation isn’t vulnerable to a veto by Mayor Kevin Faulconer because two-thirds of the council supports it.

The council’s Democrats characterized the legislation as a balanced approach that would help low-wage workers without forcing merchants to leave the city.

“This is a reasonable, common-sense proposal that maintains tremendous benefits for our workers and our local economy while greatly reducing the potential impacts on businesses,” said City Council President Todd Gloria, who retreated from a previous proposal to hike the local minimum wage to $13.09 an hour.

The $11.50 chosen by the council is the same hike selected by Washington, D.C.; it’s less than the $15 an hour adopted by Seattle and proposed in San Francisco; and it’s more than than the $10.10 adopted by Hawaii, Connecticut and Maryland.

Gloria, who has spearheaded local efforts to raise the minimum wage this year, said the hike would pump an estimated $260 million into the local economy by raising the wages of low-paid workers an average of 83 cents an hour by 2017.

He said a recent study also found that only 5 percent of workers affected would be teenagers, countering critics who say the hike would wipe out summer jobs. An estimated 60 percent of food-service workers would get pay hikes, Gloria said.

Councilman Mark Kersey, a Republican, said supporters have underestimated how many businesses will leave the city. “I understand we want to let people out of poverty, but we also want to keep businesses in the city,” he said. “Other cities are courting our businesses.”

Councilman David Alvarez downplayed those worries.

“A lot of people are probably worried about what’s next,” he said. “We’re afraid of what’s happening now.”

More than 100 people spoke during a public hearing before the council’s vote, with many of them wearing pink “Raise Up San Diego” signs on their shirts.

Arguments in favor of the new law included that it will make businesses more profitable by improving employee attendance, morale and productivity and that it will decrease the number of people relying on public services.

Among those speaking in favor was longtime San Diego resident and former pro basketball star Bill Walton.

Arguments against included that the law would lead to layoffs, have a smaller effect on poverty than predicted, drive businesses out of the city and increase prices for everyone.

“While some businesses will undoubtedly benefit from the additional spending created from the increase, most small business owners in the city have expressed concerns that to avoid eliminating employees they’ll have to increase prices,” said Mark Leslie, chief executive of the San Diego Taxpayers Association.

Other critics complained that the ordinance doesn’t factor in tips, give breaks to businesses that provide health insurance or allow a lower “training wage” to preserve summer jobs for teens

Enforcing a sick leave requirement and a higher minimum wage than the state requires will cost the city $682,000 per year, $532,000 for four employees and $150,000 to create a website and handle other administrative efforts, the city’s Independent Budget Analyst said last week.

Critics have compared the enforcement of the law to having miniature version of the Internal Revenue Service operating within City Hall.

The new requirement for employers will also cost San Diego more than $500,000 per year in higher pay for city workers who now make less than the city’s new minimum wage.

The budget analyst estimated the cost for fiscal year 2015-16 at $554,000, the cost during fiscal year 2016-17 at $611,000 and the cost during fiscal year 2017-18 at $653,000.

david.garrick@utsandiego.com (619) 269-8906 @UTDavidGarrick

Source: http://www.utsandiego.com/news/2014/...?#article-copy