San José panel OKs study on raising minimum wage

Mercury News August 31, 2015

SAN JOSE — Only a few years after city voters approved a higher minimum wage for San José, city leaders are talking about raising the pay floor again and this time reaching out to other cities to make it a more regional approach.

The move comes as soaring Silicon Valley rents have spurred state leaders and several other cities, most recently Palo Alto, Mountain View and Santa Clara, to adopt various measures to raise the minimum wage. The statewide minimum, $8 in 2012 when San Jose voters passed a $10 minimum wage with yearly cost-of-living increases, is now $9 and set to hit $10 in January.

But Mayor Sam Liccardo, along with Councilmen Chappie Jones and Manh Nguyen, asked a council committee to approve a study on raising the city’s minimum wage again — most likely to $15. The committee, chaired by Liccardo, approved the study this month, but the mayor cautioned against “duplicative efforts” because of statewide efforts floating around to raise minimum wage.

The City Council last March declared support for Senate Bill 3, a measure by state Sen. Mark Leno, D-San Francisco, to boost state minimum wage to $11 next year and $13 in 2017. But the controversial bill, which passed the Senate in June, failed to advance from an Assembly committee last week. It’s now likely on hold until next year. However, unions are backing an effort to put an initiative before voters in 2016 that would raise the state minimum wage by $1 a year to $15 in 2021.

Councilman Raul Peralez said San José shouldn’t wait for statewide initiatives to raise minimum wage. He said San Jose should lead the effort, similar to how it raised wages in 2012 and just like several Bay Area cities have already done.

Earlier this month, the Palo Alto and Santa Clara city councils approved raising the minimum wage in those cities to $11 per hour, the highest in Santa Clara County. A Mountain View ordinance adopted in October set the minimum wage in that city at $10.30 on July 1 with annual inflation increases.

“Other cities are not waiting for the state,” Peralez said. “They’re taking it up at their council meetings. Let’s tackle it now and let’s be a leader again. I think we’re behind the curve now.”

Liccardo, who did not support the city’s 2012 ballot measure to increase minimum wage, stressed the importance of approaching the issue regionally this time around. The mayor said he’s working with Jones to rally support from other Bay Area mayors to prevent creating a patchwork of different minimum wage laws across the valley.

“We seem to have strong support from many mayors throughout the county for heading down this path,” Liccardo said during the committee meeting. “I think there’s a sense that it’s important for all of us to move together.”

Jones, who sits on the Cities Association of Santa Clara County, said neighboring cities already are looking at similar measures. “It needs to be something that’s coordinated across the county,” he said.

Palo Alto, Mountain View and Sunnyvale have discussed plans for a regional approach to raise their minimum wages to $15 by 2018. Campbell officials earlier this year considered their own minimum wage increase but said they favored a regional approach.

But Councilman Johnny Khamis, who voted against the San José study and against supporting the state minimum wage bill, said raising the floor will trigger a loss of jobs because companies will automate and small businesses might close. He also argued that some low-wage workers would lose food stamps and other benefits.

“I think the real solution is we need to start educating our kids so they can get the jobs that are here,” Khamis said.

Business groups opposed San José’s 2012 minimum wage ballot measure, arguing it would slow the city’s economic recovery, disadvantage local businesses near the border with other cities and lead to fewer jobs and higher costs. But with the broader economy growing, it is hard to assess the overall economic impact, and there has been no independent analysis.

“I can tell you that right out of the gate, most small- and medium-sized businesses will oppose a significant increase in the minimum wage as many are still trying to recover from the last economic downturn,” said Matthew Mahood, president and CEO of the San José Silicon Valley Chamber of Commerce.

But supporters of the minimum wage increase argue the fears about driving small businesses out of San José have proved unfounded. They urged the council to hire an independent economist to provide a fair and unbiased analysis on raising the minimum wage.

Salvador Bustamante, of Latinos United for a New America, said the higher wage measure of 2012 hasn’t hurt San José as some predicted.

“Here we are,” he said, “alive and prospering.”

A Patchwork Wage Floor

Until a few years ago, only a handful of cities had set a higher minimum wage than their state required, but that is changing. Below are current Bay Area hourly minimum wages.

California: $9, increasing to $10 on Jan. 1.
San Francisco: $12.25, increasing each July 1 to $15 in 2018 with annual inflation increases thereafter.
Oakland: $12.25, with annual inflation increases.
Berkeley: $10, $11 on Oct. 1, $12.53 in October 2016.
San José: $10.30, with annual inflation increases.
Palo Alto: $9, increasing to $11 on Jan. 1.
Mountain View: $10.30 with annual inflation increases.
Sunnyvale: $10.30 with annual inflation increases.