San José elected leaders and administrators divided on minimum wage hike

Mercury News November 13, 2016

SAN JOSE — In a rare showing of disagreement, San José elected leaders are at odds with city administrators over how quickly the city’s minimum wage should hit $15 — but they’re also at odds with themselves.

Mayor Sam Liccardo, Vice Mayor Rose Herrera and Councilmen Chappie Jones and Manh Nguyen propose raising the city’s wage floor to $15 by July 1, 2019. But council members Magdalena Carrasco, Raul Peralez, Ash Kalra and Donald Rocha want to see it raised six months earlier — on January 1, 2019.

The City Council will discuss the minimum wage timeline at its meeting Tuesday.

Both proposals meet a plan approved by the Cities Association of Santa Clara County in June to raise wages regionally by 2019. But that recommendation didn’t specify when in 2019 to raise the wage floor, and advocates say other cities will hit $15 in January — leaving San José behind.

“This means we will always be six months behind the rest. Do we want to be dragging our feet?” said Scott Myers-Lipton, a San José State sociology professor who led a successful 2012 effort to raise the minimum wage to $10. “San José was seen as the place where the minimum wage increase occurred — and now to be one of the slowest in the county is shocking.”

The two proposals also conflict with what city administrators want. Kim Walesh, San José’s economic development director, suggests raising the minimum wage to $15 by January 2020 — one year later than the Cities Association recommendation but two years ahead of a state mandate to reach $15 by 2022.

Councilman Johnny Khamis agrees with Walesh. He says raising the minimum wage sooner could hurt businesses that are still absorbing a sales tax hike, business tax increase and soon a new measure requiring them to offer part-time employees access to more hours.

“Before fast-tracking yet another costly mandate on businesses and nonprofits, we must allow San José employers some breathing room to digest these new taxes and regulations,” Khamis wrote in a memo.

But advocates say a wage boost in Silicon Valley’s largest city — where rents are among the highest in the country — cannot be put on the back burner. And some Bay Area cities such as Sunnyvale and Mountain View have agreed to raise wages to $15 sooner, by 2018.

For Blanca Rodriguez, a 42-year-old who works at McDonald’s and a gas station, a boost in her paycheck can’t come quickly enough. She’d put most of that money back into the local economy.

“If they can pass it sooner, it’s better for everyone,” Rodriguez said. “It’s so expensive to live here, and we’ve been waiting years for this. I wouldn’t have to stress about paying my rent and my bills.”

But some small business owners say the extra time will help them get ready for the wage hike by reducing other costs.

“It’s going to affect us either way — but especially if it’s raised immediately because business owners aren’t prepared for it,” said Carlos Zubizarreta, manager at Muchos! Restaurant and Bar in downtown San Jose.

The cities of Cupertino, Los Altos, Mountain View, Palo Alto and Sunnyvale have passed
ordinances to reach $15 by 2019 without exemptions.

A city-sponsored wage study showed an increase to $15 by 2019 would generate an average pay increase of $3,000 for 115,000 San José workers. But Walesh recommends a one-year delay to avoid “a cumulative effect that is unduly burdensome” on employers.

San Jose elected leaders also disagree on who should be exempt from the wage hike. Liccardo earlier this year recommended exemptions from the higher minimum wage for people such as parolees, homeless and foster youth.

Liccardo and his memo co-signers now want to see an exemption for youth in employment programs — allowing them to earn less than minimum wage — for 120 days to encourage employers to hire them. But Carrasco, Peralez, Kalra and Rocha don’t want any exemptions, saying they’re “inequitable” to those who need the money the most.

Proposal from city administrators, Khamis:

  • $10.50 in January 2017
  • $12 in January 2018
  • $13.50 in January 2019
  • $15 per hour in January 2020
  • Exemptions for employees in transitional jobs programs

Proposal from Liccardo, Herrera, Jones, M. Nguyen:

  • $12 to July 1, 2017
  • $13.50 to July 1, 2018
  • $15 to July 1, 2019
  • Exemption for youth under 18 in years of age in employment programs (limited to 120 days)

Proposal from Carrasco, Peralez, Kalra, Rocha:

  • $12 in January 1, 2017
  • $15 by January 1, 2019
  • No exemptions