Campaigns by fast food workers, Walmart employees and unions appear to be having an effect, as cities across the country scramble to raise local minimum wages. Seattle just jumped out front, with a $15.00 minimum wage; San Francisco may join in, if a measure to raise that city’s minimum wage from $10.74 to $15.00 makes it to the November ballot. The City of Richmond recently voted to raise its minimum to $12.30.
Oakland may soon be matched by Berkeley, which is considering a law linking its minimum wage to the rate in the Oakland ballot measure. Unlike Oakland, Berkeley would phase in its increase and allow some exemptions. By October 1, 2016, the Berkeley wage would rise to $12.53 to match Oakland’s rate, after cost of living increases.
Berkeley Mayor Tom Bates has called for an East Bay regional minimum wage, an idea endorsed by business owners at a recent Oakland Chamber of Commerce breakfast on the topic. Bates has reached out to officials in cities around the East Bay, including Oakland, suggesting this approach.
“Achieving the $12.53 level in 2016 was a key part of the East Bay regional minimum wage plan that I proposed a month ago, and it is my hope that we can continue to pursue that goal with other East Bay cities wanting to adopt a local minimum wage that aligns with the 2016 level envisioned in Berkeley and Oakland.”
– Berkeley Mayor Tom Bates, in a May 22, 2014 email to East Bay elected officials
“Oakland is the place where we would look. If the voters approve the ballot measure, that will set a standard,” the Berkeley mayor said in a telephone interview. “It makes it much more palatable to people because they are not at a competitive disadvantage.”
“Locally, the best thing I think is to have as many cities as possible having similar minimum wages,” Bates said, noting that there could be savings in conducting labor enforcement at a regional level.
The City of Emeryville may take up an increase to its minimum wage as early as this summer and might also link its rate to Oakland’s ballot measure, according to Emeryville City Councilmember Jennifer West.
The numbers are not as rosy for workers (or as alarming for businesses) as they seem at first glance: the Seattle measure takes seven years to phase up to $15.00 for small businesses and three years for large businesses. Richmond doesn’t reach $12.30 until 2017. The measure placed on the November ballot by Lift Up Oakland would raise the city’s minimum wage to just $12.25 per hour much sooner, on March 1, 2015. This would place Oakland in the forefront of the move to improve the lot of the lowest-paid workers. See our related coverage of the Oakland measure here.
The national minimum wage still sits at $7.25, where it has been since 2009. After almost annual increases in the 1960s and 1970s, congress has raised the national minimum only eight times since 1980. California’s minimum wage, which was raised to $8.00 per hour in 2008, is scheduled to rise to $9.00 on July 1 of this year and to $10.00 on January 1, 2016.
A bill sponsored by California state senator Mark Leno that would raise the state minimum wage to $11 next year and $13 by 2017, to be indexed to inflation thereafter, has cleared the state senate. If Leno’s bill passes, most of the local ordinances being considered would be overtaken by the statewide minimum.
When San Francisco voted to raise its minimum wage to $8.50 in 2004 (indexed to the cost of living, it is now $10.74) with a healthcare mandate, some restaurant owners balked. The San Francisco law deserves at least partial credit for Oakland’s foodie boom, as restaurateurs chose Oakland for its low rents and wages. At a recent Chamber of Commerce breakfast, some raised the concern that new restaurants will avoid Oakland due to higher labor costs.
San Francisco’s law went into effect 10 years ago, providing a test case for dire predictions of lost jobs and business closures. The authors of a 2006 UC Berkeley Institute of Industrial Relations study of San Francisco noted that “employment effects [of raising the city’s minimum wage] are generally small, positive, and not statistically significant.”
In a 2014 recent survey of the effects of local minimum wage laws in several different states, UC researchers found no statistically significant reduction in jobs or hours after minimum wage increases. Perhaps most significantly, the research showed that higher minimum wages lead to a reduction in pay inequality.
Most of the current minimum wage proposals still fall short of providing workers with a living wage, according to a Living Wage Calculator created by MIT. The figures for Oakland show that the ballot measure would provide enough to support a single person with a full time job, but would fall well short of the wages needed to support a family.
Mayor Bates sees the proposals currently under consideration as a beginning. He hopes the negotiation in his city will “start a discussion about what we should do beyond the period of the ordinance.” He added, “We want to continue to move the minimum wage up, that’s the main thing.”