Nearly 40 percent of households in San Diego County do not make enough money to meet everyday expenses, leading them to rely on public assistance, double up on housing with roommates or relatives, and cut back on necessities from auto repairs to medical costs and childcare, according to an annual survey released Thursday by San Diego's Center on Policy Initiatives.
The study came out as President Barack Obama stepped up his push to raise the federal minimum wage from $7.25 per hour to $10.10. Statewide, California's $8 minimum wage is scheduled to hit $9 on July 1 and $10 in 2016.
City Council President Todd Gloria has said one of his top priorities for the council this year is to discuss options of raising the minimum wage or the $13.99 "living wage" that is required for city workers and the employees of major contractors.
But even a $10 wage — amounting to around $21,000 per year — would not be enough to match San Diego's high cost of living, according to the CPI study, based on wage and cost data from the U.S. Census Bureau and other federal agencies. And the living wage salary comes out only slightly above the minimum needed.
In order to match San Diego's standard monthly costs of housing, food, transportation, health and child care, a single worker would have to make at least $13.09 per hour, or $27,655 per year — slightly below the living wage salary of $29,999.
But for workers with children, even the working wage would be too low. Two workers with two young children would each need incomes of $20.06, totaling $84,739, the CPI study suggests.
"We're talking about households where people are doing as much as they can in terms of work — sometimes holding down two or more jobs at once — and still not able to pay for basic needs. And of course it's worse for people who can't find steady full-time jobs," he said.
The study does not take into account the impact of food stamps, welfare or government-subsidized housing or health care. But Brownell described those programs as taxpayer-provided subsidies enabling employers to pay low wages — and even then they do not match local costs.
"When employers don't pay enough to meet day-to-day needs, they have to be subsidized by somebody else, whether it's taxpayers, private charities or the workers' family members, who sometimes put themselves in financial hardship by stepping in to help."
During a City Council meeting Tuesday, several members suggested that an increased the minimum wage could help the city narrow the gap between local income levels and housing costs —the eighth-biggest gap in the nation, according to one recent study.
"I expect in the months ahead, this council will consider a number of critical issues (including) raising the minimum wage," said Council President Pro Tem Sherri Lightner.
The comments came as the council scrapped a previously approved ordinance to raise the so-called "linkage fee," which required developers to pay a percentage of their construction costs to fund affordable housing projects.
The council said it would to try to arrange an alternative solution with the business interests that had mounted a ballot referendum to overturn the fee hike, led by the San Diego Regional Chamber of Commerce. Several council members said that as part of the compromise, they hoped businesses would support a boost in the salaries of low-wage workers.
"We have to bring down the cost of housing and we have to bring up the minimum wage so people can afford to … get by on their paychecks, put down roots and raise families," said Councilmember Marti Emerald.
Kelly Cunningham, economist at National University System's Institute for Policy Research, agreed that it is hard for low-wage workers to survive on their own in San Diego.
"Even $28,000 a year seems too low," he said. "You really need at least two wage earners making that salary to afford to do well here. And when you have children, that adds to the expenses."
He questioned whether raising the minimum wage was the best solution, since it could price some low-skilled workers out of the job market. "It could reduce the job opportunities for people who are just starting out," he said.
But he added that "something has to be done about the ongoing issue of income equality. The middle class seems to be shrinking while the upper-income levels continue to gain wealth. That contributes to the affordability problems we're dealing with."