San Diego's minimum wage will rise from the current $8 per hour to $13.09 per hour over the next three years under a plan City Council President Todd Gloria and President Pro Tem Sherri Lightner unveiled on Wednesday.
If the proposal is approved by voters in November, it is projected to boost the wages of roughly 200,000 San Diegans by an average of $2,800 per year once it is fully phased in.
The plan also requires businesses to let their workers earn at least five paid sick days per year, which can be used for personal illness or to care for sick family members. Currently, an estimated 260,000 workers in San Diego do not have access to that type of pay.
Gloria said the wage boosts will not only help low-paid workers make ends meet, but will also help local businesses and economic growth, since the workers will spend the higher wages -- projected to total an extra $580 million per year by 2017 -- on such necessities as food, clothing and rent, "which will go right back into the San Diego economy."
The San Diego Regional Chamber of Commerce almost immediately spoke out against the proposal, saying it would put the city at a competitive disadvantage against nearby cities that stick with the statewide minimum. And some local business executives argue it will force retailers, restaurants and other businesses to raise their prices to keep pace.
"We can't just lop off 10 percent of our workers to pay for the costs of the wages, so there aren't a lot of options except for passing the costs along to the consumers," said Harry Schwartz, owner of the Ace Hardware outlet in downtown San Diego.
Currently, the federal minimum wage is set at $7.25 per hour, although President Obama is trying to raise it to $10.10. Twenty-one states already have higher minimum rates than the federal government, including California, where the minimum wage is now set at $8 per hour, which is slated to rise to $9 on July 1 and $10 on July 1, 2016.
Local groups ranging from the San Diego Workforce Partnership to the local Council on Policy Initiatives (CPI) say that even under California's higher rates, minimum-wage workers cannot make ends meet unless they either work two or more jobs at once or rely on public assistance, such as food stamps and welfare, which subsidizes the low pay.
Working closely with the CPI, Gloria and Lightner developed a proposal to raise San Diego's minimum to $11.09 in July 2015, $12.09 in July 2016 and $13.09 in July 2017 and with annual adjustments afterwards, which they believe will help low-paid workers keep pace with San Diego's high cost of living. According to University of San Diego economist Alan Gin, the local minimum wage would top $13 if it had merely kept pace with inflation since its peak year of 1968.
Critics of the wage hike say it could lead some businesses to relocate to nearby cities that decide to stick with the state minimum instead of setting their own. But CPI economist Peter Brownell said there was no evidence of such dire impacts occurring in other cities that adopt higher minimum rates. In San Francisco, where the minimum is set at $10.74 and where the total compensation package at larger employers tops $13, there is no indication that its business growth, business failure rate and costs are acting any different than neighboring Alameda County, which has stuck with the statewide minimum.
Gloria's proposal will be aired at the next meeting of the City Council's economic development and intergovernmental relations committee at 10:30 a.m. on April 30, with the goal of having the full council discuss it in June or July to prepare it for the ballot in November.
He invited all interested parties to comment on the proposal starting on April 30 so that "we can ultimately put forth something that San Diegans will actively support and embrace."
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