With the debate over the minimum wage about to rev up next week, the San Diego County Taxpayers Association on Thursday suggested that the local economy could be damaged if San Diego raises the wage level to $13.09 over the next three years and offered that a more "no frills" approach would peg the target nearly $2 lower.
"I don't speak for the business community, but there might be more acceptance for a lower wage limit," said Sean Karafin, president of the association.
Karafin wrote a study co-sponsored by the San Diego Regional Chamber of Commerce that suggested $11.24 could be a livable wage in San Diego, as long as workers can double up on their living spaces.
The report comes less than a week before San Diego City Council President Todd Gloria is scheduled to air a proposal at the council's Economic Development and Intergovernmental Relations Committee to raise the wage to reflect the city’s living costs.
In a preliminary meeting last month, Gloria outlined a proposal to increase the wage to $11.09 by July 2015, $12.09 by July 2016 and $13.09 by July 2017, with annual adjustments for inflation afterward.
The $13.09 target is based largely on estimates by the liberal Center on Policy Initiatives of how much it would cost a worker in San Diego to pay rent and other expenses without the aid of food stamps or welfare.
The targets in the proposal were merely meant as a starting point for negotiations, said Katie Keach, Gloria's spokeswoman.
"[Gloria] appreciates all proposals for setting the wage, the implementation plan and other details that are of interest to stakeholders," Keach said.
CPI economists said their figures are more in line with the city's high cost of living than the ones put forth by the taxpayers association. Their calculations are based on typical costs for food, utilities and transportation as well as rent for a single person in a one-bedroom apartment.
Karafin said the CPI study "fails to take into account that many people choose to share two-bedroom apartments and therefore have lower living expenses." He based his study on two workers sharing a two-bedroom apartment.
But Robert Nothoff, policy and research analyst at the CPI, said many minimum-wage workers are middle-aged and have children, so the lower estimate would require that families — and not just workers — share the same quarters.
Nationwide, more than 30 percent of minimum-wage workers have children. And a recent study by National University System Institute for Policy Research showed that in San Diego, 40 percent of minimum-wage workers are older than 30, although it did not mention how many have children.
Beyond the impact on the workers, Karafin's report focused on how a wage increase would affect businesses and the economy. He said that while some businesses would benefit from a large wage hike — including lower turnover among employees and more purchasing power among consumers — others would have to scale back benefits or lay off workers to make up for the increase in costs.
But the CPI said cities that have already raised minimum wages have not had that result. Nothoff said after San Francisco raised its wages, employment actually increased — including among the businesses most affected by the wage increase — while jobs decreased in surrounding areas.
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