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Businesses weigh referendum over minimum wage

After the City Council on Monday voted to start increasing the minimum wage without putting the issue to a public vote, business groups throughout San Diego were mulling whether to launch a ballot referendum of their own to overturn the ordinance.

"They're weighing all of their options, including a public vote," said Tony Manolatos, spokesman for the Small Business Coalition, an ad hoc group created to oppose the wage hike, with backing from the San Diego Regional Chamber of Commerce, the California Restaurant Association and the San Diego Neighborhood Markets Association. "They should have a decision within the week."

Manolatos added that other than a veto from Mayor Kevin Faulconer -- which would likely be overridden by the same 6-3 super-majority that passed the ordinance -- a ballot referendum may be the only real option for overturning the measure.

But that would be costly, entailing as much as $300,000 just to gather petitions to qualify for the ballot. And the outcome would be uncertain, since polls indicate that the public at large supports raising the minimum wage, which has stagnated over the past three decades.

A recent poll by California Bank & Trust found that 72 percent of the businesses it surveyed throughout the state -- including a similar percentage in San Diego County -- felt that raising the minimum wage would have a neutral or positive impact on their businesses.

On the other hand, a survey released last month by the San Diego Regional Chamber of Commerce said that concerns over the local minimum wage have been growing since January.

If the businesses do launch a petition drive, it would be the third time this year that they have turned to the ballot box to overturn actions by the City Council.

Just last month, local shipyards used a petition drive to overturn the City Council's rezoning plan for Barrio Logan.

Earlier, the Chamber of Commerce -- joined by leading real estate developers -- used the threat of a ballot referendum to temporarily block efforts to hike the so-called "linkage fee" that supports affordable housing. The City Council will be discussing a compromise version of that measure later this week.

In a special evening session that ran from 6 p.m. to past 9 p.m. on Monday, the council voted to hike the local minimum wage from the current $9 to $9.75 on Jan. 1, 2015; $10.50 on Jan. 1, 2016; and $11.50 on Jan. 1, 2017.

In addition, all local workers would have the right to earn up to five days of paid sick leave, depending on how long they have been on the job.

The proposed increase was milder than in the original version of the ordinance, which would have raised the minimum to $13.09 by 2017.

Council President Todd Gloria – who spearheaded the ordinance – said he had lowered the target largely in response to concerns from businesses, as well as fellow council members.

But that wasn't enough to staunch the criticism from local businesses, who said the measure would put the city at a competitive disadvantage against neighbors like Poway, Chula Vista and Escondido, who use the lower statewide rate.

In addition, they complained that the across-the-board increase had no provisions for youth job-training programs, employees who receive tips or small businesses.

"Nobody who works full-time should live in poverty," Gloria said. "I would have supported a minimum wage increase that had a provision protecting small businesses -- for example, businesses with less than 12 employees."

Gloria said he feared the wage would become too unwieldy if every group received the exemptions it was looking for.

Critics also complained about the way that the measure was passed, saying that it had not allowed enough time for public comment and that it should have been put onto the ballot rather than being passed as by the council itself.

"This is a democracy, not a monarchy," said Mark Arabo, CEO of the San Diego Neighborhood Markets Association. "Any issue that is this large should be put before the people."

Chamber of Commerce CEO Jerry Sanders said he was "disappointed" in the council for making a "rushed decision that did not give the public adequate time to respond."

Gloria, who has been publicly pushing to raise the minimum wage since last fall, rejected the criticism.

He had mentioned it as one of his top goals in his state of the city address in January, during his stint as interim mayor following the ouster of Bob Filner.

And the City Council has been holding public debates on the issue since March – both in committee sessions, as well as among the Chamber as a whole – drawing opinions from businesses, business associations, workers and community activists.

Gloria had initially envisioned the measure going to a public referendum. But following the petition drives over the linkage fee and Barrio Logan rezoning plan – in which the shipyards spent $1.4 million – Councilmember David Alvarez suggested that the City Council pass the measure on its own instead, which has been the practice in other cities that have adopted their own minimum wages, such as Seattle, San Jose and San Francisco.

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San Diego Regional Chamber of Commerce

Company Website

402 West Broadway Ste., 1000
San Diego, CA 92101

San Diego Regional Chamber of Commerce Executive(s):

Jerry Sanders

  • Chief Executive Officer, President

Ruben Barrales

  • Chief Executive Officer

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