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  • Berkeley's Minimum Wage Debate

  • SF Business Times:

    Berkeley to vote on highest minimum wage proposal in the country (Updated)

    Sep 15, 2015, 1:09pm PDT UPDATED: Sep 16, 2015, 10:39am PDT
    Downtown Berkeley Restaurants

    Spencer A Brown

    Downtown Berkeley has many restaurants that would be affected by a proposed minimum wage increase.

    Reporter- San Francisco Business Times
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    Update 9/16: The City Council voted to delay consideration of the minimum wage increase until a Nov. 10 special meeting.

    Berkeley's City Council is scheduled to vote tonight on a proposal from the city's Labor Commission that would raise the local minimum wage to $19 per hour by 2020, which would be the highest rate in the country.

    It would be the second minimum wage increase after Berkeley passed an ordinance last year that will increase the minimum wage to $12.53 per hour on October 2016. The Labor Commission's proposal calls for a $13 per hour minimum wage in 2016, followed by $1.50 per hour increases in each of the next four years.

    "We're really focused on what our workers need. There's so much poverty," said Wendy Bloom, chair of the Labor Commission. "So many people are leaving because people can't afford it."

    The City Council meeting will be held at 2134 Martin Luther King Jr. Way at 7 pm.

    Berkeley's vote comes as the push for a higher minimum wage has become a national movement led by labor groups amid growing awareness of income inequality.

    In May, Emeryville passed a minimum wage increase of $16 by 2019, despite opposition from some local businesses. Santa Clara County mayors are also moving towards a $15 per hour wage, after Palo Alto passed an $11 per hour measure in August. Los Angeles is slated to finalize a $15 minimum wage today, and New York State backed a $15 minimum wage for fast food workers, with plans to expand the same minimum wage to all sectors.

    However, Berkeley mayor Tom Bates said that the $19-per-hour measure is unlikely to pass tonight, but the city was looking to increase its minimum wage to around $15 an hour in the next few years to match neighboring cities like Oakland. The Council will likely take action by November, he said.

    "It's not realistic to go to such a high level so fast," said Bates of the $19 per hour increase. "I just don't think it's in the cards."

    He noted that smaller employers would be more vulnerable to the minimum wage increase, and Berkeley didn't have as many big-box retailers and manufacturers compared to nearby Emeryville. "Berkeley has lots of small businesses," he said. "Our biggest industry in Berkeley is restaurants."

    The city's business groups are also sharply critical of a higher minimum wage increase.

    "It does not appear that the Labor Commission has done any homework on how it would affect businesses," said Kirsten MacDonald, director of operations for the Berkeley Chamber of Commerce, which hosted an information session on the measure on Monday. She added that business groups have been shut out of the Labor Commission's proposals.

    MacDonald said one local business with 70 employees closed in the past year and cited the higher minimum wages as the primary factor, with a $2 increase in wages adding around $292,000 in annual costs.

    Businesses typically increase prices to offset wage increases. Academic studies haven't found a link between higher minimum wages and businesses closing, Ken Jacobs, chair of UC Berkeley's Labor Center, told the Business Times in April.

    It is still too early to study the impact of higher minimum wages in the Bay Area, because new laws have only been in effect for the past year, said Jacobs.

    Roland Li covers real estate and economic development