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Measure could have ripple effect across region, including East County

By Miriam Raftery


April 27, 2014 (San Diego) –San Diego is the fifth most expensive city in America to live in, according to the New York Times, which reports it takes 41.4% of gross income on average just to pay rent in San Diego.  An estimated 200,000 people in the city of San Diego earn minimum wage and about 300,000 households in  our region have incomes too low to meet basic expenses, according to the Center on Poilcy Initiatives.

Aiming to help those who are struggling to make ends meet, Councilman Todd Gloria is asking the City Council to approve a ballot initiative that would raise the minimum wage.  If approved by voters in November, the measure would raise the minimum wage citywide to $11.09 an hour in July 2015, $12.09 in July 2016 and $13.09 in July 2017, with cost of living increases after that.  The measure would boost incomes by 30 percent for the lowest  paid workers. It would also require employers to provide five paid sick days to workers.

Currently , the minimum wage is $8 an hour statewide, though California is raising the state’s minimum wage to $9 an hour in July and $10 on January 1, 2016. 

The measure will be heard in a Council committee on April 30 at 10 a.m. in City Hall and is expected to pass, advancing to the full Council, where the Democratic majority has indicated it will approve the measure for the November ballot.

A debate is raging over whether or not a minimum wage hike will ultimately help or hurt San Diego’s economy.  There’s also the question of how a sharp rise in San Diego’s minimum wage might impact businesses, workers and consumers elsewhere in our region, such as East County.

Gloria says the proposal would have a “major, positive impact for workers and their families and on the San Diego economy.” 

But the measure is opposed by Mayor Kevin Faulconer and the San Diego Chamber of Commerce.  The contend that if the city has a higher minimum wage than other places,some businesses may lay off workers or turn to automation if they can’t afford the higher wages.

In addition, Faulconer said in a prepared statement, “I believe the better way to support San Diego small businesses and protect jobs is to follow the minimum wage increase set at the state and federal levels, which ensures our city remains on a level playing field with surrounding cities that compete with San Diego for jobs.” 

Jerry Sanders, head of the Chamber, further called for the federal government to “equalize the national minimum wage” to keep a competitive playing field. That logic ignores, however, the fact that cities such as San Diego have higher costs of living, and thus arguably workers need higher pay.

Gloria countered critics.  “To those who fear losing their businesses, please remember that these additional wages will be spent by workers on necessities like food and services—it will go right back into San Diego’s economy.”

Raising the minimum wage could also save taxpayers money. How? By reducing the number of low-wage workers who currently are relying on food stamps and other public assistance to get by.

In fact, Bloomberg News recently reported, there’s a new breed of “welfare queens” these days – and the two biggest welfare queens in America today are Wal-Mart and McDonalds.  These corporations and others are actually encouraging their employees to apply for public assistance. Fast food workers receive over $7 billion in public assistance each year –and McDonald’s even has a “McResource” phone line to help employees sign up for welfare, food stamps and other forms of taxpayer-paid assistance.  Paying workers a living wage would reduce taxpayer-paid subsidies to working San Diegans.

Could the measure mean some jobs would be lost?  Perhaps. The issue largely boils down to which is more important—maximizing the total number of jobs, regardless of how workers are treated, or maximizing wages and benefits to help workers become self-sufficient.

Some have argued that minimum wage jobs are meant as entry-level positions, not jobs on which to support a family. But with a shortage of jobs in San Diego, increasingly minimum wage jobs are held not by students, but by adults with families to support in jobs such as janitors, hotel workers, and retail clerks. 

Another question is how an increase in San Diego’s minimum wage might impact outlying areas, such as East County. 

Many East County workers currently can’t afford to commute to San Diego for jobs due to high gas prices.  A 30% hike in minimum wage might  provide more attractive employment opportunities for some East County residents willing to commute to San Diego.  That in turn could help local businesses where those residents shop near their homes in East County.  Places such as Lemon Grove or La Mesa could see some shoppers from San Diego, if San Diego businesses raise prices to cover their increased labor costs. 

If large employers were to leave the region completely, of course, it could cost some local workers their jobs.  On the other hand, the minimum wage raise could entice some San Diego employers to move operations into areas such as East County to keep their labor costs down—creating new jobs out here.   It’s also possible that some East County employers might raise wages in order to compete for workers who may otherwise seek better paying jobs in San Diego.

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