Written by Alyssa Burley
At a recent Leaders of Change luncheon hosted by The North San Diego Chamber and partnered with the San Diego Regional EDC, San Diego County Taxpayer Association, San Diego Workforce Partnership® and KPBS, the minimum wage debate continued. The panel discussed the impact a minimum wage increase would have on San Diego’s economy. The event was held on October 7, 2014 at Sony Electronics, Inc. in Rancho Bernardo.
Mark Sauer, host of the KPBS show, Roundtable, was the event’s moderator. He was joined by Jason Roe from Revolvis and Mel Latz from Manpower. Kevin Haagenson from Francesca’s Restaurant Group was also on hand to provide insight into how an increase in the minimum wage would affect local businesses.
In comparison, California’s minimum wage as of July 1, 2014 is $9.00 per hour. The State’s minimum wage is set to increase to $10.00 per hour on January 1, 2016 – still much less than San Diego’s proposed minimum wage.
Many business owners expressed concern the San Diego minimum wage increase would negatively affect the local economy. Consequently, 42,960 signatures were gathered to allow voters a chance to weigh in on the minimum wage issue.4
On Monday, October 20, 2014, the City Council unanimously voted to allow a city-wide vote on the measure. It will be voted on in June 2015.4
At the luncheon, Mr. Roe began by outlining the opposition’s talking points:
- Voters should have the opportunity to vote on the minimum wage increases.
- Regions have widely different economies; therefore, a single federal or State-wide minimum wage is not appropriate. Though, a city-by-city minimum wage is impractical and would likely entice businesses to move to nearby cities outside of San Diego to avoid higher minimum wages.
- Small businesses cannot afford to absorb the increase in cost. However, big business sees the minimum wage increase as a positive because it will put their smaller competitors out of business.
- An increase in the minimum wage would drive up costs which would be passed onto the consumer. As a result, low wage earners may have more dollars in their pocket, but prices will be higher than before.
- The minimum wage is not meant to be a living wage. It is designed as an entry point into the workforce and should not be considered the earner’s maximum wage.
Mr. Katz responded with several antidotes about San Diego residents trying to make ends meet on a minimum wage. His points were:
- A person working 40 hours a week at $9.00 per hour falls below the poverty line.
- Ten years ago, the City approved an ordinance that created a $10.00 minimum wage (now $11.85) for full-time City employees and sub-contractors’ employees working for the City. The opposition at the time said it would cost too much and hurt local businesses, though it hasn’t.1
- A local young adult works and goes to school in San Diego. At the end of the month, after paying rent on a one bedroom apartment, they have $218 left for food, gas and utilities.
- 43% of those earning minimum wage are over 30 years old and would benefit from an increase in the minimum wage.
- With an increase in minimum wage, low wage earners would spend the extra funds in their local communities. They are not expected to save it.
- 38% of San Diego residents earn the minimum wage.
- San Francisco, Oakland and Los Angeles will also be voting on a higher minimum wage – much higher than San Diego.
- Residents should not have to choose between putting food on the table and keeping the lights on.
The average wage for jobs in the nonmetallic mineral mining and quarrying industry in California was about $57,000 per year or about $30 per hour in 2012 – double the poverty line for a family of four.2,6
Setting wages by mandate is an artificial modification of the labor market. Market wages are set by the demand for a skill set. Where the demand is high and the supply is low, higher wages reflect the shortage of skills needed to fill the demand. Conversely, where product availability is high (i.e., unskilled labor) and the demand is low, wages will be low.
If an individual desires to improve their rate of pay, they should seek to improve their skills in areas of higher demand. At some point, one must take some personal responsibility for their chosen career path.
Alyssa Burley is the community outreach and marketing manager for EnviroMINE, Inc.
1City of San Diego. (2014) San Diego Municipal Code. Article 2: Administrative Code, Division 42: City of San Diego Living Wage Ordinance (added 6/6/2005). Retrieved from: http://docs.sandiego.gov/municode/MuniCodeChapter02/Ch02Art02Division42.pdf
2Bureau of Labor Statistics. (2012) “California Nonmetallic Mining and Quarrying 2012. Retrieved from: http://www.bls.gov/ces/data.htm
3Lobosco, K. (August 18, 2014) CNN Money. “San Diego defies mayor, raises minimum wage.” Retrieved from: http://money.cnn.com/2014/08/18/news/economy/san-diego-minimum-wage/
4Ojeda, A. (October 20, 2014) 7 San Diego. “Minimum Wage Increase Headed to Ballot.” Retrieved from: http://www.nbcsandiego.com/news/local/Minimum-Wage-Increase-Headed-to-Ballot-279840462.html
5State of California, Department of Industrial Relations. “History of California Minimum Wage.” Retrieved from: http://www.dir.ca.gov/iwc/minimumwagehistory.htm
6United States Census Bureau. (2013) “Poverty Thresholds by Size of Family and Number of Children.” . Retrieved from: http://www.census.gov/hhes/www/poverty/data/threshld/index.html