Income gap

news@sfbg.com

It seems like San Francisco may surpass itself as the city with the highest minimum wage in the country, as labor activists and business groups are each pitching their own fall ballot measures to raise wages for the lowest paid workers.

The city’s current minimum wage of $10.74 is the highest in the country, but that still isn’t enough, according the labor activists, not in the city with the most expensive rent in the US and one of the largest income gaps.

“We have the highest growing gap between the rich and the poor, and the economic disparity is so high right now,” said José Argüelles of Young Workers United. He said the raising the minimum wage “isn’t the whole solution, but it’s part of it. Folks working full time in San Francisco should be able to afford to live in San Francisco.”

But sometimes even working full time in San Francisco isn’t enough to live here. A 2012 study by the San Francisco Department of Health found that even in the most inexpensive neighborhoods of the city, one would have to work 3.4 full-time minimum wage jobs to afford rent in a two-bedroom market rate apartment. In the priciest neighborhoods, one would have to work up to eight full-time jobs to afford rent.

All of this is occurring at a time when minimum wage debates are taking place across the country. President Obama has suggested raising the federal minimum wage from the current $7.25/hour to $10.10/hour, although Congress has been less receptive. Here in California, the state minimum wage of $8/hour will rise to $9/hour this July, and $10/hour by 2016.

The San Francisco ballot measure favored by labor activists is an initiative to raise the hourly minimum wage to $15 by 2017, with a sliding time frame depending on the size of the business. Proponents of the measure, dubbed the Minimum Wage Act of 2014, are just beginning to collect the necessary 9,702 signatures to qualify for the November ballot, and a recent poll found that 59 percent of likely voters supported the increase, while only 36 percent were opposed.

Business groups are usually the first ones to object to higher wages, but the San Francisco Chamber of Commerce and other small business-leaders are working with Mayor Ed Lee to craft their own, albeit more watered-down, ballot measure to increase pay. Despite their efforts, the $15/hour initiative took them by surprise and they are “outraged,” according to a statement released by the Chamber.

“This initiative is nothing more than a thinly veiled attempt to influence the outcome of the consensus-building process that will begin this week under the leadership of Mayor Ed Lee,” Chamber President Bob Linscheid said in the statement.

But many small businesses actually want to see the minimum wage increased, said John Eller of Alliance of Californians for Community Empowerment, one of the labor groups sponsoring the $15/hour initiative.

“What we heard when we talked to small businesses was that big money is coming in to buy up properties, that prices are getting jacked up, and that they are getting displaced, just like the residents of San Francisco,” Eller said. “But genuine interest in San Francisco, supporting young people, getting people out of poverty, and dealing with displacement were the themes that kept coming up.”

The business community wants to see the higher minimum wage phased in over a longer period of time and supports a more “moderate” wage, although an exact rate has not been decided, according to an email sent by Henry Karnilowicz, president of the San Francisco Council of District Merchants Associations. Other concessions that business leaders ask for include a separate, lower minimum wage for tipped servers and new hires in-training.

Raising the minimum wage “is about being fair and being reasonable,” said Karnilowicz. “It’s not true that small businesses are making a fortune, and I’d hate to see a big Walmart or Target coming into town to take their place.”

But Argüelles says that including special exceptions and a piecemeal law is a step in the wrong direction.

“In the past, San Francisco has led the way [with fair labor laws],” he said. “I think we can set a higher standard than that.”

Opponents to raising the minimum wage often claim that doing so hurts jobs and the economy, but a study from economists at UC Berkeley says otherwise. Unemployment in San Francisco has dropped since the last major minimum wage increase, and businesses absorb the extra labor costs through reduced employee turnover and improved efficiency.

The study also found that affected workers are largely adults and disproportionately women and people of color, two groups for whom the income gap is especially vast.

A measure qualifies for the ballot in one of two ways: either by garnering enough signatures through the initiative process, or being placed on the ballot directly by the mayor or a group of four or more supervisors. As of now, it seems plausible that San Franciscans will have two minimum wage measures to choose from this year, one from signatures and another from Mayor Lee.

On May 7, the Chamber released a press release stating that it’s seeking a single, consensus measure rather than two competing ordinances. Labor activists also hope to see one measure, Argüelles said.

There are no details yet on what Lee’s minimum wage ordinance would look like, if he sponsors one. There’s potential for a compromise between labor activists and business leaders, meaning one ballot measure with wide support. Otherwise, it will likely be one measure pitted against the other.

The deadline for Lee to submit his ordinance to the Department of Elections is June 17.