Conflicting reports on effects of raising minimum wage

San Diego could see wage rise to $11.50 by 2017

SAN DIEGO - Dozens of interfaith leaders rallied outside City Hall on Tuesday in support of the minimum wage in San Diego.

They prayed and then marched up to Mayor Kevin Faulconer's office, asking for his support for the increase. A representative said he was not available but would be glad to meet with them if they set up a meeting.

San Diego City Council voted to bump up the minimum wage from $9 to $11.50 in 2017. Since then, there has been a growing controversy about how the increase will affect San Diego.

"The answer is not a simple answer," said Dr. Tony Cherin, professor emeritus of finance at San Diego State University.

Cherin said change will happen, especially to small business.

"One way to keep the business model intact is to raise your prices," he said.

Businesses could also cut services. That was the case for the restaurant where Team 10 conducted the interview with Cherin.

The owner of the Brothers Family Restaurant said they are cutting hours starting next month in part due to the minimum wage increase.

Team 10 looked into several conflicting studies. The Department of Labor shows the 13 states that increased minimum wage this year saw an increase in job growth. That differs from the recent Congressional Budget Office report, which predicts raising the minimum wage to $10.10 an hour – like the White House supports – would cost half a million jobs.

"The controversy doesn't surprise me because I think in today's world, the minimum wage is practically impossible to exist on," Cherin said.

A study conducted by UC Berkeley's Labor Center looked at the city of Oakland. There is an initiative on the ballot to raise the city's minimum wage to $12.25. The study predicts business operating costs will increase slightly, but worker performance will also be improved.

There will be second reading of the ordinance in San Diego, expected later this month.

Faulconer does have the option to veto the proposal.

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