San Diego City Council approves minimum wage increase

SAN DIEGO - The minimum wage in San Diego will go up at the beginning of next year after the City Council on Monday evening approved the hike and a requirement that companies offer five earned sick days annually.

By passing the increase directly, the council, by a 6-3 margin, skipped the original plan by council President Todd Gloria to put the issue to a public vote in November.

The ordinance will increase the hourly minimum wage to $9.75 on Jan. 1, $10.50 in January of 2016 and $11.50 in January of 2017. Beginning in January 2019, the pay scale will be indexed to inflation.

"San Diegans know that a stronger workforce and a stronger economy will result from passage of the proposal (tonight) and will get San Diego just a bit closer to being a great city," Gloria said.

He said San Diego is joining a national movement toward higher wages.

"This is a reasonable, common sense proposal that maintains tremendous benefits for our workers and our local economy while reducing the potential impacts on businesses," Gloria said.

Supporters said having extra money in their pockets will make it easier to live in a high-cost city. Gloria' original proposal had been $13.09 an hour, a figure that a community group pegged as the amount needed to live here on a no-frills budget.

On the other hand, Channelle Hawken, of the San Diego Regional Chamber of Commerce, said raising the minimum wage above that of California would put the city at a competitive disadvantage.

"We are already seeing and hearing from our members that have businesses that are raising prices and cutting jobs in response to the current increase in the (state) minimum wage," Hawken said. The state minimum hourly
wage went from $8 to $9 on July 1. 

Hawken said a recent survey of chamber members found that the proposed minimum wage increase is a bigger concern than healthcare expenses, and that 14 percent of members are considering moving out of San Diego.

Harry Schwartz, a former critic of Gloria's proposal, said he is now on the fence.

Schwartz, who co-owns the downtown Ace Hardware with his sister, said he supports the wage hike to $11.50 an hour "as we believe this is a compromise that will help address San Diego's poverty issue without decimating our small business."

However, he said he could not offer full support because the plan does not envision lower wages for youth workers or trainees.

Councilwoman Sherri Lightner said a tiered system would violate state labor law.

Council members Mark Kersey, Scott Sherman and Lorie Zapf cast the dissenting votes.

Supporters of the sick leave requirement said it will keep employees from showing up for their jobs while ill and infecting the public and their co-workers.

Mayor Kevin Faulconer's office released the following statement Monday evening:

"Mayor Faulconer believes San Diego thrives through its entrepreneurs, start-ups and small businesses that help everyday San Diegans put food on the table and provide for their families. As mayor, he is committed to helping San Diegans succeed and create opportunity. He has been very clear that he will not put the brakes on our recovering economy by placing a hindrance on local small businesses that will force them to cut jobs or hire fewer people. Mayor Faulconer is working to provide economic opportunity and jobs for all San Diegans, which is why he does not support this proposal."

Matt Awbrey
Deputy Chief of Staff & Chief of Communications

San Diego Regional Chamber of Commerce CEO Jerry Sanders issued the following statement Tuesday criticising the council's decision as well:

The San Diego Regional Chamber of Commerce remains deeply concerned about the negative impacts a city mandated minimum wage increase will have on San Diego businesses. We are already seeing, and hearing from our members, that businesses are raising prices and cutting jobs in response to the July 1 State increase to $9 per hour.

Raising San Diego’s minimum wage and sick leave above and beyond what the state has already mandated puts San Diego at a competitive disadvantage compared to nearby cities. The Chamber takes the position that regulations concerning wages should be initiated federally to ensure a level playing field, and at a minimum, they should be set at the state level to avoid city-by-city inconsistencies that would put San Diego’s job creators at a competitive disadvantage.

While other jurisdictions have had a more comprehensive and transparent process when raising their minimum wage, in the last two instances, the Council has provided a revised proposal only a very short time before the Council meeting, not providing job creators time to adequately digest and respond to the material. The Chamber and our members are disappointed that the San Diego City Council has rushed the process through and not taken the time to wait until the economic impacts of the state mandated minimum wage increase to $10.00 by January 2016 are fully understood and can be analyzed.

The Chamber is seriously discussing with the business community the options available to further oppose the Council’s rushed decision that did not give the public adequate time to respond. We will be making a decision as to what option we will move forward with very soon.

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