In-Depth: Could California get an $18 an hour minimum wage?

Ballot initiative would let voters choose in November
Posted at 6:19 AM, Jan 12, 2022

SAN DIEGO (KGTV) - Businesses across San Diego are just getting used to a $15 an hour minimum wage, which took effect on January 1, 2022.

Now, there's a new push to raise the minimum wage again.

"Anyone who lives in California knows ($15 an hour) is not enough because things in California for decades have become more and more expensive, but wages haven't risen at the same pace," says Joe Sanberg, the leader of a group that filed a ballot initiative to raise the minimum wage to $18 an hour.

The "Living Wage Act of 2022" initiative would increase the minimum wage across California to $16 an hour in 2023, $17 an hour in 2024, and $18 an hour in 2025 for businesses with more than 25 employees. Smaller companies would have to meet those marks one year later. The measure says wages after that would be "adjusted to keep pace with the cost of living in California."

"It's critical that we do this now," says Sanberg. "There are so many Californians working full time, and in some cases, working more than full time, but don't earn enough to afford life's basic needs."

A recent study found the cost of living in San Diego has grown by 18.9% since 2020. Sanberg says if minimum wage had kept up with the cost of productivity since 1960, it would be $24 an hour now.

The California Labor Coalition, who helped push the $15 an hour minimum wage through the state legislature, says they have no official position on the $18 an hour idea. But spokesperson Steve Smith told ABC 10News that rising wages need to be part of the solution to make California more affordable.

"Look at the cost of housing in CA today," Smith says. "Fifteen dollars an hour is a major improvement. We're happy we've hit that milestone. But I think if you talk to any low-wage worker in CA, they would tell you that, given the cost of living here in this state right now, we need to continue to work on this issue and continue to push that wage upward."

Not everyone agrees. Dr. Alan Gin, an economics professor at the University of San Diego, says labor shortages from the pandemic are already pushing wages above the $15 an hour minimum. He says another forced raise would hurt small businesses.

"I think it will put some strain on some businesses," Dr. Gin says. "What they're going to have to do is increase prices to deal with the increased labor cost. That, combined with inflation, would be difficult for businesses."

Dr. Gin says a more significant issue towards affordability in California is the cost of housing.

"I think something needs to be done as far as the housing front is concerned," he says. "Lifting minimum wage might help a little bit. But I think there are more serious issues than in terms of housing costs."

In City Heights, Rodina Attiq says her business, El Borrego, is making changes to deal with the increased labor cost.

Customers order at the counter instead of having a waiter come to their table. The back patio now hosts wine and beer tasting events, and she's looking for other, contracted work like school catering to increase her margins.

But, Attiq says she doesn't mind paying her workers a bit more.

"Of course, it's affecting our business. We have to raise the prices, and we're in an area where we cannot afford to raise them very high," Attiq says. "But we're happy because the employees need it... San Diego is not a cheap city. It's expensive to live here."

Sanberg says an increase in business and customers would offset the increased labor cost because a higher minimum wage means more people have more money to spend.

"When workers do better, everyone does better, including business people," says Sanberg. "When you raise people's wages, they have more money to buy things, which means they have more money to spend in your business."

Because of that, Sanberg believes his initiative will easily pass if it hits the ballot. His group plans to start gathering signatures later this month. They need around 700,000 to qualify for the November election.

According to online public records, the "Living Wage Act of 2022" is pending a review from the State Attorney General's office. The public comment period for it ended on January 3, 2022. It is expected to move to the Secretary of State's office by February 8.

For a history of minimum wage in California, click here.