City Council to consider plan to set local rate at $11 per hour, with a view toward $15 in 2018

Palo Alto is a relative latecomer when it comes to establishing a minimum wage, but a new proposal that the City Council is set to discuss Monday, Aug. 24, looks to place the city ahead of the regional pack.

The council will consider a proposal that would set the local minimum wage at $11 an hour starting in 2016 and put the city on a path to see the figure rise to $15 by 2018. The plan, which was crafted and unanimously endorsed by the council’s Policy and Services Committee in April, would align the city with a broader push across the state to raise the minimum wage.

The California minimum wage is set to rise from $9 to $10 per hour in January 2016, though cities from across the state are moving ahead with their own local laws that go beyond this standard.

San Jose voters led the way by adopting a minimum-wage ordinance in 2013, with the hourly rate currently set at $10.30 and tied to consumer price index (CPI) increases. San Francisco followed suit last November with an even more aggressive proposal, one that increased the wage to $12.25 on May 1 and that gradually raises to $15 by July 2018.

Berkeley, Emeryville, Richmond, Oakland, San Diego, Los Angeles and San Diego have all adopted minimum-wage ordinances in recent years, with varying amounts and adjustment mechanisms. In Santa Clara County, the cities of Campbell, Morgan Hill and Santa Clara are now considering such ordinances.

Palo Alto’s new law is modeled in many ways after those of its neighbors, namely Mountain View and Sunnyvale. Councils in both cities adopted ordinances last October that set the minimum wage at $10.30, effective July 1 of this year. The ordinances also call for annual adjustments in the minimum wage, based on the CPI.

Mountain View, like San Francisco, has also embarked on the “$15 by ’18” path, which Palo Alto also plans to follow.

Though Palo Alto has only recently started exploring a local minimum-wage ordinance, it is moving fast. The topic came up during a debate before last November’s council election, with just about every candidate enthusiastically endorsing a higher minimum wage. In February, four council members formally sparked the move in a colleague’s memo that proposed a local minimum wage.

Councilmen Marc Berman, Pat Burt, Tom DuBois and Cory Wolbach cited the high cost of living in Palo Alto and noted that if the minimum wages were adjusted based on local cost of living, they “would be considerably higher in Palo Alto and the Peninsula than most elsewhere in the state.” The memo called the proposed minimum-wage ordinance “a modest but constructive step toward providing adequate income for all workers.”

“Our lowest wage workers perform valued services in Palo Alto and often have to work multiple jobs with long commutes to barely make ends meet,” the memo states. “A local minimum wage would be a modest step in supporting these workers who are vital to maintaining the services we value and that are essential to our local economy. In addition, the strength of our community and society relies on maintaining a level of economic fairness and opportunity for all.”

While most cities are focusing on their own particular minimum-wage ordinances, others are building coalitions and calling for more coordination. In June, the mayors of Mountain View and Sunnyvale co-wrote a letter to their counterparts in Palo Alto and Campbell (which is also pursuing a minimum-wage ordinance) urging a “joint approach” to reaching the $15-per-hour standard.

“Raising the minimum wage to $15 by 2018 will … help lift working families out of poverty,” Mountain View Mayor John McAlister and Sunnyvale Mayor Jim Griffith wrote in the letter. “With more income, minimum-wage workers would have more spending power and inject more money into the local economy, which would benefit businesses through increased sales and local governments through increased sales-tax revenue.”

McAlister also serves on the Cities Association of Santa Clara County subcommittee that focused on the minimum wage and that in June released a report calling for better regional coordination of these efforts.

“A lack of consistency in minimum wage rates creates serious problems for jurisdictions, locations, and employers,” the subcommittee wrote, noting that differences in minimum-wage requirements can affect the city’s economic competitiveness. “Additionally, jurisdictions have already received reports from employers in Santa Clara County stating that cities without an increased minimum wage are losing quality employees to opportunities in cities with higher minimum wages.”

If the Palo Alto City Council embraces the specific recommendations from its committee, the city’s minimum wage would hit the $11 mark in January, exceeding the $10.30 levels in Mountain View and the state threshold of $10.

It would be adjusted every year based on cost of living and it would cover employers who are either subject to the city’s business registry requirements, conduct business in Palo Alto or maintain a business facility in the city, according to a new report from the Office of the City Attorney. The city also plans to enter into an agreement with the City of San Jose Office of Equality Assurance to enforce the local ordinance, a similar arrangement to the one that the office enjoys with Mountain View and Sunnyvale.

Palo Alto’s proposed ordinance also expressly prohibits retaliation against employees who complain about an employer who doesn’t comply with the law. Violators could face an daily fine, an administrative compliance order or, in the most extreme cases, a civil action launched by the city for injunctive relief.

In the lead-up to the final decision, the city is surveying local residents and businesses to get their thoughts on raising the minimum wage (the survey can be accessed at here). The city also asked residents on its online forum, Open City Hall, what they think about the proposal and received 52 responses, with about two-thirds saying they are in favor of the proposal.

Those supporting the change cited the high cost of living in Palo Alto and the need to support people who work here. Barron Park resident Joel Davidson wrote on the forum that at least a $15 wage is “necessary in this area of opulence and high rents and prices.” Alexandra Acker-Lyons of Palo Verde concurred and said living in Palo Alto or anywhere near the city is “prohibitively expensive.”

Opponents characterized the plan as well-meaning but ultimately misguided. Darryl Fenwith of Downtown North wrote on the city’s forum that while it would be nice to find a way to help low-skilled workers live in high-priced areas like Palo Alto, raising the minimum wage could actually hurt workers by “denying them employment opportunities, reducing work hours, or being dismissed from employment.” While raising the minimum wage may hurt some, it would hurt others, Fenwith wrote.

“And really, these conclusions make sense — employers react to price signals,” Fenwith wrote. In essence, they see a raise in minimum wage as equivalent to a tax on low-skilled workers.”

by Gennady Sheyner / Palo Alto Weekly

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