Palo Alto eager to move ahead with minimum wage law

City Council votes to refer idea to committee for further vetting

An effort to raise Palo Alto's minimum wage received a big lift Monday night when the City Council enthusiastically agreed to pursue the idea.

The council voted 8-0, with Liz Kniss absent, to refer to its Policy and Services Committee a proposal to establish a citywide minimum wage. Palo Alto's new law will likely mimic similar ordinances that were adopted last year in Mountain View and Sunnyvale.

The proposal was made in a colleagues memo from councilmen Pat Burt, Marc Berman, Tom DuBois and Cory Wolbach, who argued that the change is needed because of the high cost of living in Palo Alto. California currently has a minimum wage of $9 an hour, which is set to increase to $10 an hour next year.

"Despite our general affluence, along with high costs of living and working in Palo Alto, we currently have the same minimum wage as low cost regions of California and lower minimum wages than some neighboring cities," the memo stated.

Burt said during Monday's brief discussion that the proposals in Palo Alto and elsewhere are based on a general notion that the Peninsula has a significantly higher cost of living than the state as a whole.

"Yet income from our present minimum wage is significantly substandard from what's necessary for survival in this region," Burt said.

Several members of the public, including a large contingent from the faith community, made the same point. Paul George, executive director of the Peninsula Peace and Justice Center, was among them. He submitted to the council a letter signed by more than 300 residents and 13 organizations.

George told the council that while California's minimum wage is higher than the federal standard, it "still isn't high enough." That's why Mountain View, Sunnyvale and San Jose have started their own minimum wage, he said.

"We need to take this step in our town as well," George said.

The council agreed. Councilman Greg Scharff said the city should closely look at what other cities have done and see what it can learn.

Councilman Eric Filseth also advocated moving ahead with the ordinance. The standard argument against a minimum wage, Filseth said, is that it would destroy service jobs.

"I don't think this is likely to happen in Palo Alto," he said. "I think we should go for it."

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13 people like this
Posted by liberty
a resident of University South
on Feb 10, 2015 at 12:56 pm

I think the amount of negative unintended consequences this will create will far outweigh the warm fuzzy feeling they are giving themselves.

2 people like this
Posted by musical
a resident of Palo Verde
on Feb 10, 2015 at 1:17 pm

Are they going with Aram James' call for $25/hour?

16 people like this
Posted by CrescentParkAnon.
a resident of Crescent Park
on Feb 10, 2015 at 1:37 pm

I am pro the raising of the minimum wage, it is a good idea that a vast majority of
economist know will work to grow the economy.

I think the so-called unintended consequences are scare tactics and will be very minimal.
If anything is killing small business in Palo Alto it is exorbitant rents, we have seen it
over and over here in the pages ... I mean screens ... of Palo Alto Online as small
stores are forced out ... not because of their employee's salaries, but because their
leases expire and landlords feel like they have them over a barrel so they raise their
rents too high. And then some places stand idle with nothing going on in them,
sometimes for years.

BUT, I would really look forward to the city hiring some consultants at minimum wage. ;-)

15 people like this
Posted by Rogue Trader
a resident of Green Acres
on Feb 10, 2015 at 2:41 pm

Job losses will be most felt during the next, inevitable economic slowdown, when employers will be quick to reduce their expenses, and labor is typically the top expense.

Here's a recent article on a bookstore closing in SF, citing the new minimum wage hike there. They note that they survived the great recession of 2008, they survived massive rent hikes, they survived Amazon, but they could NOT survive the new SF minimum wage hike. They explain their business analysis here.

Web Link

6 people like this
Posted by Gus L.
a resident of Barron Park
on Feb 10, 2015 at 7:43 pm

A good reason for companies to charge the City more for Services Goods and Labor.
In turn the City will charge more for Utilities and Recycling and Garbage and....

2 people like this
Posted by Joseph E. Davis
a resident of Woodside
on Feb 10, 2015 at 10:15 pm

This is excellent news if you are a high paid robotics engineer and terrible news if you are a teenager looking to start gaining job skills at the bottom of the ladder.

If you are looking to increase income inequality, I cannot imagine a better policy than to make it illegal to hire low skilled workers in a profitable fashion.

7 people like this
Posted by .For City Hall?
a resident of College Terrace
on Feb 10, 2015 at 11:03 pm

Minimum wage for everyone who works at City Hall. Is that the proposal? Council members would get a slight increase in pay (plus the FT employee benefits they already receive) and others would take a bit of a hit in pay. Fair enough.

13 people like this
Posted by Chris
a resident of Charleston Meadows
on Feb 11, 2015 at 1:58 am

I wonder how the City proposes to deal with the tipped service industry.

At the moment if you work for an average restaurant in Palo Alto as a waiter, your minimum wage, $9/hr, + tips = $25/hour. At high end restaurants in our area, the waiters can earn up to $100k/year.

Now, if the minimum wage increases to $15/hour, and all else stays the same, then the hourly wage will be more than $30/hr. For a waiter which requires easily learnable skills, and often have no higher education, does this sound right?

This means that the restaurant will need to increase your bill by17% to stay equivalent (labor cost is 1/3 of total cost of running a restaurant).

Now I ask, what is the goal here?

If the City/State wants to be more like socialist about this, and guarantee a living wage to all; perhaps it should simultaneously get rid of tipping altogether which is documented to be the most discriminatory form of compensation. (yes, good looking females with big breasts make the most tips). This way we all stay equivalent.

Last, I ask what janitors and dishwashers are supposed to earn? Often they get the jobs no one wants because they have no education nor speak English. And teenagers? Why would they need a living wage if most live with their parents and have zero experience?

Think about this, City Council before you vote.

4 people like this
Posted by CrescentParkAnon.
a resident of Crescent Park
on Feb 11, 2015 at 2:02 am

Rogue Trader ... A lot is being made of one small bookstore is going out of business
that would probably go out of business anyway. This seems to be the best the
opposing side can do ... but all the employees of that bookstore say they support
the rise in the minimum wage as it is the right thing to do.

The lies and disingenuousness of the business community is legendary.

Just today in Oakland there is a Walgreens that petitioned the City to open a new
store, so they can suck more profit out of that location, and demand the city give
them a break on salaries, when other businesses struggling do not get such breaks.
The games and rip-offs we find out about from corporations are disgusting and really
put people in a mindset where nothing they say can be trusted. The CEO of Walgreens
makes $8000/hr and they cannot afford to pay a few employess $3 more an hour, when
everyone other business in Oakland has to?

Make work pay and give people hope and they will be stronger, healthier, more
productive workers and citizens. Keep listening to the ever more obvious BS from
corporate shills with simplistic models of the world and we will languish with
more human liabilities than we have human resources.

7 people like this
Posted by Johnny
a resident of Midtown
on Feb 11, 2015 at 7:20 am

So what happens to those of us who worked our way up to $15/hr? Shouldn't we make $20/hr now? Someone please answer this question.

It is not for City Council members to determine minimum wage in an attempt to mold Palo Alto into a sterile little utopia.

I am shocked that pernicious and intrusive government power is able to masquerade as altruism; ans so many people believe it.

It is not up to a group of supposedly Enlightened politicians to determine MARKET VALUE.

Have fun watching more Starbucks and Walgreens pop up all over Palo Alto, as these are the only types of companies that will survive this in the long run.

But at least now their hapless employees will be able to stop living off hot dogs and Ramen and stay complacent in their brain dead jobs. From my lofty perch, I am truly pleased and happy for them. TV dinners is definitely an upgrade over Ramen.

4 people like this
Posted by Allen Edwards
a resident of Old Palo Alto
on Feb 11, 2015 at 11:26 am

There was a paper on the effects of raising the minimum wage. The conclusion was that there was some good and some bad. The bad was that some people lost their jobs because their employer could not afford the wage increase. The good was that the buying power of the minimum wage workers increased and that meant more customers for many businesses. The impact on the people who did not lose their jobs was obviously positive, the impact on those who lost their jobs negative. The net impact on the economy as a whole was overwhelmingly positive as the money that goes to minimum wage workers gets spent and the increase in demand was positive. It also helps to get people off of public assistance, which is why this idea is being pushed by some thinking Republicans.

1 person likes this
Posted by chris
a resident of University South
on Feb 11, 2015 at 11:41 am

If an employer is paying the current minimum wage, they are probably exploiting their workers. If they have good workers, they should be able to train them up so they are worth $2/hour more.

3 people like this
Posted by Garden Gnome
a resident of Crescent Park
on Feb 11, 2015 at 11:51 am

We should raise the minimum wage even higher. Why not $50/hour or even $100/hour?

And yes, even at $10/hour we'll see some people lose their jobs and some businesses go, well, out of business. But that pales in comparison to the importance of making us feel good about ourselves.

3 people like this
Posted by Hermia
a resident of Triple El
on Feb 11, 2015 at 12:56 pm

It's never a poor choice to pay a living wage.

1 person likes this
Posted by PAmoderate
a resident of Old Palo Alto
on Feb 11, 2015 at 1:09 pm

PAmoderate is a registered user.

All those teenagers in at Gunn and Paly will be loving their summer job paychecks... the ones that will have jobs, of course.

2 people like this
Posted by R Wray
a resident of Palo Verde
on Feb 11, 2015 at 2:53 pm

The purpose of the government is to protect individual rights. Minimum wage laws violate individual rights. They should be abolished entirely.

6 people like this
Posted by Alex
a resident of Barron Park
on Feb 11, 2015 at 5:05 pm

I expected better of you, Palo Alto. "All those teenagers will be loving their summer paychecks!"? Clearly you haven't educated yourself on the issue, preferring to listen to Fox News-esque scare tactics. The majority of people working minimum-wage paying jobs ARE NOT teenagers; the average age, according to the Economic Policy Institute, is 35. Many are mothers, and many also earn at least half of their family's income. Just because you devalue their jobs because they don't require a BA or MA, doesn't mean they're not necessary. Y'all wouldn't be able to live your comfortable, snobby lives if it weren't for people in the service industry.

2 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 11, 2015 at 6:04 pm

I can see that the number of employees at your favorite local fast food place, or movie theater, or grocery store will become noticeable very quickly. Longer lines, not cleaning tables or between movies at theaters, and longer checkout lines with fewer baggers, will be the first thing we notice. The turnover of employees at these places is probably fairly high and they will just not replace them so nobody will actually lose their job, but we will notice lack of service.

7 people like this
Posted by Sea Seelam Reddy
a resident of College Terrace
on Feb 12, 2015 at 12:36 am

During November 2014 election, we talked about minimum wage.

I took the stand that government should not be dictating the businesses on minimum wage.

However, after further discretion and arguments with my family and friends, I conceded.

For Palo Alto residents, to live a life with the most minimum wages; it needs to be $17/hour.

It is what is required to afford rent and live on your own.

Let us propose this:

1. businesses voluntarily offer $17/hour in Palo Alto.
2. city hall approve a 'minimum wage' recommendation; not a law
3. take an assessment after a year to see if this needs to be a law

I still do not like government telling businesses what to pay their employees. It is between the company and prospect.


Like this comment
Posted by Rainer
a resident of Evergreen Park
on Feb 12, 2015 at 11:05 am

Rainer is a registered user.

You could have started the road to a higher minimum wage right on Monday, by adding, let's say, $3 to the federal minimum wage and go from there,but no
Study and delay - the Palo Alto Way.

There are plenty of examples how minimum wage worked out in Palo-Alto-like communities all over the country. My personal favorite is how Seattle has approached this.

So why don't you Goggle:

"what is a appropriate minimum wage and how to get there?"

and read the first 10 URLs.

If you have followed the national discussion, you will not be surprised to find results from the Washibgton State - Idaho border towns example.

5 people like this
Posted by R Wray
a resident of Palo Verde
on Feb 12, 2015 at 11:05 am

SS Reddy, What about teenagers starting out who want to gain some experience, learn some basic skills and work toward being independent? What about semi-retirees who what to supplement their income and maybe just get out into the world? These people can't (or don't want to) produce 17 $/hr. You are throwing them under the bus. Businesses can't hire them at a lost and stay in business long.

Above there is some stat that the average age of those on minimum wage is 35. From this we are supposed to infer that most of those getting minimum wage are 35. It is much more likely that about half are teenagers and half are semi-retired averaging to age 35.

The nature of government is not as you imply. It not a debating society. It doesn't make "recommendations". It makes laws. And it has guns.

For 300 years and around the world there have been "experiments" with economy systems. The results are in; free markets (capitalist) are best, especially for the poor. It was stated above that minimum wage controls grow the economy. If government controls are the answer, North Korea, Cuba and other such societies would be leading the world economy.

But the city is going to impose a minimum wage. The question is how high. How much sand is going to be thrown into the machinery of the free market?

The last sentence in your post is a good principle. Integrity is going by your principles.

2 people like this
Posted by curmudgeon
a resident of Downtown North
on Feb 12, 2015 at 12:45 pm

Spare us that tired old apocalyptic anti minimum wage rhetoric. The world has never come to an end when our lowest paid workers get paid more. In fact, enhancing their buying power has always been a boost for the general economy.

3 people like this
Posted by curmudgeon
a resident of Downtown North
on Feb 12, 2015 at 2:12 pm

"I can see that the number of employees at your favorite local fast food place, or movie theater, or grocery store will become noticeable very quickly. Longer lines, ..."

Nonsense. If management could do with fewer employees then, they wouldn't have them on the payroll now. That's how an efficient business is run. What you will see is a small price boost, which you can easily afford.

"The purpose of the government is to protect individual rights. Minimum wage laws violate individual rights. They should be abolished entirely."

Traffic laws violate individual rights. Should they be abolished entirely?

Like this comment
Posted by R Wray
a resident of Palo Verde
on Feb 13, 2015 at 11:33 am

For anyone who might be interested,

The concept of individual rights has some context. First, it is a principle--it applies to everyone. You can't claim to do anything you want if it violates other's rights. (This also means that you don't have a right to other people's stuff. That would violate their rights.)

Second, rights can be violated only by force. (In this context, fraud is considered an indirect use of force.) The initiation of force against someone is wrong. (Cases of selfdefense to not violate rights.)

Driving is a potentially violate act. If you drive recklessly you violate other's rights. You do not have that right. Many traffic laws do not violate your rights. (Some do.)

If I offer my neighbor a job to rake leaves at say 5 $/hr and he accepts without any coercion, no force is involved, and no rights have been violated. It should be none of the government's business, but if the government steps in and says you have to pay him 17 $/hr, that's the initiation of force. (Neglecting all the other regulations that prohibit me from even considering offering a job.) Government action is, by its nature, force or the threat of force.

Enjoy your individual right to pursue happiness.

4 people like this
Posted by R Wray
a resident of Palo Verde
on Feb 13, 2015 at 12:22 pm

Spare us the tired old economic error that enhancing the purchasing power of the minimum wage workers will boost the general economy.

The error is focusing only on selected groups and not on all groups.

Suppose there is a restaurant that is doing pretty good and the owner is thinking of adding to the dining room. Then the minimum wage is increased, and he pays the workers more. Sure, they have more money to add to the economy. What is forgotten, however, is that the contractor who was going expand the dining room has less money. The money spent by the minimum wage earners is taken from spending of someone else. There is no net change in spending in the economy. There is, however, a lost to the economy of a new dining room.

Also, the prices are expected to rise mostly in the type of places that the minimum wage earner spends his money.

1 person likes this
Posted by Jordan
a resident of University South
on Feb 13, 2015 at 12:34 pm

The downtown employees are going to need a minimum wage increase, if for no other reason than to cover the costs for their downtown parking permits. Instead of adopting yet another business-unfriendly policy, why not eliminate the proposed parking permit fee for downtown employees and ditch the minimum wage increase? Combined with ever increasing rents, an increased minimum wage would only encourage businesses to leave our city. Why on earth would we want to do that? And while we are at it, ditch the anti-development mindset that is holding us back, keeping rents stratospherically high, and making it ever harder for small businesses to exist in our town.

1 person likes this
Posted by Jordan
a resident of University South
on Feb 13, 2015 at 12:37 pm

@curmudgeon wrote: "Traffic laws violate individual rights. Should they be abolished entirely?"

Have you seen the way people drive in downtown lately? It often seems as if traffic laws never existed in the first place.

Like this comment
Posted by Downtown Employer
a resident of Downtown North
on Feb 17, 2015 at 12:41 pm

I'm in favor of this as long as there is a lower wage tier for high school students, as the argument that they need a wage on which they can support themselves doesn't really apply: what they need is to learn the skills to get them out of a minimum wage job!

2 people like this
Posted by curmudgeon
a resident of Downtown North
on Feb 17, 2015 at 1:49 pm

"what they need is to learn the skills to get them out of a minimum wage job!"

Can you please explain how working a sub-minimum wage job teaches the skills to get out of a minimum wage job?

2 people like this
Posted by Not Dead Yet
a resident of Mountain View
on Mar 5, 2015 at 9:17 pm

@Rogue Trader The bookstore in SF actually remained open. They just changed their business model to a "sponsorship" model and have been overwhelmed with the response.

Web Link

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