News

Palo Alto approves plan for $15 minimum wage

City joins other county cities in adopting timetable

Palo Alto hopped on a regional bandwagon Monday night when city officials agreed to raise the local minimum wage to $15 an hour by 2019.

By a unanimous vote, the City Council joined a movement led by the Cities Association of Santa Clara County and Santa Clara County mayors to gradually raise the city's minimum wage to $15 by 2019, up from the current level of $11.

In June, a coalition of mayors co-signed a letter calling for a "common path" on the issue, and endorsing the idea of getting to "15 by 19" in three steps, starting in January 2017. Under this approach, the minimum wage would climb to $12 in 2017 and $13.50 in 2018 before going to $15 on Jan. 1, 2019.

San Jose Mayor Sam Liccardo, one of the signatories, wrote that by taking a "regional approach, we will ensure that all of our residents, businesses and cities are helping address the widening gap between rich and poor here in Silicon Valley."

Palo Alto Vice Mayor Greg Scharff, who also co-signed the letter, said the regional solution would "promote economic growth and equity, as well as begin the process of addressing income inequality and the high cost of living in Silicon Valley."

Scharff, who sits on the council's Policy and Services Committee, led the committee in endorsing the Cities Association approach in August. On Monday night, as the full council considered the recommendation, he was one of several members who made the case for the common path.

For Palo Alto, however, the common path is actually longer than the one city had previously been on. In April 2015, when the City Council agreed to raise the local minimum wage from $9 to $11, it also endorsed a "15 by 18" ($15 by 2018) plan.

Councilmen Marc Berman and Cory Wolbach on Monday proposed staying on the faster path, which is also being pursued by Mountain View and Sunnyvale.

Wolbach suggested getting to $15 by July 1, 2018, which would give local businesses an extra six months to adjust relative to the other cities (in Mountain View and Sunnyvale, the new fee would kick in on Jan. 1). Berman also made a case for sticking with the original goal.

"Now that there's another option, we seem to be wanting to gravitate to that," Berman said. "And finding comfort in the floor -- finding comfort in the slowest option -- I'm not sure why that would be our approach."

The other seven council members favored following the regional blueprint, which is catching on both inside the county (Los Altos is expected to formally approve a "15 by 19" plan this week) and outside (San Mateo has also approved "15 by 19").

Scharff and Councilwoman Liz Kniss both spoke in favor of joining other cities on the issue, with Kniss saying she would be "troubled" if the city were to depart too much from what others are doing.

Councilman Tom DuBois made the motion for moving ahead with the Cities Association schedule.

"I see a lot of value in us being aligned with most of the cities around the Peninsula," he said.

After Wolbach's proposal to stick with "$15 by 2018" died by a 2-7 vote, the council voted unanimously to approve the slower path. Council members also agreed not to carve out any exemptions for tipped workers, despite pleas from local restaurant owners.

Much like at prior meetings, local restaurateurs argued that without such an exemption, cooks, dishwashers and other "back of house" staff would lose out on higher wages because employers would have to devote more resources to pay waiting staff, most of whom already get more than $20 per hour because of tips.

Galen Fletcher, owner of Sundance The Steakhouse, said that with two-thirds of his staff making tips, the new minimum wage "prevents me from giving increases to those who need it the most -- my back-of-the-house employees."

He also said the increase is not "economically sustainable" and estimated that every extra dollar in raised wages costs his business $8,000 per month, or $96,000 per year. It will also, he predicted, lead to increased prices and, for some customers, decreased frequency of visits.

Michael Martin, a partner in Fleming's Steakhouse, joined others in asking for an incremental exception for tipped workers. Otherwise, the new wage will not help those who need help the most, he and others argued.

"There is not a single non-tipped employee in all the restaurants here that currently make less than $15 an hour," Martin said. "I'd venture to say many make more than $20 an hour."

On the other side of the debate were supporters of the higher wage. Elly Matsumura, representing Silicon Valley Rising (a campaign focused on occupational segregation and income inequality), was one of several speakers to urge the council to move ahead with raising the wage.

We've all heard stories, she said, of minimum-wage employees such as fast-food workers "stacked up" with eight people in a two-bedroom home. Some restaurant workers are themselves skipping meals to save money, she said.

"We really start talking about how we can rebuild and shore up the middle class on the basis principle that people who work hard and play by the rules deserve a fair wage," Matsumura said.

The council needed no further convincing on the subject of a higher wage, though there was some debate on whether tipped workers should be exempt. Because California law prohibits the pooling of tips, Palo Alto officials concluded that they would be on shaky legal grounds if they were to create such an exemption and opted not to move ahead with it.

After some debate about whether the city should lobby state officials in Sacramento to created exemptions for tipped workers, the council agreed to consider the issue at the end of the year, when it considers all of its lobbying positions.

Related content:

Palo Alto explores two paths toward higher minimum wage

Palo Alto raises minimum wage

Palo Alto looks to raise minimum wage to $15 by 2018

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Comments

13 people like this
Posted by Hopenchange
a resident of Professorville
on Sep 27, 2016 at 7:31 am


Why not let the market decide?

Doesn't the city council have more pressing issues to deal with?


4 people like this
Posted by regional plan
a resident of College Terrace
on Sep 27, 2016 at 10:06 am

It makes a great deal of sense to increase wages in sync with surrounding cities like MV and Sunnyvale. Otherwise Palo Alto would likely lose low-wage workers to these other cities.


7 people like this
Posted by Carol Gilbert
a resident of University South
on Sep 27, 2016 at 11:02 am

It is a ridiculous discussion. Restaurants are having a tough time hiring anyone for less than $15 right now. Also, somehow the state of California passed a most unfair law that does not permit the pooling of tips, i.e., when you tip on your bill, only the waiter gets the tip. It is not pooled to be shared with the back of the house. Now could the waiters do their job without back of the house support?!

Basically, if I could have my way, all employers would provide appropriate salaries and benefits and do away with the tipping protocol. Please note that downtown Palo Alto restaurants are adding to your bill an "Employer Mandated" amount of money to cover the costs they now pay for health insurance for which they should be paying. I have wondered what would happen if you deducted that from your bill. If anyone knows, respond here.


2 people like this
Posted by john_alderman
a resident of Crescent Park
on Sep 27, 2016 at 11:15 am

john_alderman is a registered user.

@regional plan - Though, as minimum wage jobs are eliminated in neighboring communities, there would be nowhere for Palo Alto low wage workers to go. It would be smart for a city like East Palo Alto or Redwood City to keep their minimum wage lower, and invite businesses to move jobs to those communities. Put food prep, warehousing, phone center in EPA and just hire a skeleton staff in PA/MV to sell/serve.


3 people like this
Posted by TV waatcher
a resident of Midtown
on Sep 27, 2016 at 12:09 pm

Thank you Gennady for your story.
I was really interested in this subject and tuned in to Channel 26. When Wolbach gave his long, long, rambling speech, I was looking for the usual trick in his speeches.
But I gave up after about 15 minutes and turned off the tv.

Can't help wondering whether all that long winded verbiage is intended to discourage understanding. He certainly fooled me during the last election.


36 people like this
Posted by Jason
a resident of Palo Alto Hills
on Sep 28, 2016 at 7:25 am

This is unfortunate. People who do not earn enough to live here will now be able to stick around a bit longer at mostly our expense. Why can't Palo Alto be a place just for hard-working smart folks? We keep fighting the inevitable. My neighbors and I would not mind having to drive a few more minutes for haircuts and restaurants.

-Jason


Like this comment
Posted by K. Liu
a resident of Old Palo Alto
on Sep 28, 2016 at 7:54 am

@jason: thank you for speaking our minds. it is hard to see our town get used like this.


Sorry, but further commenting on this topic has been closed.

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