News

Mixed reactions accompany South Bay minimum wage increases

Palo Alto will increase minimum wage by 25 cents

Taverna sous chef Jose Alarcon sautés vegetables in the Palo Alto restaurant's kitchen on March 17. Photo by Magali Gauthier.

In 2017, Kirk Vartan turned his award-winning A Slice of New York pizza into a co-op, cutting his workers into equal partnership.

Part of the deal includes being paid at least $21 an hour to start, attributed in part to the San Jose business's unique structure. The pay rate is much higher than city's minimum wage of $15.25 an hour, and closer to Vartan's goal of a living wage for his workers.

So it might not matter in the short term that San Jose, where one of Vartan's two restaurants is located, raised its minimum wage Jan. 1. But to Vartan, the bare minimum isn't enough.

The minimum wage goes to $15.45 an hour from $15.25 an hour. San Jose is one of several cities in the region to implement a minimum wage hike.

Cupertino will increase its minimum wage to $15.65 per hour from $15.35 per hour. Los Altos, Palo Alto and Santa Clara will increase their minimums to $15.65 from $15.40 per hour. Mountain View and Sunnyvale — both tied for the highest minimum wages in the region — will increase to $16.30 from $16.05 per hour.

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That leaves the most populous city in the region — once a national leader in raising wages — almost $1 per hour behind the highest minimum wages in the South Bay, and far short of the living wage of $20 an hour for a single person with no children for Santa Clara County as calculated by the Massachusetts Institute of Technology.

Scott Myers-Lipton, a sociology professor at San Jose State University, agrees.

"San Jose, which was a leader in the minimum wage debate, now is at the bottom of the heap," said Myers-Lipton, who in 2012 led a group of students to campaign successfully for a $2 minimum wage increase in San Jose. "We're in last place."

A 2016 study, conducted by economists at the University of California, Berkeley, found raising the minimum wage to a then-high of $15 in San Jose would result in a wage increase for 31.1 percent of the city's workforce and an annual pay increase of 17.8 percent for those getting raises.

It would disproportionately benefit Latino workers who are more likely to hold low-wage jobs and would show "improved health outcomes for both workers and their children," the study said.

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The study also found businesses could absorb most of the payroll increases by raising prices an average of 0.3 percent, which was below the annual inflation of 2.5 percent from 2014 to 2019. Restaurants would have to increase their prices by an average of 3.1 percent.

The issue of price increases is where Myers-Lipton and Vartan disagree.

While Myers-Lipton sees a guaranteed increase in both wages and happiness across the board for workers and business owners, Vartan sees misguided policy.

"I saw senior elected officials speak about how minimal an increase to wages would be to a business, cities with ivory-tower analysis or theory," Vartan said. "But how does that theory hold up in a business where labor makes up 45 percent of your expenses? Saying there is a minor impact to profits is a joke."

That increase for restaurant operators, Vartan said, is just simple math.

"I am all for raising wages," Vartan said. "My problem is being told how to do it. The reality is, customers pay for everything. If expenses go up, so do prices."

Myers-Lipton said, however, that is what is expected. A 2 percent to 3 percent increase was something both Myers-Lipton and the UC Berkeley study predicted.

"The numbers are clear about the positive impact of the minimum wage (increase)," Myers-Lipton said.

The pandemic has crippled much of the service industry, which employs a disproportionate number of low-wage and minimum-wage workers, many of whom are Black and Latino.

Some business owners say lost revenue due to the pandemic is an even greater reason they should fear a wage increase.

According to a new Public Policy Industry Report, the unemployment rate for workers earning less than $30,000 from August to October was just over 25 percent and has likely "stripped away" many wage gains made by the lowest income earners.

All the more reason, Myers-Lipton said, that communities should be increasing minimum wage.

"Why in San Jose are we at the bottom of the heap — almost $1 behind Mountain View and Sunnyvale?" he said. "A dollar an hour increase would be incredibly helpful."

He said the warnings against wage increases from business advocacy groups have proven false. And with a pandemic to deal with, that false information might be even more devastating for businesses than wage increases.

Eddie Truong, the director of government and community relations for the Silicon Valley Organization, said the city should hold off on an increase because of the pandemic.

"Restaurants are particularly affected because the inability to have dining indoors or outdoors and to have minimum wage increases on top of that. Plus, restaurants, in general, are a thin-profit industry," he said.

Also Jan. 1, the statewide minimum wage bumps up to $13 per hour for businesses with 25 employees or fewer and $14 for all other businesses. In 2022, those amounts will increase by $1, respectively. Businesses with 25 employees or fewer have an extra year to comply with the state's goal of reaching $15 an hour by 2023.

This story, from Bay City News Service, was originally published on San Jose Spotlight here.

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Mixed reactions accompany South Bay minimum wage increases

Palo Alto will increase minimum wage by 25 cents

by /

Uploaded: Sun, Jan 3, 2021, 9:47 am

In 2017, Kirk Vartan turned his award-winning A Slice of New York pizza into a co-op, cutting his workers into equal partnership.

Part of the deal includes being paid at least $21 an hour to start, attributed in part to the San Jose business's unique structure. The pay rate is much higher than city's minimum wage of $15.25 an hour, and closer to Vartan's goal of a living wage for his workers.

So it might not matter in the short term that San Jose, where one of Vartan's two restaurants is located, raised its minimum wage Jan. 1. But to Vartan, the bare minimum isn't enough.

The minimum wage goes to $15.45 an hour from $15.25 an hour. San Jose is one of several cities in the region to implement a minimum wage hike.

Cupertino will increase its minimum wage to $15.65 per hour from $15.35 per hour. Los Altos, Palo Alto and Santa Clara will increase their minimums to $15.65 from $15.40 per hour. Mountain View and Sunnyvale — both tied for the highest minimum wages in the region — will increase to $16.30 from $16.05 per hour.

That leaves the most populous city in the region — once a national leader in raising wages — almost $1 per hour behind the highest minimum wages in the South Bay, and far short of the living wage of $20 an hour for a single person with no children for Santa Clara County as calculated by the Massachusetts Institute of Technology.

Scott Myers-Lipton, a sociology professor at San Jose State University, agrees.

"San Jose, which was a leader in the minimum wage debate, now is at the bottom of the heap," said Myers-Lipton, who in 2012 led a group of students to campaign successfully for a $2 minimum wage increase in San Jose. "We're in last place."

A 2016 study, conducted by economists at the University of California, Berkeley, found raising the minimum wage to a then-high of $15 in San Jose would result in a wage increase for 31.1 percent of the city's workforce and an annual pay increase of 17.8 percent for those getting raises.

It would disproportionately benefit Latino workers who are more likely to hold low-wage jobs and would show "improved health outcomes for both workers and their children," the study said.

The study also found businesses could absorb most of the payroll increases by raising prices an average of 0.3 percent, which was below the annual inflation of 2.5 percent from 2014 to 2019. Restaurants would have to increase their prices by an average of 3.1 percent.

The issue of price increases is where Myers-Lipton and Vartan disagree.

While Myers-Lipton sees a guaranteed increase in both wages and happiness across the board for workers and business owners, Vartan sees misguided policy.

"I saw senior elected officials speak about how minimal an increase to wages would be to a business, cities with ivory-tower analysis or theory," Vartan said. "But how does that theory hold up in a business where labor makes up 45 percent of your expenses? Saying there is a minor impact to profits is a joke."

That increase for restaurant operators, Vartan said, is just simple math.

"I am all for raising wages," Vartan said. "My problem is being told how to do it. The reality is, customers pay for everything. If expenses go up, so do prices."

Myers-Lipton said, however, that is what is expected. A 2 percent to 3 percent increase was something both Myers-Lipton and the UC Berkeley study predicted.

"The numbers are clear about the positive impact of the minimum wage (increase)," Myers-Lipton said.

The pandemic has crippled much of the service industry, which employs a disproportionate number of low-wage and minimum-wage workers, many of whom are Black and Latino.

Some business owners say lost revenue due to the pandemic is an even greater reason they should fear a wage increase.

According to a new Public Policy Industry Report, the unemployment rate for workers earning less than $30,000 from August to October was just over 25 percent and has likely "stripped away" many wage gains made by the lowest income earners.

All the more reason, Myers-Lipton said, that communities should be increasing minimum wage.

"Why in San Jose are we at the bottom of the heap — almost $1 behind Mountain View and Sunnyvale?" he said. "A dollar an hour increase would be incredibly helpful."

He said the warnings against wage increases from business advocacy groups have proven false. And with a pandemic to deal with, that false information might be even more devastating for businesses than wage increases.

Eddie Truong, the director of government and community relations for the Silicon Valley Organization, said the city should hold off on an increase because of the pandemic.

"Restaurants are particularly affected because the inability to have dining indoors or outdoors and to have minimum wage increases on top of that. Plus, restaurants, in general, are a thin-profit industry," he said.

Also Jan. 1, the statewide minimum wage bumps up to $13 per hour for businesses with 25 employees or fewer and $14 for all other businesses. In 2022, those amounts will increase by $1, respectively. Businesses with 25 employees or fewer have an extra year to comply with the state's goal of reaching $15 an hour by 2023.

This story, from Bay City News Service, was originally published on San Jose Spotlight here.

Comments

Squidsie
Registered user
another community
on Jan 3, 2021 at 10:59 am
Squidsie, another community
Registered user
on Jan 3, 2021 at 10:59 am

Wonderful. A race to increase the minimum wage, and avoid the "shame" of neighboring cities offering more. Things are going to get even more expensive in the South Bay,until only the guilt-ridden rich can afford to live there.


Name hidden
Downtown North

Registered user
on Jan 3, 2021 at 1:07 pm
Name hidden, Downtown North

Registered user
on Jan 3, 2021 at 1:07 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Jeremy Erman
Registered user
Midtown
on Jan 3, 2021 at 6:54 pm
Jeremy Erman, Midtown
Registered user
on Jan 3, 2021 at 6:54 pm

The consequences of raising the minimum wage are generally more complicated than either side tends to admit. For example, businesses which sell products whose prices are set by the manufacturer, such as books, sheet music, DVDs and CDs, cannot easily raise prices to compensate for higher wages. This is one reason why bookstores such as Kepler's in Menlo Park and Borderlands Books in San Francisco have created membership programs.

Also, as the article does mention, different businesses and industries have different labor expenses and profit margins, so higher wages impact these businesses differently. Unfortunately, both sides in the minimum wage debate tend to ignore this complexity and assert that their preferred outcome is true for all businesses in all situations, and that any negative effects are inconsequential.


Jennifer
Registered user
another community
on Jan 4, 2021 at 8:54 am
Jennifer, another community
Registered user
on Jan 4, 2021 at 8:54 am

It's good money for a teenager. I'll never understand why adults work minimum wage jobs. Give fast food, etc. jobs back to the kids.


Lee Forrest
Registered user
Crescent Park
on Jan 4, 2021 at 10:36 am
Lee Forrest, Crescent Park
Registered user
on Jan 4, 2021 at 10:36 am

>"I'll never understand why adults work minimum wage jobs. Give fast food, etc. jobs back to the kids."

^ Some adults are forced to work at minimum wage jobs out of economic necessities.

Besides, many kids from the more affluent communities wouldn't even consider such options.

I've known of kids receiving $100.00+/weekly allowances...'just to make ends meet'.


Jennifer
Registered user
another community
on Jan 4, 2021 at 10:50 am
Jennifer, another community
Registered user
on Jan 4, 2021 at 10:50 am

No one forces adults to take a minimum wage job. They choose to. Unskilled laborers (sometimes without a high school diploma) make good money in unions. The only employees that might be "forced" to take a minimum wage job would be a teenager without any work experience.

As an adult, you have to acquire the necessary skills to get a job that pays enough to make ends meet. Minimum wage was never meant to be a living wage.


Lee Forrest
Registered user
Crescent Park
on Jan 4, 2021 at 11:00 am
Lee Forrest, Crescent Park
Registered user
on Jan 4, 2021 at 11:00 am

>"As an adult, you have to acquire the necessary skills to get a job that pays enough to make ends meet. Minimum wage was never meant to be a living wage."

^ Easier said than done in certain instances...economic & educational opportunities can vary.

Exploitive employers with a keen eye for 'the bottom line' in terms of overhead costs + systemic racism can also play a significant role in wealth disparities.

As far as acquiring the necessary skills...sometimes one is simply born with them. I would have liked/preferred to have been an MLB player but lacked the inherent skills no matter how much I practiced.


Jennifer
Registered user
another community
on Jan 4, 2021 at 7:22 pm
Jennifer, another community
Registered user
on Jan 4, 2021 at 7:22 pm

Most kids aren't from "affluent communities." Jobs are taken away from high school and college aged kids. As far as getting through life financially, you have to have something lined up. College, trade school, military, etc. That's how you acquire the necessary skills for a good job.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Jan 5, 2021 at 11:20 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Jan 5, 2021 at 11:20 am

The title of this article says South Bay. The South Bay includes both Urban and suburban cities. The teenagers in the cities noted are not working at a fast food business because there are not that many in these cities. The fast food businesses are located in the Urban locations - San Jose and the periphery locations around the airport which has the hotel business for travelers.

My son worked at the golf course because all of the kids were on golf teams. It was more social than monetary. Also tennis camps and the ice skating lodge. The reason for being there is more social and personality oriented. Also kids in theatre work some jobs because they like theatre. A lot of these articles need to be qualified as urban VS suburban since they operate on different age brackets and different population mixes. A lot of kids work in the family business. More family businesses in the urban locations.


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