The new year will bring a bigger paycheck for those earning minimum wage in Silicon Valley.
Palo Alto has hiked its minimum wage to $16.45, while Santa Clara, Los Altos and Cupertino have raised the pay floor to $16.40. The cities had a minimum wage of $15.65 in 2020.
San Jose workers will see their hourly rate go from $15.45 to $16.20, while those in Mountain View and Sunnyvale will see theirs bump to $17.10 from $16.30 — the highest minimum wage in the region.
Seven other cities in the county — Campbell, Morgan Hill, Gilroy, Monte Sereno, Los Altos Hills, Saratoga and Los Gatos — are lockstep with the state's wage hike, which bumps the $14 hourly rate to $15 at businesses with 25 or more employees.
Even the highest minimum wages in Santa Clara County are still way off from the living wage for the region, which is approximately $27.29 for one adult with no children, according to the Living Wage Calculator designed at the Massachusetts Institute of Technology.
"That's crazy," Jed Campbell, a barber who works at Hammer & Nails in Willow Glen, told San Jose Spotlight. He doesn't rely on a minimum wage job, but his brother does. "Even In-and-Out starts at $18 an hour. I don't know how people can afford to live with that."
The wage hikes come as the region sees a lopsided economic recovery. Giant tech companies are booming and well-positioned to weather the pandemic, while consumer-facing businesses that mainly rely on minimum wage workers, such as retailers, restaurants and hotels, continue to struggle, reports found.
"There is a concern that (the wage increases) could have a chilling effect on businesses that are already in uneven recovery," Derrick Seaver, head of the San Jose Chamber of Commerce, told San Jose Spotlight. "And a lot of times, wage increases or increases in business costs overall are simply passed on to consumers, and that tends to impact folks that are on the lower end of the income scale."
The increased rates might help local businesses hire and retain more people, but they could also drive owners and employers to cut positions to accommodate the new expenses, Seaver added.
Faye Garcia is working two minimum-wage jobs — at Willow Glen Sweet Shoppe and Vitality Bowls — to support herself through college. She is living with her mom, who also relies on three minimum-wage jobs to make ends meet. For them, any little increase helps.
"It's been challenging, especially during the pandemic," Garcia said, adding that sometimes she was told to stay home because of possible COVID-19 exposure and would miss a shift. "Personally, the increase would be very helpful. Everything is super expensive here."
Several doors down from Garcia's gift shop, Wila Tipcharoen at Tarah Thai Kitchen doesn't share the same enthusiasm about the new wage hike. Tipcharoen, also earning minimum wage at the restaurant, worries that the increase in the minimum wage will only drive up prices.
"So even if I get more income, it's not like I will have a bigger savings," she said. "I'd have to spend more on things that are already so expensive."
She was shocked to learn that workers in neighboring cities, especially in Mountain View and Sunnyvale, have been earning more than those who work in San Jose.
"Those cities aren't even that busy," she said, juggling between to-go orders and customers in the restaurant during the lunch rush. "So there's less work there, but people get paid more."
This story, from Bay City News Service, was originally published by San Jose Spotlight.