San Mateo has become the first city in the county to enact a higher-than-the state minimum wage that will kick in starting January.
After more than a year of considering various means to help low-income workers afford the region’s high cost of living, Monday night the City Council unanimously adopted the local ordinance that will raise wages to at least $15 by 2019.
Officials had considered various renditions of the ordinance, including making exemptions for small businesses, but ultimately decided to increase wages across the board while providing a one-year deferral period for nonprofits.
“I cannot be torn away from the people’s need to be able to earn in our very high cost of living area. There’s almost no higher cost of living area in this country, so I think it’s incumbent on us to do something,” said Councilman Rick Bonilla, who noted other cities are also looking at possibly raising wages.
A coalition of restaurant owners spoke against the ordinance, contending they would be negatively impacted and even potentially go out of business when factoring additional workers compensation costs and payroll taxes. At a minimum, they requested it not go into effect until July 2017. Councilwoman Maureen Freschet agreed, but was the only one to vote against the ordinance.
“I continue to be deeply concerned on the impacts this will have on our downtown commerce and restaurants in particular,” Freschet said. “I’m reluctant to put our restaurateurs at a competitive disadvantage when many are already struggling.”
But her colleagues noted the raise has been in motion more than a year and compromises with all parties have been made along the way — particularly as officials originally considered hitting $15 by 2018. The council had also pondered allowing small businesses with 55 or fewer employees a year deferral period, but many restaurateurs instead sought for all businesses to be treated equally while hoping to delay the increase until mid 2019 or later.
Now, minimum wages will increase to $12 beginning Jan. 1, 2017, hit $13.50 Jan. 1, 2018, then reach $15 in 2019 before being adjusted by annual consumer price index beginning in 2020 and each year after.
Gov. Jerry Brown recently approved a law that will raise the current $10 statewide minimum wage to $15 by 2022 with the first increase to $10.50 beginning in 2017.
The group of downtown restaurant owners noted employees across the board would be looking for increases and when factoring in additional payroll costs, many will be left needing to raise thousands of dollars more a year to keep their business afloat.
“This is something for our community and you need to be able to look at everybody and know that we did give a little bit to make sure everyone survives. This is not only employees, but business owners as well,” said Alicia Petrakis, owner of Three Restaurant. “Please don’t take away the 150 odd restaurants that probably employ [thousands] of employees in downtown San Mateo. They’re not all going to go, but I can tell you a good portion will.”
Brad Goldberg, a managing partner of the restaurant Vault 164, said his business would likely have to do $225,000 more a year in sales to stay level and questioned whether the council truly considered whether businesses could afford it.
“It’s just too quick and to be frank, irresponsible,” Goldberg said. “It’s so hard to stay afloat in San Mateo, which is no where near the destination you used to think it is. It’s not San Francisco, it’s not Palo Alto.”
But labor representatives and faith leaders urged the council to proceed, noting six months would also make a big difference for those struggling to get by.
“By the time it’s implemented in January, it will be nearly two years since it first came up. Employers and employees alike have known it’s on the horizon and been given ample time to prepare and plan accordingly,” said Julie Lind Rupp, executive secretary-treasurer of the San Mateo Labor Council, who noted 28 percent of San Mateo households earn less than $50,000 a year. “For the minimum wage worker who may not even own a car, let alone even think about owning a business, it’s a long time. … [It’s] the difference between barely scraping by and the ability to plan.”
Raise the wage advocates expect the council’s actions to a trickle-down effect, and Bonilla noted two cities starting with a “B” are also contemplating minimum wage increases.
“We’re confident as well that other cities in this community, this county, will be looking to this council, looking to your leadership,” said William White, policy director with United Way Bay Area. “As prices continue to rise, the cost of living continues to rise in our region, we just can’t simply allow working families to wait.”
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