Redwood City has one of the highest minimum wage rates in the county at $16.20 per hour after opting to incrementally raise the rate every year since 2018 but the Bay Area’s cost of living demands greater pay and councilmembers shared support for increasing its rate again.
After conducting limited outreach mostly with those in the business community, staff found that businesses are paying employees an entry rate of $19 an hour, about $1.50 more than the 2023 minimum wage rate would be if the city kept up with the Consumer Price Index.
Still, Assistant City Manager Alex Khojikian said the main message from merchants was that they’re desperate for a workforce and open to a minimum wage increase if it will help bring in staff.
“In the minimum outreach we did they were saying send me employees,” Khojikian said. “They just said bring me a workforce.”
The city contracts with San Jose’s Office of Equity Assurances to enforce its minimum wage and the office anticipated the CPI will increase by 7% to 8% next year, increasing the city’s minimum wage to $17.50.
Half of the jurisdictions in San Mateo and Santa Clara counties that have implemented a minimum wage have also implemented a minimum wage cap between 3% and 5% to save businesses from an unusually high spike.
While the cap aids businesses in weathering pay increases, opting against a cap ensures employees are paid wages that keep up with the growing cost of living. To cater to both groups, some jurisdictions have implemented a catch-up provision that would lead the city’s minimum wage to eventually realign with the CPI, staff said.
Though councilmembers shared concern for the city’s lowest income earners, they were also hesitant to place too much pressure on small businesses also hard hit by inflation after more than two years of pandemic-induced instability.
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Ultimately, they shared support for adjusting the city’s minimum wage policy to include a 3.5% increase cap, a catch-up provision policy and to round up the new rate to the nearest 5 cents. Staff will return at a later date with a formal ordinance to be adopted.
“My automatic preference would be to not to have a cap but I also have a concern that if we were to have a 7 or 8% increase ... employees would lose their jobs,” Vice Mayor Diana Reddy said. “I think there may be some unintended consequences if we did not have the cap.”
In other business, the council adopted a staff proposal to increase the hourly parking rate at the Jefferson Parking Garage and areas just outside the city’s downtown. Beginning October, drivers will pay $1 during non-peak hours to park at the Jefferson Garage, matching the rate at the Marshall Garage, and street parking just outside Courthouse Square will rise from 25 cents per hour to 50 cents.
The council also approved the “Action, Create and Engage” program aimed at thoughtfully responding to community concerns about disruption from youth downtown. The program, developed in partnership with Redwood City Police Activities League, was created in response to about 200 children on bikes flooding downtown in early May and who began engaging in unsafe behavior.
Through the pilot program, officials hope to foster a stronger relationship between youth and community leaders by hosting after-school programming, bike events, entertainment and other opportunities for mentorship.
“We want to ensure a safe and fun environment for all in our downtown while also supporting healthy and positive activities for our youth,” City Manager Melissa Stevenson Diaz said in a press release. “The ACE Program will support youth development and empowerment while also ensuring accountability for unsafe behavior. We are eager to get started.”
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