Foster City plans to raise its minimum wage to provide further financial help to low-income workers amid high cost of living, with the council directing staff to bring back an ordinance for approval.
Richa Awasthi
The ordinance will call for an increase to $15.75 an hour in 2022 following ordinance passage and $16.50 starting in 2023, with further increases based on the regional Consumer Price Index, with a cap at 3%.
The Consumer Price Index measures the average change in the prices paid by people for market goods and services. Cities use the CPI because it is predictable for employers and workers, and it keeps pace with the rising cost of living.
The city has discussed various minimum wage increases over the past year. The council in November directed staff to work on options for increasing the minimum wage to $15.50 an hour, beginning in 2022 and $16 an hour in 2023 but lacked the votes to ensure its passage due to opposition from Vice Mayor Jon Froomin.
Cities can set higher minimum wage requirements than state and federal standards. Ten other cities in the Peninsula have higher minimum wages than the state and use CPI to calculate additional raises. Cities like Burlingame, Half Moon Bay, Redwood City, San Carlos, San Mateo and South San Francisco are among them. Councilmember Patrick Sullivan, who brought the item forward, favored a $16.50 minimum wage and future increases based on the CPI.
“I want to be at the forefront for Foster City, [especially] when I see that San Mateo, Belmont and Redwood City are starting at $16.20,” Sullivan said.
Mayor Richa Awasthi and Councilmember Sam Hindi favored different but similar enough proposals that the council compromised on $15.75 in 2022 and $16.50 in 2023.
Both Awasthi and Hindi asked the city to gather feedback from businesses about the proposed wage increases, as the proposal was higher than a previous proposal in November. Awasthi favored using the CPI formula to line up with other cities in the area. The council also directed having a CPI cap of 3% on increases to provide stability for businesses against large increases. Staff recommended using a CPI formula to make it easier to calculate minimum wage. Previous outreach research showed businesses were supportive of a minimum wage ordinance as long as the city aligned with other cities in San Mateo County and had phased implementation to acclimate.
“The approach Foster City comes up with must be consistent with other cities because employers are used to it, and the impact over time has been seen and evaluated, and the workers have seen that,” Awasthi said.
California’s minimum wage in 2022 is $15 an hour for companies with 26 employees or more and $14 for businesses with 25 or fewer employees. The minimum wage will rise to $15 for all businesses in 2023.
Froomin proposed a minimum wage increase significantly above other recommendations and suggested tying it to area median income or a housing measurement. He favored $18.71 an hour based on employment data and housing costs in the county but noted he did have enough council support. Froomin referenced a proposed state ballot initiative that would increase the state minimum wage to $18 an hour over several years. Rather than wait for it to occur, Froomin recommended being proactive and setting a standard based on CPI, area median income or housing measurements. Given the lack of support, he suggested a compromise of $16 in 2022 and $17 in 2022. However, the council did not take up the proposal.
The motion passed 3-0-1, with Froomin abstaining because he said the proposed ordinance did not do enough. Councilmember Sanjay Gehani recused himself because he owns a business in Foster City.
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Dirk van Ulden said:
Rick Bonilla said:
Hey Terry, I thought your favorite smaller government. What’s up with this? You are starting to sound like a Democrat.
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Dirk van Ulden said:
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