Comparing Bay Area Minimum Wage Increases

Berkeley and Richmond recently upped their minimum wages, and Oakland and San Francisco are also considering significant lifts for their lowest-wage workers. But each city’s minimum wage plan differs in significant ways. These differences reflect the balances of power between workers and employers, unions and business leagues, in each city.

In Oakland, labor and community organizations banded together as a coalition last year and decided to place an initiative directly on the ballot in time for the elections this November. That decision to circumvent the city council prevented what happened in Richmond and Berkeley. In Oakland’s neighbors to the north initial calls by grassroots activists for a $15 minimum wage were translated into a much smaller increase. Final legislation in these two cities was further watered down. Business lobbyists successfully argued that an immediate and significant hike in the minimum wage for all workers would cause unemployment, business closures, and a drain economic activity from these cities.

Berkeley’s minimum wage therefore isn’t very large, and it isn’t indexed to inflation, so it loses value quickly.

Richmond’s minimum wage, while larger on paper, may not impact very many workers in the city because of complicated exemptions that allow lots of employers to simply not pay the new municipal minimum wage, or to pay a lower “intermediate” amount.

In San Francisco the process has been legislative, like Richmond and Berkeley. But instead of starting from $15 and cutting downward, San Francisco’s board of supervisors appear headed toward $15 by 2018. If they pass the minimum wage legislation that was considered at today’s rules committee, San Francisco’s minimum wage will rise from it’s current $10.75 to $12.25 next year.

That would match the proposed increase that Oakland voters will consider in November. But then San Francisco’s minimum wage would jump another 75 cents in 2016, and then a dollar in 2017 and another dollar in 2018. Those increases significantly outpace the rate of inflation.

Here’s what the different enacted and proposed minimum wage increases in the Bay Area look like compared to one another.

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In Oakland the “Lift Up Oakland” ballot initiative would raise the minimum wage for all employees in March 2015 to $12.25 and then increase this wage each year to prevent it from losing value from inflation. The Oakland Chamber of Commerce is attempting to place a competing measure on the ballot that would phase in a minimum wage increase, but the increases charted below for this proposal would not benefit all workers as the Chamber’s proposal carves out certain categories of employers and employees.

 

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San Francisco’s proposed minimum wage would rise to $15 in 2018, possibly bringing pay just above the bare minimum considered a living wage.

 

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Differences between Berkeley and Richmond’s recently passed minimum wage laws, and San Francisco and Oakland’s proposed minimum wages are larger than this graph would imply. In Richmond the number of workers excluded from the new minimum wage of $13 by 2018 is probably very large due to exemption of “small businesses” from having to comply, and a complicated provision that establishes an “intermediate” minimum wage halfway between the city and state minimum wages, allowing employers who obtain half their income from sales or services provided outside the city to pay this lesser wage.

 

 

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3 comments
  1. themodernidiot said:

    Phx: min wage $7.90. Average 1bdrm rent: $700.

  2. tdlove said:

    Thanks for doing this! Very clear and given the complicated subject, concise. :)

  3. An interesting read as finally, Germany is going to introduce minimal wages, too, and the discussions do not come to an end. We will see if and which businesses will have to close down, and how it will influence unemployment. On the other hand, if even people who live alone cannot really survive with a full-time-job, something has to be done,, and we consumers should take into account that cheap, cheap, cheap leads to nowhere.

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