Local business

Berkeley considers city-wide minimum wage hike

Some Berkeley business owners said last week, at an info session hosted by the Berkeley Chamber of Commerce, that a new minimum wage would pose challenges and have unintended consequences. Photo: Emilie Raguso

Some Berkeley business owners said last week, at an info session hosted by the Berkeley Chamber of Commerce, that a higher minimum wage would pose challenges and have unintended consequences. Photo: Emilie Raguso

A mayor’s office request to set Berkeley’s minimum wage more than $2 above than the state-mandated $8 per hour will be discussed at two city meetings this week.

The proposed policy shift has some local business owners concerned about whether they can afford the change, and how it might affect the city’s economy. Proponents of similar measures say they increase income equality and provide the people who earn the least with more room for discretionary spending.

Tuesday at 3 p.m., a Labor Commission subcommittee will tackle the issue, followed by a full-commission meeting Wednesday at 7 p.m. (Details appear at the bottom of this story.)

The Berkeley City Council voted April 30 to ask commission members to help craft a new city-wide minimum wage ordinance. The council asked the commission to use a San Francisco law, which went into effect in 2013 and set the minimum wage at $10.55 per hour, as a model. Unlike the San Francisco law, however, Mayor Tom Bates said Berkeley’s ordinance should consider special parameters for tipped employees. It would also include an annual cost of living adjustment.

The city predicts increased purchasing power for minimum-wage workers, and increased costs for their employers, as a result of minimum wage policy changes. Administrative and enforcement costs are listed as “unknown” in a recent city report.

Last week, the Berkeley Chamber of Commerce held a session at its office downtown to help members of the local business community strategize and get informed about the city’s plans. Representatives of restaurant associations from two other cities were invited to share best practices and lessons about minimum wage policy battles in San Jose and San Francisco. Councilman Laurie Capitelli also attended the meeting, along with Calvin Fong, senior aide to Mayor Bates.

Fong noted the distress expressed in April by numerous local business reps, who were caught “by surprise” by the mayor’s request to change the city’s approach to its minimum wage. Fong apologized to those in attendance and said the city aims to foster an inclusive process to come up with an ordinance that has input from a wide range of community members.

“This is still a moving target. We don’t have anything set in stone as far as the ultimate outcome,” he told the roughly 20 people in attendance. “This is just the beginning of a process, and we hope to have some really fruitful discussions and come up with something that will work for all of us.”

Fong said Bates was inspired by ordinances in San Jose and San Francisco that advocates say raise the minimum wage to a more realistic rate. He said public outreach would be a big part of the process, and that Berkeley would put a lot of thought into how to handle enforcement issues going forward.

Javier González, director of local government affairs for the San Jose-based California Restaurant Assocation, discussed the San Jose minimum wage decision, which was passed by voters in November. González said unions across the nation are taking up the cause to raise the minimum wage, and that restaurant owners and other small businesses often bear the brunt of such policy changes because they have more low-wage workers than white-collar businesses such as lawfirms.

In San Jose, he said, some restaurants have cut back on employee hours or let employees go to handle increased costs. Some have raised menu prices and others have been looking into moving out of the city. González said that, because San Jose’s ordinance didn’t have a special clause for tipped workers, the law is actually increasing inequity by boosting the wages of wait-staff, and leaving less money available for raises, bonuses or other perks for people who work in the kitchens and don’t receive tips.

Rob Black, executive director of the Golden Gate Restaurant Association in San Francisco, said that city’s ordinance is making businesses more vulnerable to retaliatory, baseless complaints due to its complaint and enforcement structure. He said the city had lost “a lot of low-wage, neighborhood-serving retail and other types of jobs” in the past four years as a result of new ordinances dealing with the minimum wage, paid sick leave and health care.

Black took issue with the methodology behind a 2007 report that found San Francisco’s minimum wage ordinance increased worker pay and had no detectable employment losses; he said researchers used county-level data that prioritized residency over place of employment, which he claimed skewed their findings.

Angus Teter, chairman of the city’s Labor Commission subcommittee on the minimum wage issue, said the group would be taking a close look at the relevant studies, as well as critiques of the studies. He said it could take perhaps a year for the commission to hash out the matter in a methodical, inclusive way.

“There is a lot of public pressure behind this right now,” he told the group.

Natalie Kniess, of the Berkeley Restaurant Alliance, said a number of local eateries are concerned about increases for tipped employees, as well as the broader issue of a boost to the minimum wage. She named Comal and Gather as “new ventures with huge overhead” that hadn’t planned for wage hikes. Kniess, co-owner of Bistro Liaison, said her businesses’ payroll costs would increase about $26,000 per year if the city increases the minimum wage. And, with 5% profits being the industry standard, she added, she’s not sure where the money will come from.

Add to that, she said, mandatory changes to employee health care costs slated for 2014, more state minimum wage increases under consideration, the specter of city enforcement taxes to cover the proposed minimum wage law, and changes to downtown parking policies that are being discussed.

“This is not a business-friendly climate overall when you have such high taxes and when you’re compounding all these issues together,” she said. “We are not ‘fat cats’ counting our money. We make 5 cents on the dollar, guys. Where’s it [the money to cover increased costs] going to come from?”

Virginia Carpenter, co-owner of Berkeley Ace Hardware, said, if the changes go through, she’d have to reconsider her current offerings for employee health coverage and other benefits such as sick leave and vacation pay.

“I can take a heck of a lot, but to just keep piling it on top of us is way too much,” she said.

John Caner, executive director of the Downtown Berkeley Association, said local representatives “want our voices at the table,” and that the chamber should work on finding available members who could fill two vacant slots on the city’s Labor Commission. Currently, noted several people in attendance, there are no business owners on the panel.

According to a city staff report posted in April, the city already has a living wage ordinance — requiring wages of at least $9.75 per hour plus $1.62 for benefits, or $11.37 for hour without benefits. The ordinance only applies to firms that do business with the city of Berkeley, however.

A city report published in March noted that only about 17.1% of the jobs in Berkeley are actually held by Berkeley residents, “a proportion that has declined over time as the somewhat higher than average rents and home prices in Berkeley has caused more people employed here to look elsewhere in the region for housing.”

Tuesday at 3 p.m., a Labor Commission subcommittee will discuss the issue, followed by a full-commission meeting on Wednesday at 7 p.m. The Tuesday meeting will take place at 2180 Milvia St. in the Redwood Conference Room on the sixth floor from 3-5 p.m. The Wednesday meeting will take place at the North Berkeley Senior Center, 1901 Hearst Ave., at 7 p.m.

Follow Berkeleyside on Twitter, and on Facebook. Email us at tips@berkeleyside.com. Would you like the latest Berkeley news sent to your email inbox once a day? Click here to subscribe to Berkeleyside’s free Daily Briefing.

Print Friendly
Tagged , , , , , , , , , , , , , , , , , , ,
  • The_Sharkey

    The consideration and service of the Berkeley city government don’t and shouldn’t guarantee you a place to stay in Berkeley if you can’t afford the going rents.

    If I was born in Pacific Heights and decided to be a starving poet and couldn’t afford the cost of living there, I don’t deserve to continue living there just by virtue of where I exited a womb.

    I’ll ask again – Why does growing up in Berkeley entitle you to live in Berkeley for the rest of your life any more than growing up in Tijuana should force someone to be stuck there?

  • 2ndGenBerkeleyan

    PS: It’s called hypocrisy too in my book.

  • guest

    I’ll say it again:

    The government of Berkeley is supposed to serve the people of Berkeley. If I grow up in Berkeley, and want to continue living in Berkeley, I am a “person of Berkeley”, and therefore entitled to their consideration and service.
    I should be considered as a “part of Berkeley” when it comes to wages.

    For that matter, ANYONE who currently lives here should be considered a part of this city. To tell a citizen of Berkeley to “move if you can’t afford it”, is not exactly fulfilling a civic duty. You, of course may tell people to do so, but the city Council should serve ALL the citizens of Berkeley.

  • Charles_Siegel

    Rather than paying that extra money in taxes, it is more effective to give that money to a candidate who is calling for higher on the rich.

    People who get that far economically are generally people who prefer to do things that are effective, and at least some of those people did give money to Obama when he was campaigning for president, even though he was promising to raise their taxes.

  • The_Sharkey

    Looks like that money was pretty poorly spent in terms of effectiveness.
    Tax rates for the rich are still almost at Bush-level lows. Donations to Obama weren’t a very smart investment.

  • The_Sharkey

    I’m just going to copy-paste this since you clearly aren’t reading it.

    The consideration and service of
    the Berkeley city government don’t and shouldn’t guarantee you a place
    to stay in Berkeley if you can’t afford the going rents.

    If I was born in Pacific Heights and decided to be a starving poet
    and couldn’t afford the cost of living there, I don’t deserve to
    continue living there just by virtue of where I exited a womb.

    I’ll ask again – Why does growing up in Berkeley entitle you to live
    in Berkeley for the rest of your life any more than growing up in
    Tijuana should force someone to be stuck there?

  • guest

    Look, we could both just repeat ourselves over and over, or you could try actually reading what i’m saying.
    I’m DISAGREEING with you.

  • Charles_Siegel

    The first step is just getting the issue as far as Congress and making higher taxes on the rich a respectable position again – after many decades of anti-tax fever. We have succeeded at getting that far.

    Of course, we all know that any political campaign is a risk – and donations to it might succeed and might not. To quote the old saying again, they did put their money where their mouths are, just by donating money to the campaign

  • The_Sharkey

    This is a “disagreement” in the same way that there’s a disagreement about the validity of evolutionary science and Creationism.

  • 2ndGenBerkeleyan

    Yes, you can easily clear $100,000 + a year as a city of Berkeley metermaid with enough overtime hours or as a BART station agent or AC Transit bus driver with some overtime and seniority (all of which require a VERY “small bit of intelligence and training” as you put it).

    But I still don’t really get your basic point. Would your physics professor have withheld his “fundamental discovery that has changed everyone’s view of the nature of the universe” without a six figure income? Higher salaries motivate academic physicists to make fundamental discoveries? At a lower pay scale, they would opt to work for the police department or BART instead and thus deprive us of their fundamental insights? Einstein refused to work out his Theory of Relativity while working as a clerk in the Swiss Patent Office while waiting for a bigger paycheck?

    Or is your point that your physics professor might have made the same discovery while working across the bay at Stanford without a 1% annual salary? In that case, neither the universe itself nor our view of it would be altered all that much if a discovery is made at Stanford and not at Berkeley. Physics is about the universe, not the university…

    I see it now. Instead of Einstein’s Theory of Relativity, he would have followed the money trail and founded Einstein Bros Bagels instead…

  • guest

    Are you saying that proponents of evolutionary theory and “Creationists” are not in disagreement?

    i wonder what your response is to my statements: i have responded to you, but you just began to repeat yourself…

  • The_Sharkey

    You haven’t responded to my statements, you’ve just repeated your quasi-religious belief that everyone deserves to live wherever they are born through birthright.

  • guest

    “your quasi-religious belief that everyone deserves to live wherever they are born through birthright.”

    You are putting words in guest’s mouth.

  • The_Sharkey

    No, I’m not.
    Those are their beliefs.

    I am editorializing a bit when I refer to those beliefs as “quasi-religious” but I am not misrepresenting them.

  • guest

    As you hold quasi-religious beliefs that one’s income should determine where one lives.
    i responded to you directly by stating that residents of Berkeley who wish to remain in Berkeley are entitled to representation by the City Council.
    Obviously, residents of Berkeley, or Tijuana, or Boston, or wherever, who wish to move elsewhere are entitled to do so. That is not a direct corellation (sp?). I am stating that those residents who WANT to live in Berkeley should be able to continue doing so, and you are comparing that to residents who DON’T want to live in Berkeley being unable to leave.

  • The_Sharkey

    Nothing religious at all about saying that someone who can’t afford the cost of something isn’t entitled to it.

    When you’re the one making the outrageous claim (that anyone who wants to live in any place is entitled to do so regardless of income) then you’re the one who has to back up that claim.

  • The_Sharkey

    Speaking of people in Berkley working “off the books” remember how outraged everybody got that Pacific Steel Casting fired all the illegal aliens working at their plant?

    http://www.berkeleyside.com/2012/02/17/hundreds-rally-and-march-to-protest-pacific-steel-layoffs/

  • PragmaticProgressive

    False.

    If you can’t afford to live in Berkeley, you cease being a person of Berkeley and the government of Berkeley has no business providing services to you.

    Your _desire_ to remain a Berkeley resident is insufficient: you have to actually BE a Berkeley resident, which means owning or renting property.

  • guest

    “If you can’t afford to live in Berkeley, you cease being a person of
    Berkeley and the government of Berkeley has no business providing
    services to you.”

    Why aren’t you advocating for the repeal of Prop 13 as applied to residential properties?

  • guest

    If you live in Berkeley, and are having trouble affording it, YOU ARE STILL A RESIDENT OF BERKELEY.
    It’s not that hard to understand.

  • PragmaticProgressive

    advocacy of change is orthogonal to dealing with the present reality.

  • PragmaticProgressive

    Yup, “if you live in Berkeley.” But that’s different than being born in Berkeley and then becoming unable to afford living in Berkeley. Being born in Berkeley entitles you to nothing besides the right to say that you were born in Berkeley without being called a liar.

  • The_Sharkey

    Not all residents of Berkeley will be able to continue living in Berkeley forever.
    Not all humans who want to live in Berkeley will be able to do so.

    Them’s the facts, Jack.
    Wishin’ and hopin’ and thinkin’ and prayin’ won’t change that.

  • guest

    I am not advocating that people who were born in Berkeley should be able to return after leaving.

    I am stating that the government of Berkley represents ALL citizens of Berkeley, including those barely able to afford living here, and thus it is 100% appropriate for them to advocate for a minimum wage hike so that struggling Berkeley citizens can afford to keep living here.

    I am also stating that it is _funky_ (to say the least) for you to suggest that long-term Berkeley residents who are struggling should just move if they can’t afford it. Have you no sense of community???

  • guest

    I don’t think that’s what the previous guest was getting at.. They were just making a point that they work in Berkeley and spend a lot of their money here.

  • bfg

    One irony is that while Berkeley raises the minimum wage it is cutting funding to various non-profits. This will result in lay-offs. The administration of this City seems to feel that its policies don’t need to make any sense.