Tuesday night, the Berkeley City Council is set to consider a new proposal to increase the city’s minimum wage to $19 by 2020.
The proposal, from the city’s Labor Commission, would increase and extend the current ordinance, which is set to boost the minimum wage to $12.53 by October 2016.
The Labor Commission’s proposal suggests bumping up the 2016 increase to $13, followed by an increase to $14.50 in October 2017, $16 in 2018, $17.50 in 2019 and $19 in 2020.
In its report to council, the commission says the adjustments will ensure that the city’s minimum wage ordinance “is successful in promoting and protecting the rights and the individual self-reliance of working people in Berkeley by raising the minimum wage to a living wage, adding an annual cost of living adjustment, and granting adequate paid sick leave to all workers.”
Monday afternoon, the Berkeley Chamber of Commerce held an information session for local businesses to learn about the proposal and discuss how to make sure their voices are heard. About 30 people attended the meeting downtown at the Chamber’s headquarters on University Avenue.
According to a chart passed out at Monday’s meeting, the proposed rate increase would put Berkeley far ahead of the pack in terms of other cities on track to increase the minimum wage over the next five years.
Members of the business community expressed frustration about not being brought into the process earlier by the city. One merchant from the Elmwood neighborhood, Jason Wayman of Elements, said council members had pledged in 2014, when the city adopted minimum wage increases through 2016, to make sure the concerns of local entrepreneurs would be heard going forward.
Councilwoman Susan Wengraf, the only council person in attendance Monday, explained to attendees at the Chamber meeting that the Labor Commission’s report was “unsolicited.”
“The council did not ask for them to come back with a new proposal with a wage increase,” she said. “We had our hands full with implementation of the decision that was made prior to this. So this has caught us all off guard.”
Polly Armstrong, who runs the Berkeley Chamber, described Tuesday night’s meeting as “kind of a watershed event for the city and the council.”
The Labor Commission has asked council to adopt its proposal on first reading, meaning the first of two votes before a new ordinance can become law. City staff, in a separate report, says council could do that or send the matter back to staff for additional review.
In response to questions about what the city had done to alert local businesses to the proposal, Nathan Dahl, a program coordinator in Berkeley’s Community Development office, said staff emailed about 6,000 local businesses — those that included email addresses on their business license applications — to invite them to participate in the Labor Commission’s discussions.
“We’re trying to increase the ways we get email information and other contact information from businesses in a way that we can efficiently send out these notices,” he said. Representatives of local business organizations, including the Chamber and the Downtown Berkeley Assocation, said they would make sure Dahl had more ways to contact local businesses in the future.
In response to questions about why Berkeley’s wage numbers are higher than other cities, Dahl said the Labor Commission’s proposed increase schedule had been intended to help cover employee medical costs. The commission had wanted to require medical benefits from employers but, after various meetings with city attorneys and other legal representatives, the commission nixed that requirement and instead factored it into the proposed wage increase, Dahl explained.
Dahl said the staff proposal that will go before council differs from the Labor Commission’s proposal in four main ways. First, rather than recommending the wage increase, staff does not take a position on whether or not council should act on the Labor Commission proposal. Dahl said that is a policy question that is up to council to decide.
Second, rather than including the sick leave provisions suggested by the Labor Commission, staff says council might consider creating a separate ordinance related to sick leave, which is the approach San Francisco took.
Third, Dahl said the Labor Commission’s approach to service charges is broad, relates to all employees, and directs all service charges collected by businesses to go to the employees themselves. Dahl said businesses often use service charges to recoup costs for expenses such as insurance, and that a requirement to give all service charges directly to employees would be more appropriate in the food service and hospitality industries only.
Finally, Dahl said the Labor Commission has asked council to require businesses that give employees “perks” — such as paid sick leave, parking passes, gym memberships and uniforms — to maintain these offerings even if the minimum wage goes up. City staff has taken the position that businesses should have the right to reconsider these offerings and make adjustments if the minimum wage requirements change.
Business owners said Monday that they would rather let the current minimum wage proposal, through 2016, play out before setting up new rules. They also noted that a new state law related to sick leave went into effect July 1, and said they want to see how that affects operations.
“Business owners are trying to get used to what council passed and what they’re living with now,” Armstrong said. She noted that, up to this point, it had been the restaurant owners who were most engaged in the discussions related to the wage increase. “But I think the $19 an hour got everybody [involved].”
Alex Popov asked if entrepreneurs would have the option to sue the city if it adopts the Labor Commission’s proposal. He said he had just signed a 20-year lease for his Telegraph Avenue sports bar, Pappy’s, and is planning to open a new beer garden on Shattuck Avenue — in the former Thalassa location — adding that planning for the future is difficult given all the changes coming down the pike. He also said the city should consider a rate increase more closely linked to the consumer price index, as some other nearby cities have done.
Business owners asked whether any members of the Labor Commission run businesses in Berkeley. Armstrong said two appointees to the commission who have local businesses had resigned from the panel because they didn’t feel their positions had been heard.
Added Councilwoman Wengraf: “The commission members feel very passionately … about their ideology… And they have a goal, and it was clearly to make the minimum wage and the living wage the same.”
John Caner, who runs the Downtown Berkeley Association merchants’ group, said it would be wise to focus on 2016 as an “inflection point,” as the city’s current ordinance is set to increase the wage through October of that year. He said the city could focus between now and then on creating a public process, with “broad community input,” to figure out any future increases.
Wayman, from the Elmwood, said he hopes, in the future, the city will take into account the make-up of the city’s commercial demographics when it considers how to increase the minimum wage. He noted that many of Berkeley’s businesses are small or even mom-and-pop enterprises that have a tougher time adapting to the increases.
Pat Poddatoori, who said he runs health care facilities, told fellow attendees that he believes in a “fair and equitable approach” to increasing wages. But he said that 70 cents of every dollar that comes into his facilities already goes to wages and benefits. He said every time the wage increases, benefits and workers’ compensation numbers go up, too.
“It’s dramatic,” he said, adding that “most of us from a revenue point of view are restricted” as far as rate increases and other ways to make up the difference.
Others said they were struggling to deal with the “ripple effect” of increasing the minimum wage for new workers, then feeling a need to boost the pay for more experienced workers correspondingly, which they said increased the burden on the bottom line.
Chamber director Armstrong said she’s hopeful council won’t vote Tuesday night to move ahead with the Labor Commission’s plan.
“The city should feel obligated to work with the Chamber to inform businesses about what they’re doing. This is our chance to do it right,” she said. “This won’t be over in one go-round at the council.”
The Berkeley City Council can receive communications from the public up through noon the day of a council meeting. Emails can be sent to firstname.lastname@example.org. The full agenda and meeting details can be found online on the city website. See a brief presentation from the meeting, drawn from materials generated by city staff. This story was originally published at 4:11 p.m.
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