Richmond to consider minimum wage hike
on January 14, 2014
A Richmond council member is seeking to put a measure on the November ballot that could raise the city’s minimum wage to at least $11, potentially making it the region’s highest.
Councilwoman Jovanka Beckles sponsored the resolution, scheduled to be heard at Tuesday night’s council meeting, to direct city staff to draft three possible minimum wage hikes – $11, $12.30 or $15. The options could come back to the council for consideration within 60 days.
If the council approves one of the rates, Richmond voters would have the final say on the Nov. 4 general election ballot.
The proposed minimum wage hike would exempt businesses with less than 10 employees and those operating less than two years in Richmond with fewer than 26 workers.
“People are really having a hard time making ends meet and they are stressed out,” Beckles said. “As the cost of living has increased in the Bay Area, the minimum wage rate has not. We are trying to correct that in Richmond.”
Richmond’s proposal would be a boost over the current federal minimum wage of $7.25 and the state rate of $8.
The state hourly wage is set to increase to $9 in July and $10 in 2016. San Francisco jumped to $10.74 on New Years Day, making it the highest in the region. San Jose follows at $10.15.
Richmond has long had a living wage requirement for contractors that is adjusted to keep up with the area’s cost of living. In 2009, the wage was set at $16.69 and will likely increase to more than $17 this year, according to the staff report.
“This is about creating jobs and putting people to work,” Beckles said. “I really see this as a way to encourage business and have them thrive. This is a way to help businesses currently struggling because people will have money to spend. If the consumer demand increases, employers can afford to hire more people.”
Beckles says the city council has the authority to raise the minimum wage, but wants voters to have the final say.
But Katrinka Ruk, executive director of the Council of Industries of West Contra Costa County, says the business community has been excluded from the discussion of a possible minimum wage increase.
“Further increases beyond the state’s minimum wage could force businesses located in Richmond to make do with current staffing and hinder additional hiring,” Ruk wrote in an email to city council members. “Worst yet it might create cutbacks in employment.”
Should the council move forward with the minimum wage raise, Ruk recommends the city conduct a feasibility study to determine the potential economic impact on current businesses as well Richmond’s ability to recruit new businesses if the wage is increased.
Vice Mayor Corky Booze said he’s not opposed to a minimum wage hike, but he too is worried about the impact it could have on business owners.
“We haven’t even done a study on what type of businesses we have in the city of Richmond,” he said. “You have to look at what this will do to the community when you try to bring businesses to Richmond and they know this kind of law is here.”
If you go:
The Richmond City Council will discuss a possible minimum wage hike at 6:30 Tuesday at the Richmond City Council chamber, 440 Civic Center Plaza.
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Although this article was written BEFORE the meeting, these comments are based on what happened AT the meeting:
In a more perfect world we would all be paid a great salary for the work regardless of the market demand or the skills we possess. In that more perfect world we would never have to worry about the cost or the consequences of our actions.
Do I need to remind everyone that we DO NOT live in that world?
As well intentioned as this proposal is, it’s flawed in so many ways.
First, Richmond does not live in a vacuum. We cannot change the world here in Richmond and expect the rest of the world to change along with. This is a proposal that will ONLY affect businesses and employees here in Richmond and not in the surrounding cities. This argument is NOT about raising the minimum wage–it’s about raising the minimum wage just here in Richmond.
In particular, when we increase the wages for menial labor employees the companies they work for should not be expected to eat the increased costs.
We have to know that they’ll pass along those costs to the consumer. And, unlike San Francisco we have options on where to spend our money. In San Francisco, if someone wants a cheap hamburger they’re not going across the bridge to Oakland or head south to Daly City. But here in Richmond we can always go to San Pablo or El Cerrito where the cost of labor is lower and the products these minimum wage workers make costs less. Why would I spend $16 for a bucket of KFC in Richmond when I can drive for a few minutes more and buy the same bucket for $12? Why would I buy my quarter pounder for $4 here in Richmond when I can go just down the street and get the exact same quarter pounder for only $3?
Did the authors of this resolution even speak to any of these businesses to get their input about the effect it might have on their businesses? Or is this one of those times when they need to just stick it to businesses again? The authors admitted that they had submitted this proposal without consulting with local businesses.
And what about those industries where tips are an integral part of the wages an employee earns and the costs that the business charge? Beauty salons, restaurants, barbershops, dog groomers, taxis? You’re not exempting them from the current minimum wage which requires a part of their wages to be made up of tips so those costs will really jump. When a Perm jumps from $50 to $65, will people still go to that beauty shop or will they go somewhere where they can get the same service for a whole lot less?
And what about when the cost of a meal at their favorite restaurant jumps through the roof. Most of us here in Richmond aren’t as wealthy as the City Council members and can’t afford to throw our money around willy nilly like that. We need to pinch our pennies.
This proposal has exemptions for businesses that employ fewer than 10 people but what that’s going to do is to force employers to discharge most of their part time workers and convert others to full time so they can get that exemption. What will that do to the teenagers that depend on part time jobs or the mothers trying to pick up a few extra bucks that will now lose their jobs?
What I spoke about at that Council meeting was not against raising the minimum wage. What I was speaking about that night was about raising the minimum wage here in Richmond when the surrounding communities are still paying workers significantly less.
This has a big impact on the businesses HERE IN RICHMOND. The cost of an item manufactured or sold here in Richmond will cost the employer more and this will be passed on to their customers. If the minimum wage were standardized in our community, then businesses would not have a competitive advantage over the same type of businesses in El Cerrito, San Pablo or Pinole.
The small business exemption⎯where new and small businesses will have a competitive advantage over those businesses that are required to pay their employees the much higher wage⎯will give them a competitive advantage of businesses that have been around longer or are slightly bigger.
I can easily see smaller businesses that have more than ten employees rework the way they employ people to get below that threshold so they can stay competitive. The difference between having ten employees and eleven employees will increase the labor costs by well more than 50%. How does this Council think this will affect the ability of that business to remain competitive?
Why are we giving small businesses special privileges over longstanding businesses?
Why are there so many holes in this resolution where the specifics were left out?
And what will be the cost to put this on the ballot? In the past we’ve been told this would be something in the neighborhood of $65,000. Is that really considered “minimal” like was written in the agenda packet? And will the City commit any of their resources to get this measure passed? Without any formalized support from the City, why should we think that this measure could successfully go head to head against businesses like Wal-Mart, Target, McDonalds, Burger King, KFC and the other bigger businesses that would be directly affected by this significant increase in the wages they have to pay their employees? Do you remember what happened when the City took on the soda people?
Probably the most insulting event of the evening was when Councilmember Myricks chose to make a personal attack against a speaker (me) because I disagreed with this proposal. When one of the authors of this resolution states “it’s important that people participate in this democracy, that they feel empowered” and a co-sponsor and close associate of this Councilmember makes personal attacks against a speaker because he won’t drink the Kool-Aid, what does this tell you about the process?
Did anyone survey the “minimum wage” employers to see how many people are actually making just the minimum?
Every time I go to a fast food restaurant or have a pizza delivered, there are new people working. The turn over in the restaurant business is quite frequent.
Most of these are entry level jobs. People either advance or move on to better paying jobs.
A job making pizzas or hamburgers is not a career job that can support a family.
Besides what skills are needed to get hired for many of these jobs? Surely not a college degree.
Years ago there was a shortage of fast food workers in San Ramon and some parts of Marin. The employers on their own offered higher than the minimum wages.
I personally knew a woman that lived in Concord that commuted to San Ramon to work at a McDonalds because they were paying a decent salary above the minimum wage.
Market forces dictate what a salary will be and what the price of the product will be.
I wonder how many on the council actually run a business small or large that sells a product or provides a service, without getting grants or subsidies and have employees that they have to pay workers comp, medical, payroll taxes on top of their salaries?
If they did, they would know what it costs to have employees.