Novato eyes fast-track minimum wage hike
Author: Will Houston
Date: July 31th 2019
Published: Marin Independent Journal
North Bay labor groups are eyeing Marin County as the next battleground to accelerate minimum wage hikes in the face of the region’s rising housing and living costs.
The first push has already begun in Novato, which is considering a $13.50 per hour or even up to a $15 per hour minimum wage that could be in effect a year from now. Minimum wage is currently $12 per hour.
The City Council voiced support in late July for the faster wage hike, but differed on how soon it should occur. Council members generally favored a July 2020 start date, though there was less consensus on whether the wage should immediately rise to $15 per hour or less. The council scheduled an Aug. 27 hearing to discuss how it could proceed.
“I really believe the city of Novato needs to play a role in lifting everyone up so that they can afford to live here,” said Councilwoman Pat Eklund, who pitched the wage hike idea at the start of the year. “You can’t do it on the current minimum wage.”
Statewide, the minimum wage is set for an incremental climb to $15 per hour by 2022 for employers with 26 or more employees and by 2023 for small businesses with 25 workers or less. Novato business owners urged the city to stick with this schedule to prevent layoffs and rising prices. However, labor groups say the rapidly rising cost of living in the Bay Area warrants a speedier schedule if the region hopes to enable its workers to even scrape by.
A recent National Low Income Housing Coalition study found Marin once again tied for being the most expensive county in the nation to rent a home, with tenants required to make $60.96 an hour to afford to rent a modest, two-bedroom home.
Mara Ventura, executive director of North Bay Jobs with Justice, said while they’re well aware that a $15 per hour wage is not a “silver bullet” solution, she said, “we want to make sure our most vulnerable residents in Marin County have a fighting chance to stay here and to continue living here.”
The group, which has been promoting a region-wide wage hike and has already made some headway in Sonoma County, intends to approach San Rafael and San Anselmo with the idea as well as any other local jurisdiction willing to consider it.
Earlier this month, the Petaluma City Council adopted an ordinance raising the minimum wage to $15 per hour by 2020 with annual cost-of-living increases thereafter. Earlier this year, the city of Sonoma adopted an ordinance to increase the minimum wage to $13.50 per hour for large businesses, to $12.50 for small businesses by 2020 and to $15 per hour by 2021 — a model that Eklund favored.
Other cities in Sonoma County such as Santa Rosa, Cotati and Sebastapol are considering whether to follow suit. This concerned Councilman Josh Fryday, who worried Novato would be outpaced in the labor market if it didn’t act on the $15 minimum wage, which he acknowledged was the minimum the city could be doing.
“With where other cities are going we’re going to quickly find ourselves uncompetitive,” Fryday said. “I am very much in favor of moving forward with this. I am also very sympathetic what the impact will be on small businesses.”
Mayor Pro Tem Denise Athas was less keen on moving ahead with an ordinance in August, saying that there needs to be far more outreach to local businesses before making a final decision.
“I think there is a lot more discussion that needs to be had,” Athas said.
Councilwoman Pam Drew said she was proud that the city was considering the wage increase, but called for the city to take more time assessing the potential financial implications on the city going forward.
“There’s a lot of questions that are still out there and I would really like to see those questions answered,” Drew said. “When they are answered, I think we should make our very best effort to come up with money.”
Assuming the city did adopt a $15 per hour wage by Jan. 1, 2020, for 155 part-time employees who work a maximum of 1,000 hours the city is estimated to spend an additional $422,220 on wages each year, according to city staff. Under this scenario, the city would spend a cumulative $1.3 million in additional wage expenses by 2022 compared with $772,200 if it sticks with the state-mandated wage schedule.
Business owners told the council that they have planned for the state’s minimum wage hike, but said expediting it could have dire consequences. However, recent research from the UC Berkeley Labor Center mostly contradicts some of the fears expressed by business owners.
Jeff Coplin, co-owner of the Matt and Jeff’s Car Wash on Vintage Way, described the council’s proposal as a “job killer” that will backfire and likely result in him having to let go some of his 60 employees. That’s because the financial hit wouldn’t be limited to wages, he said, but would also mean increases to benefits such as workers’ compensation and disability payments.
Tracie Prado, owner of the Village Restaurant on Grant Avenue, said more than half of her staff makes $30-40 per hour when tips are factored in. Prado said she had time to prepare for the state’s incremental wage increases, but said for the city to suddenly jump to $15 per hour in January 2020 would result in layoffs and price increases.
“By raising more than half of my staff’s wages close to 38 percent practically overnight is really hard to swallow,” she said. “If this happens I will have to let some employees go.”
Representatives of the Novato Chamber of Commerce and Downtown Novato Business Association also spoke in opposition of the proposal.
Labor advocates disagreed that the wage increase will be a job killer and cause businesses to close.
“We should try to lead the way in Novato and show that we do care about the workers that are washing the dishes, that are changing the bedpans, that are doing the really hard work,” said Peter Tiernan, a Novato planning commissioner and in-home care provider.
A 2018 UC Berkeley Labor Center study by Ian Eve Perry analyzed the impacts of a $15 per hour minimum wage by 2020 increase in North Bay counties. About 192,000 workers would be affected — about 9,000 of work in Novato — and would receive an extra $3,000 per year. While business owners said that many of the minimum wage employees in the city are teenagers gaining job experience, the study found only about 94 percent of the impacted workers would be 20 years old or more and more than half over the age of 30. About 60% of the affected workers would be people of color with about half having some college experience.
The study also analyzed the cost to restaurants in cities where these minimum wage hikes have taken place. The results showed restaurants’ costs increased by an average of 2.1 percent and that prices to customers rose by 1%.
“Research has found that increasing the minimum wage has been associated with reductions in poverty, income equality and the use of public assistance programs,” Perry told the council.
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