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Minimum Wage
May 19, 2015

As the national movement to increase the minimum wage gains more traction, states and communities of all scales are beginning to adopt local minimum wage legislation. Many states, like California and New York, already have separate state minimum wages that are higher than the federal rate. Individual cities and counties are increasingly passing separate and localized minimum wage laws, especially as the cost of living continues to rise. Cities like Seattle, San Francisco, and Oakland are considering separate increases to their minimum wage requirements in addition to the already planned statewide increases for 2016. Here in the Monterey Bay Region, discussions about following suit and increasing the minimum wage are taking place both amongst local governing bodies and within academic institutions.

On Tuesday May 5th, the Santa Cruz City Council announced that they would be preparing an RFP to conduct a study of the local minimum wage and how it may affect businesses in Santa Cruz. The study will be commissioned and overseen by the City’s Economic Development Department which has expressed keen interest in hearing from local business stakeholders. Members of the Santa Cruz County Business Council, the Santa Cruz Area Chamber of Commerce, and the Downtown Association were present during the time of the announcement and expressed their willingness to participate.

The statewide minimum wage increased from $8.00/hour to $9.00/hour in 2014, and is set to increase to $10.00/hour come 2016 following the passage of Assembly Bill 101, which was introduced by Luis Alejo (D-Salinas/Watsonville). Whatever the results of the Santa Cruz study, it is likely that other cities in the region will follow with similar conversations. Community leaders will need to be poised to provide necessary input regarding this topic so that the best possible outcomes can arise from these discussions.

Other regional organizations that should be expected to weigh in include the Monterey, San Benito and Santa Cruz County Farm Bureaus; the Monterey and San Benito County Business Councils, the Monterey Peninsula Chamber of Commerce, the North Monterey County Chamber of Commerce, the San Benito Chamber of Commerce, Hollister Downtown Association, the Old Monterey Business Association and Downtown District, the Monterey Bay Central Labor Council, the Service Employers International Union, the regional chapters of the United Way, the Food Bank of Monterey, Goodwill Industries of the Central Coast, and the United Farm Workers Foundation, among others.

At the heart of this consideration is how to balance our area’s high cost of living with our core industries who depend upon access to low cost labor. Monterey and Santa Cruz counties, (and increasingly San Benito county) have higher costs of living relative to the state of California and surrounding areas precisely because there exists a persistent wage gap in the face of high housing costs. The region’s dominant industries, agriculture and hospitality, both employ predominantly low wage workers, the majority of whom live below the poverty line. Furthermore, according to the Massachusetts Institute of Technology’s “living wage calculator”, the current $9.00/hour state minimum does not amount to a “living wage” in any of the three Counties.

From the perspective of local business, a higher, separate minimum wage presents a series of problems beyond just cost. Having multiple jurisdictions adopt separate minimum wages may lead to an uneven landscape where the cost of labor and the price of goods could vary significantly across boundaries, creating disadvantaged competition.

In Monterey, many representatives from the agricultural industry opposed the initial Alejo bill, with one strawberry farmer, Ed Ortega, stating that paying the minimum wage was near impossible as is. Others, who claim to pay above the minimum say that if the minimum wage were to rise, those earning above the minimum wage would expect a proportional increase in wages, so as to “maintain their status in the wage hierarchy.”

Santa Cruz businesses and organizations also expressed frustration that this topic was being considered at a time when the state minimum wage is set to increase 25 percent in a period of just 18 months. Furthermore, a ballot measure that would have created a separate minimum wage, Measure G, was defeated just 9 years ago by a margin of 18 percentage points within the city limits, settling the debate in their eyes.

From the perspective of low wage workers, a minimum wage increase would obviously increase their take home pay, but it may also lead to fewer jobs overall as employers are forced to make up the costs by cutting positions. It may increase the cost of living as food and other expenses raise in price so that businesses can cover the additional costs of higher wages. Interestingly enough, a recent national poll found that a majority of Americans would oppose a minimum wage increase if it resulted in a net loss of jobs.

That being said, with more take home pay these workers might be inclined to spend more money locally. Higher take home pay also leads to less commuting because workers can afford to live closer to where they work, putting less stress on our public infrastructure and reducing Greenhouse Gas Emissions from driving.

The potential for increasing the minimum wage is also symbolically tied to notions of class identity and community self determination. UCSC Professor Steve McKay recently published the results of a survey of 1300 low wage workers in Santa Cruz County, alongside a series of art and narrative pieces designed to tell the story of what it is like to be a low wage worker in this region.

The results of this study were published at a live event at the Santa Cruz Museum of Art and History, which also provided a platform for proponents of increasing the minimum wage to recruit other community members.

The Service Employers International Union (SEIU), the largest labor union in California with chapters in all three Monterey Bay Counties, joined together with Santa Cruz Day Worker Center to advocate for increasing the minimum wage in the aftermath of the event.

MBEP will continue to follow this issue as it develops, and will engage our members with any input opportunities that may arise.

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