The fight over a "livable" minimum wage in San Diego has just kicked up to a new level.
Business and industry leaders came out Thursday with a sturdy warning of serious economic consequences to employers and hourly workers alike.
They predict that affected businesses will downsize, reduce worker schedules and suffer losses if customers balk at price hikes to cover the higher employee costs.
Against the backdrop of the state's minimum wage going from $8 to $9 an hour July 1 – and $10 an hour 18 months later -- there's now a move at City Hall to try to raise it to $13.09 an hour.
Critics predict that businesses will have to downsize, reduce employee schedules and suffer losses if customers balk at price hikes.
Small business owners say a 64 percent increase over the current minimum is too much, too soon to absorb.
"It's going to have a big adverse impact on everybody, " says Moe Sadighian, proprietor of Mariscos El Pulpo Cafe in downtown’s Gaslamp Quarter. "A lot of businesses that I spoke to that have six to nine or 10 employees, the restaurants, they're going to close. They can't do it."
"You can't double the price overnight on a menu item and expect everybody to be okay with it, and it's not just $13 an hour,” Sadighian said. “People need to understand you've got workers compensation, you've got taxes, you've got everything else that's coming right behind it."
Sadighian and other business owners who employ hourly workers gathered a nearby Ace Hardware store where leaders of the San Diego County Taxpayers Association and Regional Chamber of Commerce held a news conference and issued a report warning against a $13-plus hourly minimum.
"My agency already pays over minimum wage two to three dollars an hour,” said Linnea Goodrich, owner of Firstat Nursing Services, which specializes in home care for the elderly. “So if the minimum wage is increased to $13, my employees obviously are going to expect to get $15 to $16 an hour."
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Goodrich worries that her firm’s clients, most on fixed incomes, won’t be able to afford the higher rates that would have to be charged to offset the minimum wage hike.
Said Michael Hormozi, owner of MAK Cleaners: "We raised our prices six percent just to prepare for the state (minimum) going up, and we lost 10 percent of our business."
Patti Conners, human resources director for Phil's BBQ, said her firm is “exploring the possibility of becoming a non-tip restaurant and imposing a mandatory service charge on all sales" – and sharing some the proceeds with employees.
As different speakers took their turns at the podium during the news conference, the pauses were punctuated by minimum wage-hike advocates hoisting signs and banners and shouting slogans such as, "When low-wage workers win, all workers win!"
Said Bo Elder, representing the Coalition for Labor & Community Solidarity: "People will be able to pay for gas, pay for their groceries, and not worry about making rent."
Preston Chipps, a demonstrator who said he has started and owned businesses and corporations, thinks it behooves merchants to elevate employee wages.
“I always treated by employees as well as or better than myself,” Chipps said, “Because it's in my long-range self-interest for them to do well, for them to be able to purchase my goods and services."
Progressive scholars cite studies that show economic upheaval hasn’t followed in other California cities where minimum hourly wages were raised.
"This is going to give an increase in pay to 220,000 working San Diegans," says Robert Nothoff, a research and policy analyst for the progressive think tank Center on Policy Initiatives. "It's going to inject an additional $660 million back into our local economy. The more people who are making good wages, the better it is for our local economy."
The $13.09 hourly minimum will be vetted next week by the City Council's Economic Development Committee.
Council President Todd Gloria proposed it as a ballot measure, but there's talk of the council passing it as an ordinance.
If that happens, opponents would seem likely to launch an referendum campaign against it.
On Wednesday, the Bay Area city of Richmond's council passed hourly wage minimums of $9.60 next year and $13, effective in 2018.
Those measures grant key exemptions to certain businesses that pay wages on fewer than 800 employee hours on a bi-weekly basis and those with more than 50 percent of their revenues emanating from outside the city limits.
