SD Minimum Wage Push Triggers Shove by Mayor, Business Interests

The council Democrats' super-majority protects the measure from a mayoral veto

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    NEWSLETTERS

    NBC 7
    Some business owners are preparing for a fight over the new minimum wage, while others support it.

    A minimum wage higher than the state’s was adopted by San Diego's City Council Monday-- setting the stage for more fighting at City Hall, possibly the ballot box and in the courts.

    The council Democrats' 6-to-3 super-majority gave Monday’s "second reading" passage of the wage ordinance a political heat shield against the veto power that Mayor Kevin Faulconer quickly announced he'll invoke.

    SD Businesses Fear Minimum Wage Hike Will Harm Business

    [DGO] SD Businesses Fear Minimum Wage Hike Will Harm Business
    Opponents of a San Diego minimum wage hike are now planning to take their case to the courts and the streets. Small businesses fear the rise will force them to downside, as NBC 7's Gene Cubbison reports.

    Business leaders are dead-set against the measure, and small-scale merchants who rely on minimum wage workforces warn that they'll soon wind up paying around $4,600 a year more per employee in payroll costs and taxes.

    "I can't increase my costs like some businesses can,” said Ann Kinner, owner of Seabreeze Books and Charts in Point Loma’s Fleetridge district.

    “The only thing I can do is cut the number of hours that I am paying someone to work in my store,” Kinner told reporters at a Monday news conference outside the offices of the San Diego Regional Chamber of Commerce.

    Nonprofit charitable and community-service organizations also are up in arms.

    "The bottom line is that this ordinance would negatively impact thousands of people,” said Mark Klaus, CEO of Home of Guiding Hands. “Thousands of children, adults, adolescents and their families."

    Some 200,000 minimum wage earners in San Diego will be eligible for an increase over the state's new benchmark of $9 an hour to $9.75 on January 1st, with further hikes phased in to $11.50 an hour by 2017, followed by automatic inflation escalators.

    Critics predict that the cumulative 43 percent rise in wages over two years will lead to higher consumer prices that could result in layoffs and work-shift reductions.

    They also say one in six businesses in San Diego would be inclined to move elsewhere.

    But supporters say those dire predictions were made in San Jose two years ago, when voters approved a $10 hourly minimum by a 60-to-40 percent majority -- and they didn't come true.

    “The reality was that 9,000 new businesses were added one year after implementation, and 4,000 jobs were added in the low-wage sectors," said Robert Nothoff, research analyst at the Center on Policy Initiatives.

    Nothoff figures the higher minimum wages will boost recipients’ spending power by a combined $260 million annually, smoothing out whatever economic disruptions businesses may experience.

    “The cure to all of that,” he said in an interview Monday, “is making sure people can actually buy products at your shop and at your store."

    Faulconer’s not buying that logic.

    “This ordinance puts our job growth in jeopardy and will lead to higher prices and layoffs for San Diego families,” the mayor said in a statement issued by his director of media relations. “I will veto this ordinance because we should be looking for ways to create more jobs, not putting up roadblocks to opportunities.”

    The fight doesn't figure to end with a council override of Faulconer's veto.

    The Chamber of Commerce is already fundraising for a referendum campaign against the minimum wage measure, which includes “earned sick leave” provisions.

    Said Chamber President/CEO Jerry Sanders, in a statement: “The City Council’s minimum wage increase is effectively a tax on every San Diego resident because the cost of this increased wage will be passed on to consumers in the form of higher prices in goods and services.”

    There's a tight time window for a petition signature drive to qualify as a ballot-box challenge, but activists say it's "do-able" – and that legal challenges also are a possibility.