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Working In These Times

Tuesday, May 26, 2015, 12:58 pm

LA’s Min. Wage Will Be $15 by 2020. But This Bay Area City’s Minimum Will Be $14.44 By July.

BY Andrew Klein

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Fast food workers at a Fight for $15 protest in Oakland, where a coalition of unions and other progressive organizations pushed through a ballot measure that Emeryville used as a template for their own campaign to raise the minimum wage.   (Steve Rhodes / Flickr)

With proposals to raise the federal minimum wage languishing in Congress, cities are increasingly taking matters into their own hands and leapfrogging ahead of the current national rate of $7.25. On May 19, Los Angeles became the largest city in the country to approve a $15 hourly minimum wage—one of several California cities including San Francisco, Oakland and San Diego which have recently passed substantial wage hikes. Seattle, Washington, set the precedent in June 2014, pledging to raise its minimum to $15 over the next two to seven years, depending on the size of the company.

Most of the increases will be implemented gradually over several years. LA’s minimum wage, for example, will reach $15 by 2020. But earlier this month, one small California city decided that its low-wage workers shouldn’t have to wait that long for a living wage. This summer, Emeryville will set a new national precedent when its minimum wage surges to nearly double the federal rate.

“Let’s Give Emeryville and Workers a Raise”

“This is an issue that evokes strong emotions,” said Emeryville Mayor Ruth Atkin before the start of the public comment session for the city council ordinance that would raise the minimum wage to $14.44 per hour by July 1—making Emeryville’s rate the highest of any city in the nation. (The small Seattle suburb of Seatac also passed a $15 minimum wage, but not all workers in the city are covered under it.)

The mayor—an ardent supporter of the living wage campaign in Emeryville and the national Fight for $15—instructed attendees of the May 5 city council meeting to hold their applause and boos until everyone had talked. As dozens of low-wage workers, union representatives, faith leaders and community members addressed city government officials on the moral, social and economic significance of passing the living wage ordinance, seated supporters signaled their approval with spirit fingers twinkling in the air, Occupy-style, and signs reading “Let’s Give Emeryville and Workers a Raise” rippling back and forth across the room.

If boos had been permitted, it’s unclear they would have been forthcoming. Of the scores of speakers that night, only three issued any reservations about the proposal and not a single person spoke in outright opposition. Just minutes after public comment came to a close, the council approved a “first reading” of the ordinance unanimously, guaranteeing its passage into law. When the vote concluded, audience members began hugging and high-fiving. “You can clap now,” Mayor Atkin told them, and the room erupted in celebration.

The ordinance’s path to victory began in 2014. It first surfaced at a time when the Lift Up Oakland coalition—a network of local nonprofits, unions, elected officials and progressive businesses—was building momentum in the nearby city for a November 2014 ballot initiative, which would raise the city’s minimum wage to $12.25. After the measure passed overwhelmingly, Mayor Atkin quickly assembled a team of supporters to push for similar legislation in her own city.

Most of those involved in hatching the Emeryville ordinance had worked on the Oakland campaign, and some of them, including the mayor, had helped pass Measure C in 2005. This groundbreaking law compelled Emeryville’s four big hotels to increase their workers’ pay, implement job security rules and adhere to workload standards, which are crucial in an industry responsible for a high number of on-the-job injuries.

Despite an extremely expensive campaign waged by the No on Measure C camp, which called itself the “Committee to Keep Tax Dollars in Emeryville,” 54 percent of Emeryville voters endorsed the hotel regulations, which have subsequently served as models for cities like Long Beach and Los Angeles.

With the 2005 victory, Emeryville seemed to make a political pivot. Once known as a corporate haven with a city council largely dominated by business-friendly voices, the city has since become a distinctively progressive city at the national forefront of living-wage activism.

Emeryville’s “Fight for Human Decency”

Many of those testifying before the city council on May 5 called the most recent legislation a game changer for Emeryville. Brian Donahue, a 35-year resident, observed that Emeryville—a small city (population: 10,000) with an abundance of big-box retail stores and restaurant chains—has never had the political and cultural cachet of its larger Bay Area neighbors like Oakland, Berkeley and San Francisco.

“We’re seen as one big shopping mall,” Donahue said. “I had been embarrassed to tell other people in the Bay Area where I was from.”

But that changed for Donahue when it became clear that Emeryville would be making history with its $14.44 per hour minimum wage. Before the raise goes into effect, Oakland and San Francisco will remain tied for the highest current minimum wage in the United States with a rate of $12.25 per hour.

“With income inequality out of control,” said Mayor Atkin just before voting yes on the measure, “we need to lift the floor for low-wage workers so if you work full-time, you don't need public assistance.”

This is precisely what the ordinance will ensure. The law is designed to transfer the cost of supporting low-wage workers from taxpayers to the city’s employers. Prominent among them is Emeryville’s branch of Ikea—a corporation which took home $3.3 billion in profits last year. The $14.44 per hour figure reflects the lowest amount a full-time worker can earn without qualifying for government assistance. That number will rise each year with inflation, such that by 2019 the minimum wage in Emeryville will reach $16 per hour.

Emeryville’s living wage initiative has implications that extend far beyond the city’s two square miles. At an April 15 rally in Berkeley, Mayor Atkin told hundreds of fast food workers, adjunct professors, union organizers and activists about the “fight for human decency” in her city. The rally was staged in conjunction with the national, 200-city Fight for $15 protest on tax day. Organizers called the event the largest demonstration of low-wage workers in U.S. history.

Atkin noted, “We are creating history” in Emeryville, as the city was then on track to have one of the highest minimum wages in the country by July 1. Her speech prompted a torrent of cheers. At the May 5 city council meeting, the mayor spoke in a similar moral register, declaring, “[the ordinance] goes a long way towards extending the common good to everyone, which is what government is all about, in my opinion.”

The urgency of a government intervention to improve the living conditions of those at the bottom of the income ladder was a view promoted by many low-wage workers, who delivered personal testimonies to the city council. Jacquelyn Kingkade, an employee of a local Starbucks since August 2014, broke down in tears while describing her daily struggle to pay for essentials like rent and food in one of the most expensive regions in the country.

“This won’t make us rich,” she said in reference to the ordinance. “But it will help.”

Jac Asher, a member of the Emeryville city council and a low-wage employee herself, working as an adjunct professor in UC Berkeley’s Gender and Women’s Studies program, spoke of a “crisis of inequality in the Bay Area,” adding that the new minimum wage was just one element of a broader effort to make the region affordable for everyone.

Business Concerns

One of the main obstacles to passing an unprecedented minimum wage in Emeryville came from a contingent of employers who expressed fears about its impact on business. Only a sprinkling of business representatives turned out for the May 5 city council meeting, but the employers’ perspective was aired during a special study session in April. While no one spoke out directly against the ordinance then, many worried out loud about its effect on business performance. Some raised the specter of vastly higher prices for consumers, which they called an inevitable byproduct of an increase in labor costs—a claim that many economists contest. Others—particularly restaurant owners—suggested the wage hike would put too much pressure on their establishments, which often operate on thin profit margins.

The most unusual comment of the session came from William Woods, a regional manager of the national restaurant chain Denny’s, who said that a higher minimum wage in Emeryville would invite a “crime element” into the city, eager to prey on its higher paid workers. Speaking to the East Bay Express about Woods’ unconventional theory, Kent Wong, director of the UCLA Labor Center, said there is no evidence indicating a correlation between higher wages and higher crime—and that if anything, research suggests that increasing the minimum wage leads to a drop in crime.

In response to business concerns, Emeryville City Council member Dianne Martinez stated at the May 5 meeting that the ordinance’s enormous benefit to struggling workers would outweigh its potential burden to companies. “If our workers are creative enough to live off of minimum wage,” she said, “I think the small businesses here are creative enough to make this work.”

The ordinance does, however, offer a concession to small business owners. Instead of paying the $14.44 per hour required of large firms, small employers (defined as firms with 55 or fewer employees) are only required to pay their workers $12.25 per hour initially—mirroring the current minimum wage rates in Oakland and San Francisco which both went into effect this year after achieving a staggering margin of voter approval (82 and 78 percent, respectively) last November.

The small-business rate will rise to $13 per hour by July 1, 2016, and will increase by one-dollar increments each subsequent year until it converges with the rate for large employers in 2019. From that point forward, Emeryville will have a single minimum wage for all employers, which will continue to rise with the cost of living.

Regional Standard

Emeryville’s reputation as a haven for low-paying industries as well as its recent history as a progressive hub can help explain its vanguard role in the national Fight for $15.

“Because it’s a smaller city and because it seems kind of hidden away in the shadow of Oakland and Berkeley, it’s been a very good place for businesses,” said Gary Jimenez, regional vice president of the Service Employees International Union (SEIU) Local 1021. Business owners “think they can come in and quietly set up business the way they want to. But this city council led by the mayor has really stood up for working class people to say, ‘We want business here, but if you’re going to come in here, you’re going to be good citizens and you’re going to do good by our people.’ ”

The same features that made the living wage ordinance possible in Emeryville are present in the Bay Area as a whole. Bay Area politics have long played out as a tug-of-war between Chamber-of-Commerce-aligned corporate interests and the region’s famed progressive forces, including many grassroots groups.

This dichotomy has produced a familiar pattern in which politicians run to the left to get elected, but once in office start pandering to big real estate developers and handing out corporate tax breaks in exchange for financial backing. Though this pattern is still commonplace in San Francisco, other Bay Area cities like Emeryville and Richmond have been able to bring decisively progressive governments to power in recent years, and officials have steadfastly resisted business pressures even after elections are over.  

Even when progressives have failed to exert their influence on elected officials, they have succeeded in marshaling support for pro-worker ballot measures. In 2003, San Francisco became the first city in the country to pass a municipal minimum wage boost, and it did so with a business-friendly mayor in office. In the past decade, a number of Bay Area cities have followed San Francisco’s example, including Emeryville in 2005 with the passage of Measure C.

The success of these initiatives, as with the generally progressive trend in recent Bay Area politics, should be interpreted in part as a reaction to some of the most extreme income inequality in the country. The region is home to the tech industry, along with many financial services operations—San Francisco, for instance, is home to the headquarters of a myriad of corporations—which support a relatively high number of well-paying office jobs. But it is also home to a large concentration of low-paying service sector jobs which cater to the disposable incomes of the office professionals. And because service jobs are difficult to outsource, many argue that a pay raise in the service sector is inevitable, since employers will have no way to circumvent their workers’ demand for higher wages short of going out of business.

Understanding its potential as a foothold for the Fight for $15 movement within the solidly progressive Bay Area, the local labor movement was involved in Emeryville’s living wage initiative from the beginning. Representatives of SEIU, UNITE HERE, and other groups focused on organizing low-wage workers have described the victory in Emeryville as an important link in a broader campaign for a regional minimum wage standard.

Regional coordination has been a constant in Bay Area living-wage proposals, as cities from Sonoma to Sunnyvale have aimed to link up their wage policies with those of their neighbors. With potential minimum wage raises looming in Berkeley and Richmond and with labor-backed groups like Raise the Bay drumming up support for a “regional referendum," establishing a regional living wage standard in the Bay Area is not as utopian as it once seemed.

And such a victory could energize the national Fight for $15. For one, it could mark the demise of the common Chamber of Commerce talking point that higher minimum wage initiatives are “job killers,” because businesses tend to relocate to areas where their labor costs are lower. With a regional wage standard, companies seeking access to the Bay Area’s market of relatively well-off consumers, would have no choice but to pay their workers higher wages.

The same logic has been at play in Los Angeles. After the city’s minimum wage initiative passed this week, supporters of the increase immediately turned their attention to securing comparable raises in nearby cities, like Pasadena, Santa Monica and West Hollywood, and more broadly in Southern California.

There’s no denying that the threat of capital flight—which has repeatedly disciplined municipal government policies since New York City’s near bankruptcy in 1975—will never vanish entirely. However, for a Bay Area economy increasingly dependent on a fairly immobile service sector and a firmly established high-tech industry, a mass exodus of investment seems highly unlikely even in the event of a full-on regional living wage.

Statewide Action

With the seemingly unstoppable spread of minimum wage hikes in the Bay Area and a municipal path to $15 now prepared in Los Angeles, the Fight for $15 could soon claim as turf the two largest voting blocs in the largest state. This impressive momentum has inspired recent efforts to raise the minimum wage on the state level. In late April, SEIU United Healthcare Workers West announced its intent to begin collecting signatures to place “The Fair Wage Act of 2016” on the California state ballot in November 2016. If the measure passes, the California state minimum wage would hit $15 by 2021.

Whether the path to $15 consists of local and regional victories, working with elected officials to move legislation on the state level, or getting citizens to approve a statewide ballot measure, Gary Jimenez of SEIU Local 1021 thinks the destination is not so remote.

“We can move a statewide measure whether we do it through public vote or whether the elected officials get on board,” Jimenez said. “People are on board with this. The average citizen knows that it’s the right thing to do.”

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Andrew Klein is a freelance print and radio journalist based in the San Francisco Bay Area. Follow him on Twitter: @ancklein.

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