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Tuesday, July 19, 2016

San Leandro City Council rolls back minimum wage carveouts for small biz; approves original $15 wage by 2020

SAN LEANDRO CITY COUNCIL | The San Leandro City Council reaffirmed its goal of raising the minimum wage to $15 an hour by 2020 Monday night, but in a reversal, removed a previously approved one-year exemption for small businesses.

The council voted, 6-1, to adopt the original proposal that begins to raise the city’s minimum wage to $12 an hour beginning in July 2017 regardless of the number of workers the company employs. The wage then increases $1 a year before topping out at $15 in 2020—18 months before the state’s minimum wage reaches the same amount in 2022.

Councilmember Jim Prola and others had pushed for the city to make no distinction between the sizes of businesses at a July 5 meeting. Doing so, said Prola, ran the risk of complicating the ordinance. However, a substitute motion by Mayor Pauline Cutter added a carveout allowing businesses with 25 or fewer employees to reach $15 an hour by 2021--a full year later than larger businesses. Monday night’s meeting was intended to be the first reading of the ordinance before Prola motioned for his own substitute motion.

Councilmember Benny Lee was the lone vote in opposition. He feared the minimum wage increases would hinder minority-owned small businesses.

Similar to two weeks ago, several councilmembers voiced passionate pleas for helping the city’s poor and low-wage earners. This time a public comment in opposition of raising the minimum wage appeared to set off some members of the council. “What’s the rush?” said San Leandro insurance agent Jerry Garcia, who is also the incoming president of the San Leandro Chamber of Commerce.

“What’s the rush?” Councilmember Lee Thomas later responded. “It’s a rush to live.”

Prola also used Garcia’s question for rhetorical effect. He argued low-wage workers with more money in their pockets will translate into higher profits for small businesses. Studies show the reason small businesses close has nothing to do with paying a higher minimum wage, said Prola. “It has everything to do with not enough people coming through the door.”

Since the motion approved by Prola constitutes a “substantive change” to the minimum wage ordinance, said City Attorney Richard Pio Roda, a first reading is again required. However, since the San Leandro City Council, like other local jurisdictions, observes a month-long recess in August, the item will not be heard until September. The delay, Pio Roda added, will have no effect on the ordinance’s timetable for beginning the incremental minimum wage increases due to begin next summer.

5 comments :

By MW:

As the minimum wage continues to rapidly rise, the number of min wage jobs, and therefore entry level positions into the job market for those in their teens and early twenties, will drastically fall.

For example, businesses will counter the need for staffing in certain positions by rapidly increasing the number of self service checkouts, and therefore drastically lessening the need for cashiers, and restaurants will decrease the number of employees, and including by making restaurants much more self service.

Or think of the extreme lack of staffing in the typical department store today compared to a few decades ago. A few decades ago many large stores, and especially department stores, had tons of employees walking the floor so as to help and assist customers. Nowadays in many large stores, and especially department stores, if you fainted and collapsed in the middle of the floor, it is not that much of an exaggeration to say they might not notice your prone body in the middle of the floor until the janitors came in to do their once a week cleaning.

And a huge number of jobs that previously were performed by employees based in the US, and such as telephone customer service provided by large corporations, and to give just one example, are already now being done by much lower paid employees located overseas.

And as bad as the present situation is, it will get many times worse if the phonies and demagogues who pretend to be "liberals" continue their non-stop efforts to "improve" things.

Increasing the minimum wage in San Leandro by 20% next year up to 50% in the next 4 years is bad for those who live in San Leandro. Even Jerry Brown has misgivings about the size and rapidity of California’s minimum wage increase. A small restaurant with six full-time employees will experience a $32,448 increase in costs to do business in 2017 and by 2020 it will be $81,200 a year. I’m sorry City Council but that won’t fly. I suppose before you made this hasty decision you went and talked to business owners and laid out the implications. What did they say, “Oh thank you benevolent city council representative may I have another?” I spoke to two councilmembers the day of the July 5th meeting and both said they didn’t think they had enough information to make an informed decision on this ordinance nor did they understand the rush, yet they voted for it anyway. They were totally intimidated by the presence of the labor lynch mob and they caved under the pressure. In my opinion they abdicated their fiduciary duty to the citizens of the city they swore to serve by playing politics with this very impactful decision.

Here is who will be hurt:

Senior citizens on a fixed income who will experience higher costs for their everyday expenses like food, clothing, car repairs, home maintenance, medicine, recreation, home care, adult day care, medical devices, and transportation. Don’t they also deserve not to live in poverty?

Working age youth between the ages of 16 to 24 are going to have a hard time getting entry level, part-time jobs because higher labor costs will produce an accelerated use of automation and increased competition for jobs as businesses cut back on hiring or move out of the area.

Ethnic businesses owned by Asians and Hispanics who typically hire minimum wage employees and offer low-priced goods and services will be forced to raise prices or go out of business. Arlene Lum, president of the Asian Business Council and Councilmember Bennie Lee, both very much in touch with these markets, told of how businesses in Oakland and San Francisco are closing, hiring less, raising prices and contemplating moving out of the area because of unreasonable minimum wage ordinances. I was appalled when Jim Prola totally dismissed their concerns by referencing biased research stating businesses thrived by having to pay 50% higher wages.

Low-skilled, undereducated workers will be hurt.

Globalization has destroyed low-skilled, high paying jobs in our country. Online retail, offshoring customer support and automation - all the result of the high cost of doing business - is lowering wages and job prospects for the unskilled. We are living in a time very akin to the 1920’s and 30’s when the transition to an industrial society and rapid changes in technology caused massive unemployment for those without education and skills. The raising of minimum wages in the 30’s only exacerbated the unemployment problems and slowed the recovery.

My advice to the San Leandro City Council is stop pandering to organized labor and kill this misguided minimum wage ordinance. Higher wages should be earned and not an entitlement. California has already made the move. Think about creating training programs and attracting more businesses. Work with the schools to improve curriculums, improve the infrastructure and enhance police and fire services. Build it and the high paying jobs will come.

People need a higher minimum wage just to be able to put food on the table and to pay their rent, which is going up rapidly and forcing people to live in their cars or on the street. Good for the San Leandro City Council.

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