David Frias, 34, works at a popular movie theatre in San Francisco. He is a graduate of San Francisco State University whose dream is to film documentaries in the future. Right now, he only makes minimum wage; which is pretty darn good, actually. Lucky for him, he just received a pay increase as the minimum wage increased from $9.92 per hour up to $10.24 an hour. That 32 cents extra is a “psychological boost,” according to Mr. Frias:
"I know I'm going to have a little extra money in my wallet. San Francisco is a model for low-wage workers - it's full respect, I guess."
Surely a psychological boost is just that. It sounds good and feels good, but the actual minimum wage increase won't really be able to do all that much to improve workers' lives.
While Mr. Frias may be delighted by the recent change, his employer – along with all other small businesses in the area – will suffer the consequences. An increased minimum wage simply means higher costs for business owners trying to build a successful business...
Frias also spends some of his time volunteering with the San Francisco Living Wage Coalition. According to their data, there are approxiamtely 19,999 other minimum wage workers right in the San Francisco vacinity. Job titles of these workers inlude fast food workers, janitors dishwashers at high-end restaurants, store clerks, and security guards.
The coalition was among the original backers of the 2003 ballot measure that created a citywide minimum wage in San Francisco, the nation's third city to adopt its own wage after Washington and Santa Fe, N.M.
Some small cities have followed suit, though several have a livable wage that applies only to businesses that contract with the city.
The coalition calls for a "living wage" when considering what the minimum wage should be.
living wage *Image courtesy of the San Francisco Living Wage Coalition.
Meanwhile, the federal minimum wage holds steady at $7.25 and the state minimum is at $8 an hour. In San Francisco, officials look to the previous year's Consumer Price Index for urband workers in order to dictate an appropriate minimum wage. In 2004, the calculated minimum wage was $8.50 per hour in San Francisco. It's been rising exponentially ever since...
Bottom line's rise by year, compiled by the San Francisco Office of Labor Standards Enforcement: 2004 $8.50 2005 $8.62 2006 $8.82 2007 $9.14 2008 $9.36 2009 $9.79 2010 $9.79 2011 $9.92 2012 $10.24
If you look around the country, minimum wage begins at half of San Francisco's rate; $5.15 an hour (Wyoming). On the East Coast, states offer about $7.25 an hour (Maryland, Virginia, Delaware, Pennsylvania, West Virginia, New York, North Carolina). It's about the same in the Midwest; slightly less in some areas. On the West Coast, wages are closer to the $8 range: $8.00 in California, $8.80 in Oregon and $9.04 in Washington.
Still, the coalition argues that the city would have to agree to pay minimum wage workers at least $15 per hour to bring a single individual out of poverty status. Moreover, an employer would have to offer an employee at least $36 per hour in order for a single parent with a child or two to survive above the poverty line.
It's simply not feasible to bring individuals out of poverty by increasing the minimum wage and hindering the growth of businesses with great potential; especially not when companies are forced to halt hiring based on absurd minimum wage rates.
Employers are angry with the $10.24 wage rate. And the entire community should be concerned too.
Keep in mind that the employers are required to provide nine paid sick days, provide health care (if there are over 20 employees), and pay a 1.5 percent payroll tax. These strict stipulations make it tough for them run a sustainable business and greatly hinders the possibility for development.
Therefore, this most recent pay increase as another burden of doing business in San Francisco. A couple extra dollars per shift won't make a big difference for the workers at all...but it will deeply impact the expenses of buisness owners.
"I hate it," Daniel Scherotter said of the city's highest-in-the-country minimum wage.
He's the chef and owner of Palio D'Asti, an Italian restaurant in the Financial District, and a previous president of the Golden Gate Restaurant Association.
Scherotter said the minimum wage is "plainly unjust" because California is one of a handful of states that prohibit a tip credit, meaning waiters earn the same minimum wage even though they receive tips.
Experts say this ultimately puts San Francisco at a competitive disadvantage. Employers are forced to cut staff, reduce the quality of food and products by doing so, and they're hiring less teenagers immigrants and ex convicts.
"Who the hell would hire a teenager for $12 an hour?" - Daniel Scherotter, chef and owner of Palio D'Asti, an Italian restaurant in the Financial District and former president of the Golden Gate Restaurant Associate
*Indented excerpts courtesy of the San Francisco Chronicle.