Under the ordinance, San Diego’s minimum hourly wage will rise to $9.75 in January of 2015, $10.50 in January of 2016 and $11.50 in January of 2017. Further increases tied to the local Consumer Price Index would begin in January 2019. The city joins several others across the nation, including San Jose and Seattle, in establishing higher local minimum wages than those at state and federal levels. San Diego is the largest city by population in the country to make such a move.
California’s minimum wage rose from $8 an hour to $9 on July 1 and is scheduled to become $10 in January 2016. The federal minimum wage is $7.25 an hour.
The $11.50 is the same hike in effect in Washington, D.C.; less than the $15 an hour adopted by Seattle and proposed in San Francisco; and more than the $10.10 adopted by Hawaii, Connecticut and Maryland.
The ordinance requires employers to award full-time workers five days' sick leave per year beginning in January. Part-time workers would earn prorated sick leave based on the number of hours they work.
The council’s decision to opt for an ordinance instead of a ballot measure was criticized, as business groups said a vote on an issue with such impact would have been more appropriate. The six votes in favor of the ordinance means the legislation isn’t vulnerable to a veto by Mayor Kevin Faulconer because two-thirds of the council supports it.
“This is a reasonable, common-sense proposal that maintains tremendous benefits for our workers and our local economy while greatly reducing the potential impacts on businesses,” said City Council President Todd Gloria, a Democrat who retreated from a previous proposal to hike the local minimum wage to $13.09 an hour.
Opponents, including the council’s three Republicans, say raising the minimum wage will force small businesses to increase prices, lay off workers, search for greater automation and possibly shut down or leave San Diego. It will also accelerate inflation, they said.
The initiative will result in raises for at least 172,000 and perhaps as many as 214,000 San Diegans, according to an analysis from the Center on Wage and Employment Dynamics at UC, Berkeley.
On average, the raises will add $1,400 a year to the paychecks of employees now making minimum wage or slightly above it. All together, that will put an additional $260 million a year into the pockets of low-income San Diegans, the center said.
The Center on Wage and Employment Dynamics, which specializes in estimating the impacts of local and state wage proposals, detailed additional impacts of the San Diego measure:
An estimated 60 percent of people working in food services locally will get a raise by January 1, 2017, a larger proportion than in any other industry. In sheer numbers, the retail trade industry will account for the most raises.
Half of everyone working part-time (less than 35 hours a week) will get a raise.
Only 5 percent of those getting a raise will be teenagers; 85 percent will be between ages 20 and 55.