Minimum-Wage Hike Opponents Say Increase Hurts Business

Share This Article:

In advance of a planned rally in support of an increase in the minimum wage, a pair of San Diego organizations released a study Thursday finding that such an increase would hurt small businesses and provide only minimal benefits for people living in poverty. The report released by the San Diego County Taxpayers Association and San Diego Regional Chamber of Commerce cited business owners who said they would have to raise prices or reduce health benefits to cover the additional payroll expenses.

Support Times of San Diego's growth
with a small monthly contribution

San Diego City Council is considering raising the minimum wage to $13 an hour. Photo credit: Alexander Nguyen

“The proposal to create a higher minimum wage in the city of San Diego — by significantly increasing the rate over the $10 an hour already adopted by the state of California — puts San Diego at a competitive and economic disadvantage and hurts the very workers the proponents are purporting to help,” said chamber CEO Jerry Sanders.

A report by the Center on Policy Initiatives that was released earlier this year settled on $13.09 an hour as the amount of pay needed for one person to live in San Diego on a no-frills budget without government assistance.

According to the SDCTA, however, the CPI study assumed that everyone would live in a one-bedroom apartment. Renting a studio unit or sharing a two- bedroom apartment would lower the CPI number to $10.89 to $12.76 an hour, depending on location, according to the SDCTA study.

The SDCTA study found that most minimum wage earners don’t live in low- income households. The report called for a multi-pronged approach to reducing poverty, including ending chronic homelessness, focusing on education and workforce development and establishing a state earned-income tax credit.

On the other side of the argument, supporters who contend that workers at the state minimum of $8 an hour can’t make ends meet in San Diego plan to rally at 6:30 p.m. Thursday at the First Unitarian Universalist Church on Front Street in Hillcrest to state their case in favor of an increase.

Clare Crawford, the CPI executive director, said the taxpayers association report was “riddled with inconsistencies and assertions that are not backed by data.” She said the real needs of hundreds of thousands of hard- working San Diegans were ignored.

“The business lobby always claims higher wages will cause disaster, and in fact the opposite occurs,” Crawford said. “Multiple studies have shown that minimum wage increases boost the economy.”

Widgets Magazine

She said that within one year of the city of San Jose raising its minimum wage, 9,000 new businesses were started and 4,000 people were hired in the hospitality industry, which usually offers lower pay.

On Friday, supporters of the minimum wage increase plan to present business owners who support the proposal.

The developments come less than a week before a City Council committee is scheduled to take up council President Todd Gloria’s proposal to raise the minimum wage in San Diego incrementally to $13.09 an hour. His plan also calls for employees to earn five paid sick days a year so they don’t have to show up to work while ill.

The state minimum wage is set to climb to $9 an hour next month and by another buck in two years.

The plan by Gloria and other City Council supporters is to place the proposed minimum wage increase on November’s election ballot.

However, members of the Economic Development and Intergovernmental Relations Committee asked staff to study whether the City Council could adopt the new pay levels without going to a public vote.

City News Service

Follow Us: