From today San Francisco will become the first U.S. city to offer minimum wage rate of more than $10 an hour. Exceeding from $9.92 to $10.24, the city’s new labor mandate hiked the city’s minimum wage more than $2 above the California minimum wage and nearly $3 more than the rate set by the federal government.
San Francisco is known for its love-it-or-hate-it, cutting-edge firsts, and this one’s no exception. Today it will be the first city in the nation where the minimum hourly wage will top $10.
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The lowest-wage workers will earn $10.24 an hour, up from the current rate of $9.92. Those 32 cents may not amount to much in one of the country’s costliest cities – but business owners say the increase represents yet another unfair burden imposed on them by City Hall, while workers say it’s essential.
“It’s definitely a psychological boost,” said David Frias, 34, who makes the minimum wage working at a movie theater. “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.”
Frias is a graduate of San Francisco State University who majored in broadcast and electronic communication arts and aspires to make documentary films. He also volunteers with the San Francisco Living Wage Coalition, which estimates there are 20,000 minimum-wage workers in San Francisco, most toiling in fast-food restaurants, as busboys and dishwashers in nicer restaurants, and as chain-store clerks, security guards and janitors.
2003 ballot measure
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.
Unlike the federal and state minimum wages ($7.25 and $8 an hour, respectively), San Francisco’s isn’t tied to political votes but to the previous year’s Consumer Price Index for urban workers in the San Francisco-Oakland-San Jose metropolitan area. When it went into effect in 2004, the city’s minimum wage was $8.50 – and it’s been steadily and predictably climbing ever since.
The coalition says even $10.24 isn’t enough to eke one’s way out of poverty in San Francisco – and pegs a livable wage in the city at more than $15 an hour for a single person and $36 an hour for a parent of one or two children.
For Frias, earning the minimum wage isn’t enough to afford rent for his own apartment – he still lives with his parents in a small Mission District unit.
The price of business
But for some employers, $10.24 an hour is just one more outsize burden of doing business in San Francisco. Add in City Hall’s mandates that employers pay a payroll tax of 1.5 percent, provide nine paid sick days and provide health care, and many employers are feeling squeezed.
In fact, the mandatory fee employers who don’t provide health insurance must pay to the city to support its universal health care program will also rise today. It will jump from $2.06 to $2.20 per hour per employee for businesses with more than 100 staff members and from $1.37 to $1.46 for businesses with 20 to 99 employees. Those with fewer than 20 employees aren’t required to pick up their health care tab.
That means the baseline cost of hiring a minimum-wage worker in a sizable San Francisco business will soon be $12.44 an hour plus the payroll tax and sick days.
“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.
Scherotter said that means the minimum wage increase benefits waiters, who often earn $70,000 a year with tips, and does nothing for the low-wage workers in the kitchen whom he already pays more than the minimum wage.
He said he recently cut his kitchen staff by eight workers and no longer makes pastries, gelato or salami in-house, thereby directing his money outside the city for those products.