Wages to rise despite crisis
Laws boosting minimum pay take effect today
The coronavirus pandemic has torn the economy down, but across the Bay Area, the hourly minimum wage is still going up.
Several cities are sticking with plans to raise the hourly wage floor Wednesday. Across much of the Bay Area, the local minimum wage is higher than California’s, which is going up in annual steps to $15 an hour by 2023.
Some business owners said the increases bite into their cash flow as they are still reeling from the economic effects of the pandemic. Others said it is the least of their worries in the face of plummeting sales.
“The central problem businesses are facing right now is they need more customers,” said David Cooper, a senior economic analyst with the nonprofit Economic Policy Institute in Washington.
Cooper said minimum wage increases can boost demand and funnel more money to lowerincome households. Those people “are very likely to spend those dollars right away,” which in turn could help the
businesses they frequent.
Some cities have nevertheless put the brakes on previously planned wage increases in an effort to spare businesses an added financial burden.
In April, the cities of Hayward and San Carlos postponed previously planned increases from July to January. Alameda, Santa Rosa and other cities voted down similar efforts to delay scheduled increases, however.
That is good news for Patricia Moreno of Santa Rosa, who has worked throughout the pandemic at Mary’s Pizza Shack.
“It’s been an extremely highpressure and highstakes time for me,” Moreno said, speaking in Spanish through a translator.
She said she began working fulltime despite the increased risk from the virus because her husband’s two jobs dried up. He has since gone back to work in recent weeks as a head line chef and in an industrial laundry.
Moreno said that while her hourly pay increased by only a dollar, that money will help pay for essentials like utility bills and for her daughter’s violin lessons, as well as assistance for her elderly parents.
In June, the Novato City Council narrowly voted down a proposal by Mayor Denise Athas to delay an increase of $1 per hour for businesses of varying sizes on July 1.
That will lead businesses to cut workers’ hours, according to Jeff Coplin, owner of Matt and Jeff’s Car Wash in Novato.
“We’ve eliminated over 1,000 hours a month of labor costs in order to try to avoid passing on the ridiculous expense that the city has seen fit to impose upon the businesses in Novato, rather than lay people off,” Coplin said.
Coplin said he has trimmed an hour off the time he is open each day, which means less pay and no overtime for the 30 to 45 employees on each shift.
“Even with that, we’re still taking a bite out of our rear end,” Coplin said, adding he will likely have to cut more hours in January when the minimum wage increases by another dollar an hour.
Restaurants often employ large numbers of minimum wage employees and typically feel the increases keenly. But with many eateries reduced to running takeout and delivery operations with a strippeddown staff, the blow of the hikes is blunted.
“Right now to be honest with you, it’s the least of my worries,” said Sharon Ardiana, who owns San Francisco restaurants Gialina, Ragazza and Ardiana.
Ardiana said that while her kitchens are still running, business is down significantly at each location. She had closed her restaurants for more than two months to ensure they could reopen safely during the pandemic.
Since food is available only togo at the restaurants, servers who would make the citymandated $16.07anhour minimum wage, plus tips, aren’t needed. She said backofhouse staff, like cooks and dishwashers, all make above minimum wage.
“Right now, it will affect me minimally,” Ardiana said of the July 1 increase. “Once we reopen, it definitely will.”
Many workers who will benefit from the wage hikes have continued working through the perils of the pandemic, including retail and grocery workers, as well as those in elder care, according to Professor Ken Jacobs, chairman of the UC Berkeley Center for Labor Research and Education.
“It’s very meaningful to the workers who are trying to get by in an economy where costs have gone up and they’re trying to survive in the Bay Area,” to say nothing of the challenges posed by the pandemic, Jacobs said of the increases.
Angelica Lua works as a housekeeper at a senior residential facility in Novato.
Speaking in Spanish through a translator, Lua said an increase in her pay will allow her to help two of her three children attend college.
“I always tell my children I am working hard so that they don’t have to suffer,” Lua said, adding she is from a small town in Mexico and had to leave high school before she could finish to find work.
The extra money is especially important now, Lua said, since her husband’s work as a gardener has largely disappeared during the pandemic.
Not all minimum wage workers in California can count on an increase in pay, said Mike Warren, a labor law expert at the McManis Faulkner law firm.
Gov. Gavin Newsom can delay the statewide increases if economic conditions don’t support them, Warren said.
“I do think opponents will raise the economics and ask that these increases be delayed,” Warren said.
Newsom has until Aug. 1 to delay increases set to take effect in the new year, Warren said. Those planned increases will see pay go to $13 an hour for workers at California companies with 25 employees or fewer and $14 an hour for companies employing more than 25 people. Those standards apply to employers in any Bay Area cities or counties without their own, higher minimums.