Last month, California's legislators almost passed a bill that would have increased the state's minimum wage by a dollar next year, and another dollar in 2016, bringing the minimum wage to $13 in 2017, and then pegging it to inflation thereafter. But the pay increase was shot down by business-friendly Democrats who said they support higher wages at the bottom, but that it was too much, too fast. So, for now, the battle to raise the minimum wage will be fought city by city in grueling matches pitting the financial power and influence of businesses against grassroots coalitions of low-wage workers, unions, and progressive activists.
That's the story here in the East Bay where Richmond and Berkeley have already passed their own minimum wage ordinances, and in Oakland, where a proposal to raise the minimum wage has already qualified for the November ballot. If passed, the measure would hike the minimum wage to $12.25 an hour in March 2015, with cost-of-living increases thereafter.
In Richmond and Berkeley, the initial push for a minimum wage increase began with calls for $15 an hour, applied to all workers. The business lobby, however, successfully pressured both city councils to shrink the actual wage increase, and to add loopholes that will leave many workers behind. Business owners realized that they couldn't outright stop the minimum wage from rising, because of the growing popularity of such proposals, but they ensured, nonetheless, that it would be a minimal increase in both cities, and they successfully delayed implementation.
In Oakland, a coalition of labor and community organizations calling itself Lift Up Oakland has eschewed City Hall (which has never chosen to take up the minimum wage on its own) and is bringing an ambitious proposal directly to the voters. If voters affirm Lift Up Oakland's proposition, the city's new $12.25 minimum wage will be the highest in the Bay Area, excepting only the $15 an hour that San Francisco is considering. Lift Up Oakland's ballot initiative also includes five to nine paid sick days annually for workers (depending on the size of the business), and includes rules to prevent wage theft, making the measure a unique package of laws that would benefit low-income workers and the entire city economy. And it would arrive smack in the middle of a crisis of affordability for Oakland's working-class residents as the price of housing skyrockets, and even longtime Oaklanders are being pushed out.
Needless to say, many Oakland business owners aren't happy about the possibility of having to pay more for the hard labor that makes the economy go 'round. But they can also feel which way the political wind is blowing, and it feels like it will sweep away anyone who outright opposes a higher minimum wage. The Oakland Metropolitan Chamber of Commerce is therefore leading an effort for a second minimum wage proposal, dubbed "The Oakland Sustainable & Fair Compensation Act of 2014."
The chamber's plan, which is also being called "13-in-3," would effectively delay implementation of a minimum wage increase for most workers for two years because it calls for a two-tiered system in which businesses with fewer than twenty employees wouldn't have to raise pay until 2017. In fact, the majority of minimum wage workers in Oakland work for businesses with fewer than twenty employees. Under the chamber's plan, most workers would see their wages rise by only a dollar a year beginning in 2017 and max out at $13 in 2019. The proposal also carves out particular categories of workers, allowing employers to pay them less than the minimum, according to a draft of measure obtained by the Express. It would exclude younger workers in summer training and internships, and exclude workers employed by companies whose funding comes from federal and state reimbursements. Finally, the chamber's plan calls for the use of tip credits or some other mechanism to allow restaurant owners to pay their tipped employees less than the minimum wage.
Opponents of Lift Up Oakland's faster and higher minimum wage increase say that it will stress the budgets of small businesses and nonprofits, which could lead them to lay off employees, thereby harming low-wage workers. Business leaders also believe a higher municipal minimum wage will put Oakland at a competitive disadvantage, and cause some employers to relocate outside the city where labor is cheaper.
But arguments like these don't have much support in the academic research on the minimum wage. Starting with groundbreaking studies by UC Berkeley and Princeton economists David Card and Alan Krueger in the early 1990s, economists have shown in numerous real world examples that when a city, county, or state's minimum wage goes up, unemployment doesn't spike, nor do businesses flee to neighboring areas with cheaper labor. In fact, the opposite often occurs. Card and Krueger studied the effects of a 20-percent minimum wage increase in New Jersey in 1992 by comparing employment at New Jersey fast food restaurants with other fast food restaurants just across the state line in Pennsylvania, where the minimum wage remained 80 cents lower. "Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 13 percent," wrote Card and Krueger.
In the Bay Area, UC Berkeley economists, including Michael Reich and Ken Jacobs, used San Francisco's minimum wage increase in 2004 and its paid sick days requirement in 2007 to examine how strong mandates like these impact the local economy. The Cal team found that San Francisco's minimum wage and other legislated benefits for low-income workers had little to no observable negative impact on employment levels, nor the location choices of businesses. What they did observe was $1.2 billion in additional wages paid to about 78,000 low-income workers over the past decade, and 59,000 workers gaining paid sick days. The benefits to San Francisco were clear enough that the Berkeley researchers titled their recent book on the subject When Mandates Work.
But the battle over the minimum wage is essentially a battle over the distribution of profits. For this simple reason it's always going to be a hotly contested political issue. It's already becoming one of the central issues of Oakland's mayoral campaign, and it could impact the political careers of city councilmembers depending on which side of the battle they stand.
So what's really at stake? How would the differences between Lift Up Oakland's ballot measure and the chamber's proposal affect Oakland's economy during the next five years? And what happens if voters decide to reject a minimum wage increase?
Oakland's current minimum wage is what the state mandates, $9 an hour as of July 1. That translates into a yearly income, before taxes, of $18,720. That's below the estimate of what a living wage is today in Oakland — about $25,000 a year, or roughly $12 an hour for a single person working 40 hours a week, 52 weeks a year. Lift Up Oakland's $12.25-an-hour proposal would set a floor for worker pay at slightly more than $25,000 a year, in addition to giving workers paid sick days, and it would bring the city to this wage level almost immediately.
So the difference between doing nothing, and voting for Lift Up Oakland's $12.25 minimum wage is an extra $6,700 a year in pre-tax income for every full-time minimum wage worker in Oakland. And thousands more workers who already make more than the minimum wage, but less than $12.25, would also see a significant boost in their take-home pay. Now, consider this in the aggregate. If Oakland voters raise the minimum wage to $12.25, over the next five years, the 27,000 Oakland workers who currently make the minimum wage will earn about $1 billion more in pay.
The chamber's plan — which, as of early this week, remained only an idea and not an actual legislative option — would not increase Oakland's minimum wage for most low-income workers until 2017. So that would be zero more dollars for low-income workers next year, and zero the year after. Then in 2017, the minimum wage would only rise by $1. It would increase by another dollar in 2018, and then again by another dollar in 2019, maxing out at $13.
By 2019, however, the minimum wage under Lift Up Oakland's proposal would be approximately $13.50 because it's pegged to inflation. In a nutshell, the chamber's proposal increases the minimum wage less, takes years to do so, and provides no wage increase at all for the next two years for most workers. In dollar terms, the chamber's proposal would deliver about a half-billion less in pay to Oakland's 27,000 minimum wage workers over the next five years.
But enough with the numbers. There are tens of thousands of human stories behind the battle for a minimum wage in Oakland. Here's one.
Eastmont Mall used to be an automobile factory, a Chevrolet plant," John Jones explained to me as we waited for coffee at Starbucks in downtown Oakland. "It kind of symbolizes the shift in our economy, locally and nationally."
Born and raised in Oakland, Jones didn't go to college, but he talks like a professor, explaining complicated problems in precise language, citing all kinds of facts and figures, and then weaving them into stories. "That car factory closed down decades ago and they built a shopping mall on it," he said. "Durant Avenue, nearby, is named after the founder of Chevrolet. In fact, a lot of Oakland shopping malls are built where factories used to be, so now we went from having all these higher-paying jobs in manufacturing, to having fewer jobs in lower-paying service work."
That's a good summary of the last forty years of Oakland's economic history. Solid middle-class work disappeared for the bottom half of the city's workers and was replaced by service jobs, many in retail and restaurants. Factories moved to China and Mexico where labor conditions and pay resemble a pre-1930s United States, without unions. The Port of Oakland grew to bring foreign goods to market, but automation has meant that jobs in logistics are too few to employ all the displaced workers. And while the number of high-paying jobs in law, tech, finance, and healthcare have grown, the number of service jobs has grown even more, and their wages stagnated, creating a starkly divided society.
"They used to call us the Detroit of the West," said Jones, "because we had all these factories and all these good middle-class jobs." While he knows we can't turn back the clock on global economic and technological transformations, Jones wonders how we can remake the rules of our economy to re-establish, and expand, the kind of social contract that existed during the era when Oakland was a manufacturing center, back when calling a place another "Detroit" meant that it was filled with prosperity and opportunity, not strapped with debt and smothered by unemployment. In 1960, auto workers such as those working in Oakland's Chevrolet plant earned approximately $19.40 an hour in current dollars, according to the US Census, or about $40,000 a year. It was a solid middle-class wage. Chevrolet abandoned its Oakland operation in 1963 and the factory was torn down. The Eastmont Town Center mall opened in its place in 1970. This was the beginning of the first decade of declines in real wages for the average American worker. Today, Eastmont Town Center leases storefronts to retail stores and restaurants, many of which pay their employees minimum wage, and also to county antipoverty programs, to which low-wage workers resort in order to survive.
Jones grew up frustrated and impatient with school, and like many Oakland youth, found himself in trouble at an early age. A lot of Oakland's youngsters don't see much of a future for themselves, he said. At least they don't envision a future in which they're respected by society, and can earn a decent living. A few years ago, Jones straightened out his life, started getting involved with his church, the Center Street Mission Baptist Church in West Oakland, and began volunteering with Oakland Community Organizations, a federation of churches that works on social and economic issues. He talks about his children a lot; he wants to raise them in a better world with opportunities he never had.
Jones currently works as a security guard at the Burger King on Broadway and 13th Street in downtown, and every day he sees reasons why the minimum wage should be lifted, and other improvements for low-income workers should be implemented. "I was about to clock out one night," he recalled, "when I noticed one of my co-workers looking disoriented, her eyes rolled in the back of her head, and she was swaying on her feet, about to collapse." Jones rushed across the counter and held her up just before she lost consciousness. "She's twenty years old, pregnant, she has cellphone bills, a car, she has to help pay rent at her mom's house. She can't afford to take a day off work with the wage being so low, but she could have cracked her head open on the hard floor in there."
Making $10 an hour, Jones constantly thinks about the tradeoffs he has to make in order to pay his bills. "My PG&E got cut off a few days ago. I don't have enough income to rent my son a violin so he can learn how to play music. Do I sacrifice my child's development to pay other bills?" he asked, as a worried expression wrinkled across his forehead.
Back in professor mode, Jones elaborated on how he believes increasing Oakland's minimum wage is the single most efficient way to stimulate the local economy, create employment, reduce crime, and address other social ills. "Let's be honest, poor people don't save money. We can't afford to. If we increase the minimum wage by a few bucks it's not like all these workers are going to sock that money away in the bank, or under their mattresses. They're not going to go buy mansions in the hills. No, they're going to spend it," said Jones. "And they're going to spend it at local businesses here in Oakland."
"That's $120 million that will be pumped into the local economy," said Jones, citing a UC Berkeley estimate of the total amount of additional yearly earnings that low-income Oaklanders would receive if the minimum wage goes up to $12.25.
Ultimately though, upping the minimum wage is about dignity for workers, said Jones. "The time has come for the American people to stop being exploited. At a minimum, we deserve some type of respect as human beings, and this respect is reflected in what we're paid."
Restaurant owners have emerged as some of the most vocal opponents of raising the minimum wage immediately to $12.25. "I don't have a problem with the increase of the minimum wage," said Chris Pastena, the owner of Chop Bar, one of the Jack London district eateries that has given Oakland a reputation as a food mecca in recent years. "But what does make this difficult is the amount of the increase all at once.
"A slower burn-off makes it easier for a small business to survive," Pastena continued, referring to the idea of raising the minimum wage slowly over several years.
Pastena said Lift Up Oakland's proposal would have a complicated impact on his business. "All of my non-tipped employees make over a $12.53 wage already, so this doesn't directly affect them; it's really the tipped employees who this will be the most difficult for," he said. Chop Bar's tipped employees make minimum wage, so their wages would increase, but Pastena thinks that their total take-home pay could actually drop as customers tip less after prices rise to pay for the wage hikes.
"If we raise prices, the tips might go down and the employees keep less of that," he said. "With the wage increase, it doesn't necessarily give them that much more money in their pocket."
"I am in favor of [increasing] the minimum wage," said Michael LeBlanc, owner of Picán, an upscale restaurant in Oakland's Uptown district. But LeBlanc believes $12.25 is too much. At a recent city council meeting, he told Oakland's elected officials to go slowly and study the impacts an increase might have. Last month, he told CBS News that Lift Up Oakland's proposed $12.25 increase is a mistake. "That's a 50-percent increase," he said (at the time, the minimum wage in Oakland was $8 an hour). "You don't have to be a mathematical genius to know that a 50-percent increase in a particular short period of time can have a significant impact."
Van Nguyen, the coordinator of ROC the Bay, an organization that works to improve pay and conditions for restaurant workers, said tipped workers are too often singled out in minimum wage debates — and that not all of them work at upscale restaurants that generate good tips. "Tipped workers are generally at minimum wage, but tips vary depending on season, types of customers, and so forth," he noted. "Bureau of Labor Statistics data shows that, in Alameda County, $9.02 is the average wage for tipped restaurant workers," said Nguyen. "Having a fair base wage is important. We can't depend on the generosity of customers to subsidize restaurants."
Restaurant owners, however, are not the only ones opposed to Lift Up Oakland's ballot measure, although some business owners are nonetheless sympathetic to the cause. "The business community has fought this so often that now the activists have got together and are pushing it," said Kevin Rath, the CEO of Manos Home Care, a company that provides in-home services for developmentally disabled children and adults. Rath supports increasing the minimum wage, but the Lift Up Oakland measure is too much, too fast for him as well.
"I don't want my workers to be second-class citizens. I want them to make good money," he said. "But if [Manos Home Care] gets paid $13 an hour by the state to deliver services to developmentally disabled children, and Oakland is going to raise it to $12.25, how do I make ends meet?"
Rath's business relies on reimbursements from the state to pay his employees, and the state's reimbursement rates are set yearly. "We're going to go to the state immediately to ask for more money, but I don't want to hold my breath for the state," said Rath.
Some Oakland nonprofit executives are also opposed to a minimum wage increase of the proportions Lift Up Oakland is calling for. C.J. Hirschfield, the executive director of Children's Fairyland, spoke before a chamber of commerce meeting in May and raised objections to the Lift Up Oakland measure. "My only concern is that not many local nonprofits (of which there are many in Oakland) seem to have weighed in on the issue," Hirschfield wrote in an email to me. Many Oakland nonprofits pay their employees the current minimum wage, and because they fundraise and budget on a yearly basis, an increase to $12.25 would strain their resources.
Another nonprofit executive skeptical of the Lift Up Oakland plan is also a member of the city council: District 3's Lynette Gibson McElhaney. McElhaney runs East Bay Neighborhood Housing Services, a policy organization that advocates for affordable housing and conducts financial literacy workshops for low-income workers. But even though her nonprofit works to help low-income families, she has staked out a position that appears to be opposed to lifting the minimum wage.
At an April 29 meeting of the council's Community and Economic Development Committee, McElhaney wondered aloud whether there would be "unintended consequences" for Oakland workers with a higher city minimum wage, and proceeded to question a member of the Lift Up Coalition about how the measure could cause unemployment among low-wage workers. At a meeting organized by Lift Up Oakland last month to discuss findings of a UC Berkeley study looking at the economic impact of raising Oakland's minimum wage, McElhaney questioned whether a $12.25 increase would lead employers to lay off workers in order save money. She also said a minimum wage might negatively impact "mom-and-pop shops" more than it would larger employers.
Casey Farmer, a policy analyst for McElhaney, said she has been contacted by small-business owners, particularly non-white shop owners, who worry that a $12.25 minimum wage will harm them.
But according to UC Berkeley economist Sylvia Allegretto, fears that an increased minimum wage will cause small businesses and restaurants to close are more fiction than fact. "They're doing their job trying to convince us this is going to ruin the restaurant industry," Allegretto said about minimum wage opponents, "but why is the restaurant industry booming, especially in the Bay Area, and especially in San Francisco, where the wages are even higher, and they have healthcare mandates?"
Allegretto added that increasing the minimum wage to as much as $12.25 isn't as drastic a leap as many business owners make it out to be. "At the state level, they said that this is a big increase from $8 to $9 overnight," she said, referring to restaurant opposition to the recently instituted state minimum-wage increase. "But we're going from an $8 minimum that was instituted in 2008 to $9." Spread over seven years without a minimum wage increase at the state level to keep up with the constant rising costs of gas, rent, food, and other basic necessities, $8 to $9 actually only adds up to a real increase of 16 cents in current value.
"They only count the increases when they happen, but nothing happened for six years," Allegretto continued. "Restaurants pay more for beef and napkins every year, and they have to deal with this all the time and they don't really complain, but for some reason they do when the price of labor might go up."
To bolster the chances of their minimum wage ballot initiative, the Lift Up Oakland coalition has pointed to a study released last month by UC Berkeley's Institute for Research on Labor and Employment. The Berkeley study looked specifically at the Lift Up Oakland proposal and concluded that between one-quarter and one-third of all Oakland workers would see their wages rise if the ballot measure passes. These 48,000 or so workers, 96 percent of whom are over the age of twenty, would get an average raise of $1.69 an hour. The Berkeley researchers also noted that the Lift Up Oakland initiative would increase the minimum wage by about the same amount most other local wage initiatives have. In other words, Lift Up Oakland's plan is roughly in line with similar wage hikes in San Francisco, San Jose, Albuquerque, and Washington, DC.
Back in April, as the Lift Up Oakland ballot initiative began to gain steam, city staff commissioned another study on the possibility of increasing Oakland's minimum wage. The city administrator's office hired Linda Hausrath of Hausrath Economics Group, an Oakland-based consultancy, to prepare an official analysis. The Hausrath study, released earlier this month, described various ways that raising the minimum wage would benefit Oakland's economy, but it also focused on the specific concerns raised by the chamber of commerce and other opponents of Lift Up Oakland's plan. The Hausrath report speculated that if the minimum wage were increased to $12.25 next year, "hours and/or jobs would be reduced in some cases, business expansion plans would be put on hold," and that the "higher costs of doing business relative to nearby cities with a lower minimum wage could affect business location decisions and affect Oakland's competitive ability to retain and attract investment." The Hausrath report therefore recommended a plan very similar to the chamber's proposal, one that slowly phases in any wage increase, keeps the minimum wage at a lower value than Lift Up Oakland, and leaves many workers out.
Linda Hausrath and the Hausrath Economics Group are paying members of the chamber, according to a membership list maintained on the chamber's website.
Oakland Councilmember Larry Reid sponsored the first attempt to eclipse the Lift Up Oakland initiative with something more business-friendly. Earlier this year, before Lift Up Oakland coalition members had finished gathering enough signatures to place their proposition on the ballot, Reid proposed an ordinance to increase Oakland's minimum wage to $9 an hour in 2015. He later revised his proposal to raise Oakland's minimum wage to $10.20 by 2016.
At the April 29 meeting of the city council's Community and Economic Development Committee, where Reid's proposal was first discussed, some members of the public denounced it as an effort to sabotage Lift Up Oakland. "There's already a national movement for a $15 minimum wage," said David Colburn, a District 2 resident. "People think $12.25 is maybe more viable. That is a compromise already. To undercut that with a proposal for a $10.20 minimum wage I think is sort of grotesque."
Nikki Fortunato Bas, the executive director of East Bay Alliance for a Sustainable Economy (EBASE), and one of the signatories on the Lift Up Oakland petition, invited councilmembers who hadn't already done so to endorse the ballot initiative for $12.25, but implored them also to "not derail these needed reforms."
"We went through a really democratic process with this measure," explained Bas in an interview. "Lift up Oakland is 45 organizations that represent tens of thousands of workers. We had a team of over 250 volunteers talking to over 33,000 members of the community to get this on the ballot.
Reid's $10.20 proposal hasn't advanced since then, but the chamber's plan could gain traction if enough councilmembers and the mayor drop support for Lift Up Oakland and join the business groups. The first version of the chamber's plan called for splitting employees into categories: those employed by large businesses, defined as having fifty or more employees, and those employed by businesses with fewer than fifty employees. Large and small businesses would pay different minimum wages, and their phase-in periods would also be different. The most recent version of the chamber's plan redefines a small business as having fewer than twenty employees. The chamber also recently added three to five paid sick days to its plan, again depending on the size of the employer.
In a June 12 email to Mayor Jean Quan and Councilmembers McElhaney and Pat Kernighan, Gregory McConnell, an Oakland lobbyist who represents major employers and real estate companies, requested their support for the business-backed plan. He also got his facts wrong about the competing proposals, claiming that "our approach actually raises the rate to a higher level than Lift Up Oakland has asked for," when, in fact, it doesn't for most low-wage workers.
"We are asking Councilmember Lynette Gibson-McElhaney to introduce our Sustainable Minimum Wage as priority legislation and we urge you to join us to show broad support," concluded McConnell.
Farmer, McElhaney's policy analyst, confirmed that the councilmember has reservations about the minimum wage increase and worker protections proposed by Lift Up Oakland. However, McElhaney's attention has been focused on other issues like renewing Measure Y, the city's public safety parcel tax, Farmer said. In response to a question about whether McElhaney was planning to sponsor the chamber's minimum wage plan Farmer said, "we don't think it would be helpful if there were two ballot initiatives. That would just confuse voters."
Four members of the city council — Dan Kalb, Libby Schaaf, Desley Brooks, and Noel Gallo — have formally endorsed the Lift Up Oakland ballot initiative, as has Quan.
Schaaf, who is challenging Quan for the mayor's office this year, has made her support for Lift Up Oakland part of her mayoral campaign. Schaaf said during one recent committee meeting that her firsthand experiences with low-paying jobs is a reason she is "going to work very hard" to help pass Lift Up Oakland's initiative. "I have waited a lot of tables in the city of Oakland as a minimum-wage worker," she said. "As a waitress, relying on your tip income is really frightening because sometimes you have good nights and some nights you don't."
Quan's stance on the minimum wage, by contrast, is ambiguous. Although she endorsed Lift Up Oakland, and her name appears among a list of supporters on the coalition's website, Quan, in her own email newsletter, inaccurately described the Lift Up Oakland proposal, saying she supported it because it would include "exemptions for small businesses," and "would be phased in over the next few years," neither of which are accurate. A representative of Lift Up Oakland said Quan endorsed the initiative by signing a copy of it, leaving little room for misunderstanding.
Quan also recently voiced support for a regional proposal put forward by Berkeley Mayor Tom Bates that would raise the minimum wage by less than Lift Up Oakland's plan, and would do this much more slowly, over three years. Bates' proposal also leaves out the paid sick days in the Lift Up Oakland plan. After a city council meeting last week, the mayor told me that she still supports the Lift Up Oakland initiative. "But if someone proposes something better we'd have to look at that," she said. "What the chamber is proposing now goes to $13, which is higher than Lift Up Oakland," Quan said, repeating McConnell's misstatement. "And theirs also phases in, so it's more like what the other cities have been doing." As previously noted, the Lift Up Oakland initiative does not phase in its wage increase.
Another contender in the mayor's race, Dan Siegel, not only supports Lift Up Oakland's ballot initiative, but was also part of the movement calling for a minimum wage increase of up to $15 an hour. "I think there's this feeling that we're living a tale of two cities here, and it's just getting worse," he said. "I support increasing the minimum wage as a necessary step to start dealing with the incredible income inequality that has developed in this country." Siegel said $12.25 is a start, and that higher wages for Oaklanders will help address problems beyond just income inequality, including crime, health, and education. "If you're thinking about the social value of raising the minimum wage, one thing we want to do is convince people that they have a future," he said.
As to the possibility that the city council might place the chamber's minimum wage initiative on the ballot to compete with Lift Up Oakland's proposal, Siegel said, "what's going on in Oakland is there's people in this mayor's race who want to be all things to all people. They want the benefit of the progressive surge in favor of the minimum wage, but don't want to upset the developers and chamber of commerce, so they wind up saying contradictory things."
Schaaf has been pretty consistent so far. She is opposed to the kinds of exemptions and exceptions that Quan has voiced support for, and that are written into the chamber's proposal. "I have an issue with different companies having a different minimum wage. I just think that's wrong," Schaaf said about a two-tiered plan. "The value of someone's labor is the value of their labor.
"I am worried about carve-outs," she continued. "I think a person's labor has value, and when you start creating carve-outs that sends the wrong message."
Recent mayoral race entrant Councilmember Rebecca Kaplan hasn't formally endorsed the Lift Up Oakland proposal or any other plan. In an email, Kaplan's spokesperson Jason Overman said Kaplan supports the Lift Up Oakland initiative, and that their office hasn't even seen a copy of the chamber's proposal.
"I do not think it's a good idea to put a competing measure on the ballot," said Kalb, who sits on the Rules and Legislation Committee and therefore partly determines whether a business-backed minimum wage plan will advance. "It's an invitation for a massive, expensive, confusing campaign, and the risk is that neither would pass. That would be the worst possible outcome as far as I'm concerned. We have a lot of people who gave signatures on the Lift Up Oakland proposition, so let's give voters a chance."
Historically, workers at the bottom of America's labor market have only gotten a raise when they fought for it, and since the first minimum wage laws were passed — in 1916 in California and 1938 for the entire United States — the pay floor required by law has proven to be a key way to reduce the growth of income inequality and ensure a minimum of dignity for those who do the hardest, most thankless labor. During the 1980s, the federal minimum wage was allowed to erode for an entire decade, dropping from a current dollar value of $8.95 in 1980 to $6.92 in 1990, because of inflation. The Clinton years barely improved the minimum wage, and George W. Bush's two terms replayed the Reagan era. Presidential and Congressional inaction caused the federal minimum wage to float downward from a current value of $7.63 in 1997 to $6.08 in 2006. In 2009, Congress raised the minimum to $7.25, but it has declined in real value since then.
California's minimum wage hasn't been that much better for low-income workers. In 1980, its current value was $8.95, and today it's $9. In other words, California's floor for pay has hovered below the actual cost of living for decades.
The opposite is true for those at the top of the economy. Oakland's corporations and even many nonprofits have boosted executive pay by multiples over the past two decades. Oakland-headquartered Clorox, for example, paid its CEO Donald Knauss $10.7 million last year, equivalent to a $5,000 an hour wage. Pandora Media, the streaming music company, paid it's CEO Brian McAndrews $29 million last year, which is about the same as the total pay of 1,500 minimum-wage workers in Oakland. Hirschfield, of Children's Fairyland, got a combined 15-percent salary increase in 2012 and 2013, bringing her annual paycheck to $128,000, about seven times higher than a minimum wage worker's income. The Oakland Metropolitan Chamber of Commerce's last disclosed pay package for it's previous CEO, Joseph Haraburda was $165,000. University of California President Janet Napolitano's taxpayer-funded annual car allowance of $8,900 is equal to half the total annual income of the minimum wage workers who serve up food in the cafe located on the ground floor of UC's Franklin Street headquarters in downtown Oakland.
When Oakland officials talk about economic development, they often think about jobs that can be created through the use of city land and assets like the Port of Oakland. One of the developers of the much-touted Port of Oakland Army Base redevelopment project, Prologis, gave its CEO, Hamid Moghadam, a 223 percent raise in 2012 and 2013, bringing his pay up to $15 million a year.
Minimum wage worker John Jones survives on one-tenth of one percent of what Moghadam is paid. "I got involved in the minimum wage movement first by working to make sure the Port of Oakland Army Base project includes living wage jobs," Jones explained. He said the coalition of groups organizing to ensure that jobs at the port's new logistics center pay a living wage has made progress. He thinks Lift Up Oakland's minimum wage increase to $12.25 will be another significant step in the right direction for the city's economy.
"But this is just a first step," said Jones. "We don't stop at $12.25. We need to do more."
Clarification: The original version of this report stated that Children’s Fairyland Executive Director C.J. Hirschfield spoke in opposition to raising the minimum wage at a recent chamber of commerce meeting concerning the Lift Up Oakland ballot measure, which would increase the minimum wage to $12.25 an hour for all workers in Oakland in March 2015. After the story was published, Hirschfield said she had only raised objections to the Lift Up Oakland measure at the meeting. She then repeatedly declined to state whether she opposes or supports the measure.
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