Title
Review and Comment on Minimum Wage Presentation
Body
Date: June 21, 2018
To: Members of the Mayor's Economic Development Advisory Panel
From: Lois RP Butler, Economic Development Manager
Re: Review and Comment on Minimum Wage Presentation
BACKGROUND
Income disparity-the gap between rich and poor-is growing in the United States. In the Bay Area, low-wage earners are at a further disadvantage because the cost of living in the Bay Area is higher than the national average.
In April 2016, the State of California adopted legislation (SB 3, Leno) to reach a statewide $15.00 per hour minimum wage by January 1, 2023. After 2023, the minimum wage will be adjusted annually for inflation (national Consumer Price Index, CPI), with a floor of zero percent and a ceiling of 3.5 percent.
Many Bay Area cities have enacted minimum wage ordinances with more aggressive timetables than the State's for reaching the $15 per hour level. In most of these local ordinances, once the $15 per hour level is reached, the minimum wage will continue to increase annually by the rate of the CPI. Hence, by reaching the $15 level sooner, and including the annual CPI adjustment, these jurisdictions will continually be above the State's minimum wage requirements.
Three Bay Area cities-Emeryville, Mountain View, and Sunnyvale-have already achieved a $15 minimum wage, and Berkeley's minimum wage will increase to $15 in October 2018. Large employers located in Emeryville will pay the highest rate in the region, which is currently $15.20 and expected to reach $15.60 in July 2018. By comparison, the City of Alameda's current minimum wage, which follows the State baseline standards, is $10.50 for small employers with 25 or fewer employees and $11 for those with over 25 employees (see Exhibit 1).
On April 17, 2018, the Alameda City Council directed staff to prepare a minimum wage ordinance to reach the $15 level before 2023. Staff plans to present a draft ordinance to the City C...
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