The minimum wage will be back on May 6, with the latest proposal to raise it from the current state minimum of $9.00/hour (effective July 1, 2014) and $10.00/hour (effective January 1, 2016) to a stepped level of $12.30 in 2017 and indexed by the CPI thereafter.

The table below shows the Richmond proposal compared to the state level, a proposal before the Berkeley City Council, and a proposed ballot measure in Oakland.

Here is what Mayor Tom Bates wrote about the Berkeley proposal:

Dear Elected Official,

I would like to update you on the status of the Regional Minimum Wage proposal I recently submitted for your consideration.

On May 1, 2014, the Berkeley City Council held a special session to discuss increasing the minimum wage in Berkeley.  At the meeting Councilmember Laurie Capitelli submitted a plan, building upon my original proposal, that would not only establish a regional minimum wage but also gradually increase it over time to a regional Living Wage. 

His proposal is built around my original premise of aligning with the $12.25 per hour of the proposed City of Oakland Initiative as expeditiously as possible.  His proposal then takes the additional step of aligning with the City of Berkeley’s current living wage ordinance in a gradual way. A chart illustrating his plan is attached.

The Berkeley City Council will be considering a first reading of an ordinance adopting Councilmember Capitelli’s plan on May 6, 2014.    

I hope you will consider his proposal as your own discussions move forward. 

If you have any questions, please feel free to contact me.
  
Thank you,
Tom Bates

Back in March, I polled E-FORUM readers, and the largest percentage said they favored a Richmond measure topping out at $11.00/hour. (Public Favors $11.00 Minimum Wage, March 11, 2014)

The City staff report I requested is complete and is available on the hyperlink below:

RECEIVE a report from the city manager regarding business outreach and potential impacts from increasing the minimum wage, and INTRODUCE an ordinance (first reading) increasing the minimum wage in the City of Richmond to $12.30 an hour by 2017 - Mayor McLaughlin (620-6503), Vice Mayor Beckles (620-6568), and Councilmember Myrick (620-6636). This item was continued from the April 15, 2014, meeting.

The City offered over 1,000 Richmond businesses he opportunity to participate in a survey. It looks like 53 businesses responded to the survey, 28 of which had more than 10 employees.

• About 15% had employees paid less than $9.00/hour.
• 24.53% had employees paid less than $9.60/hour
• 35.85% had employees paid less than $11.52/hour.
• 47.17% had employees paid less than $12.30/hour.

To cope with the higher wages:

• 23% would comply.
• 17% would reduce the number of employees.
• 15% would reduce employee work hours.
• 13% would consider relocating outside Richmond.
• 10% would outsource jobs. 11% would increase prices.
• 2% would offer more benefits to employees.

Comments from those surveyed varied widely from enthusiastic supporters to those who would close down or leave Richmond.

The staff report offered the following observations:

• Richmond is a unique city. Just because research shows a specific positive or negative impact of minimum wage increases in a jurisdiction, or at thestate or federal level, does not mean that the same will necessarily hold true in Richmond. This is true especially with respect to the impacts to the business community.

• Correlations are not always causations. It is important to recognize a jurisdiction’s industrial structure, demographic characteristics, and other factors, when comparing different minimum wage laws. Simply put, “apples-to-apples” comparisons are vital to understanding the impacts and effects of a potential minimum wage increase.

• The Richmond Minimum Wage ordinance applies to employers and employees that maintain or work within a facility in Richmond or employers that are subject to the Richmond Business License Tax. This distinction is significant, in that an employer or employees may or may not have home residency within the City. So, in the case, or aim, of seeking to raise the minimum wage specifically for Richmond residents, additional analysis would need to be completed to understand the impacts of a minimum wage increase on Richmond residents employed within the City.

• One can often find research and data that will support his/her view and opinions on a topic. For this report, City staff tried to find information from both sides of the debate, as to not portray a one-sided argument. However, there were often cases where more robust studies were conducted to support one side.

• Due to the importance of this issue and the potential magnitude of its impacts, City staff strongly recommends that more outreach be conducted and that the City of Richmond commission a study by experts to look at the impacts of the proposed minimum wage legislation on Richmond’s economy, businesses, community and workers.

Specific points the staff report made include:

• Clarification is needed regarding how to count employees to determine the small business exemption.
• Clarification is needed about how to determine the benefits credit.
• Assuming no negative impact on employment, the total; additional wages paid in Richmond could range from $6.7 million to $13.3 million.
• Richmond’s budget will have to be increased maybe $150,000 to pay for enforcement and higher wages for Recreation Aides.
• Affected workers are largely adults and disproportionately women and people of color.
• There will be a ripple effect that pushes up the wage floor overall.
• The teenage employment rate is likely to suffer, perhaps significantly.

Other conclusions include:

• The potential effect on businesses depends on whose research you read. Various economists have found little effect, but others, such as survey of San Jose restaurants showing that 42 % cut jobs and 45% reduced hours.

• One of the macro benefits cited by studies is the reduction of public subsidies for lower paid workers. While this is a clear result, the benefits accrue not to cities but to the county, state and federal governments.

• Because low wage earners have a propensity to spend locally, the local economy could benefit. However, not all Richmond employees live in Richmond, and other studies indicate potential job losses will negatively affect the local economy.

The staff study resulted in the following recommendations:

• Consider commissioning a study by an economist or other experts to provide an economic analysis on the impacts of a minimum wage increase specifically for Richmond. The study could provide better estimates regarding the number of employees and employers impacted by the minimum wage legislation.

• Conduct additional outreach and provide sufficient opportunity for interested stakeholders to provide feedback on the ordinance.

• Define a clear and comprehensive enforcement strategy, which includes determining penalties and examining personnel needs and costs for the City in performing enforcement activities.

• Clarify the purpose, interpretation, and enforcement of the exemptions regarding small businesses (10 or fewer employees) and the credit f
• or businesses that pay at least $1.50 in to medical benefits plan.

• Continue to examine the exemptions included in the ordinance. For example, San Francisco gradually folded in businesses with less than 10 employees and non-profits to give them more time to adjust but they did not exempt any group. Should additional exemptions be considered?

• Understand the impacts of the minimum wage increase on specific sectors of the community. For example, there is a need to fully understand how business that provide support to the disabled population and receive reimbursements fromthe state or federal government, that may or may not be sufficient to cover the mandated minimum wage rates, will be impacted.

• Create an outreach and education plan to ensure successful implementation of the ordinance is achieved. The plan would provide dates for outreach, determine which groups will receive outreach, decide on outreach methods, and identify organizations and City staff that would be responsible for outreach.

• Develop a set of Frequently Asked Questions for both employees and employers to ensure that all stakeholders clearly understand the ordinance and their rights.

• Consider adding other benefits to the $1.50 credit toward the minimum wage (i.e. paid sick leave and vacation)

• In light of the City’s focus on Health in All Policies, the City Council could consider partnering with the Contra Costa Health Department, Health Impact Partners and others, to conduct a Health Impact Assessment to examine at the health impacts of the minimum wage increase on Richmond residents. Los Angeles completed one in 2005 to estimate the relative health effects of the income and health insurance provisions of the Los Angeles City living wage ordinance (http://jech.bmj.com/content/59/8/645.full).

On April 29, 2014, a meeting was held with approximately 30 participants, including staff, City Council members and advocates. It seems like most of the comments were from Council members Rogers and Booze.
Richmond: Push for minimum wage hike set for another showdown
By Robert Rogers
Contra Costa Times
Posted:   05/05/2014 12:00:00 AM PDT

RICHMOND -- City leaders' effort to establish the highest local minimum wage law in the state is set for another showdown Tuesday, when the City Council is scheduled to hear results of a web-based survey of local business owners.
"I support the minimum wage hike in concept, but what I hear from this study is going to influence where I decide to go with this," said Councilman Tom Butt, the lone dissenting vote when the council passed a first reading of the ordinance in March.
What seemed like a foregone result to raise the local minimum wage gradually to $12.30 by 2017 was halted last month, as four City Council members rejected Mayor Gayle McLaughlin's push to enact the wage hike without a staff study into possible effects.
As word spread and opposition mounted, McLaughlin's coalition splintered and City Manager Bill Lindsay was directed to reach out to the local business community to solicit feedback.
The proposed law sets a transition period beginning with the effective date of the ordinance, usually 30 days after passage, and ending Dec. 31, during which the minimum wage would be $9.
The wage would rise to $9.60 in 2015, $11.52 in 2016 and $12.30 in 2017, which would be the highest in the state if no other cities adopt larger increases.
The ordinance would peg the minimum wage to the Consumer Price Index for the Bay Area each Jan. 1, beginning in 2018.
The state's minimum wage is set to bump to $9 per hour in July and to $10 per hour in January 2016.
Council members initially sought to put the hike to voters in November but then moved to pass it themselves, arguing there was no reason to wait to help struggling low-wage earners and noting a council decision could be easily tweaked as needed in the future, unlike a ballot measure that would require a new election.
Richmond has drawn widespread attention in the national debate over whether higher minimums help low-wage workers by giving them more money or hurt them because businesses can't afford to hire as many workers.
Other Bay Area cities have also opted to move ahead with higher wages, a regulatory approach traditionally led at the state and federal level.
San Francisco's $10.74 minimum wage is the region's highest. San Jose's rate is $10.15. Berkeley and Oakland are also mulling minimum wage increases and President Obama has urged raising the minimum wage nationally -- it is currently $7.25 -- but Republicans in Congress are opposed.
City staff and local business owners met at City Hall last week to discuss the issue. While most members of the public at recent meetings have spoken in favor of the wage hike, a few business owners have argued the ordinance would impair hiring and possibly push them to nearby cities, where the lower state wage prevails.
Lindsay said his staff's report will include feedback from local business owners that will show a range of responses, from those who favor the wage increase and say it will not affect their business to those who oppose the measure and say it could force them to downsize.
The higher wage, as proposed, would apply to most workers in Richmond but would exempt businesses with fewer than 10 employees. Butt has said he is interested in more exemptions, including for tipped workers and workers under age 18.
Richmond's unemployment rate is 11.5 percent, down from 18 percent in 2010, according to state Employment Development Department statistics.
Contact Robert Rogers at 510-262-2726 or rrogers@bayareanewsgroup.com. Follow him at Twitter.com/SFBaynewsrogers.
If you go:
What: Richmond City Council meeting
When: 6:30 p.m. Tuesday
Where: Richmond City Council chamber, 440 Civic Center Plaza
Why: Discussion about potential minimum wage increase