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In This Issue...
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Measure G on the Ballot
Initiative to Raise Minimum Wage in the City of Santa Cruz
By Judith Wellner
Measure G, a controversial initiative to raise the minimum wage in the city of Santa Cruz to $9.25 per hour, is slated for the ballot in the upcoming general election on Nov. 7. The sponsor of the initiative, the Campaign to Raise the Minimum Wage, was successful in collecting 6,046 signatures to certify the measure for the ballot. It goes before voters as California’s governor signs into law a new minimum wage law.
On Sept. 12, Governor Schwarzenegger signed a bill that will raise the minimum wage in the state of California to $7.50 per hour starting Jan. 1, 2007. The rate then will go up to $8 per hour on Jan. 1, 2008.
The federal minimum wage was set in 1997 to $5.15 and hasn’t changed since then. The states, however, have the right to determine their own minimum wages. Before the recent change, the minimum wage for California was $6.75.
Cities can also set their own standards. The city of San Francisco, for instance, set the minimum wage to $8.50 in 2004 and then raised it to $8.82 in January this year.
According to the Santa Cruz city measure â€" which would only be law within the city limits â€" most employers would be required to pay the new minimum wage rate starting Jan. 1, 2007. Small businesses and non-profits, however, would initially be required to pay only $8 per hour and then set the rate to $9.25 starting Jan. 1, 2008.
The Pros and Cons
Measure G has split the Santa Cruz business community. Supporters argue that the new ordinance would create a more level playing field for workers.
“Everyone deserves a decent wage,” said Nora Hochman, representative of the Campaign to Raise the Minimum Wage and a union activist. “Although it’s a very modest increase, it can really make a big difference.”
She added that the measure would give a pay increase to at least 4,000 employees in Santa Cruz.
“These employees are hardworking people. They work more than full time,” she said.
Opponents agree that creating jobs and increasing wages is important for the community, but they argue that Measure G fails to recognize the detrimental impact it would have on businesses and consumers.
The argument against the measure, which appeared in the upcoming election’s voter education pamphlet, was filed by the Locally Owned Business Alliance of Santa Cruz. The opposition’s main concerns are that the ordinance might force business owners to lay workers off, increase prices, or cut their operating hours, and it would also provide advantages to chain stores over locally owned small businesses.
The opposition also points out that Measure G would cost businesses and non-profits $12.5 million in the first year alone. Supporters, on the other hand, argue that this amount is less than 1 percent of the city’s total annual sales.
Hochman noted that businesses might, in fact, have to raise their prices if the measure passed.
“They often do that anyway, to cover rent, fuel and product,” she said. “It would take a very small price increase to cover this cost. [In a restaurant] the cost of a meal probably won’t be noticed on the menu.”
Can Santa Cruz Business Compete with Higher Payroll Costs?
On the other hand, Paul Geise, owner of Ristorante Avanti, argues that passing the measure would have undesirable consequences. His main concern is that the ordinance would create an unfair advantage for businesses located in Santa Cruz County and outside the city limits.
“I would have to compete with a restaurant in Capitola,” he said.
Geise said that leaving California’s legislature with the job of setting the minimum wage means unfair advantages aren’t created within a single county.
“I support a higher minimum wage for the entire state. That way we all pay the same amount to people. That’s fair because it’s equal,” he added.
Geise said that if the measure passed, he would have to make changes in how he runs his business. And the end result might not help employees earn more money.
“What might end up happening to somebody like us is that we might just charge a service fee,” he said. “This would mean that servers wouldn’t get the tips, it would be a service charge and not gratuity any more.”
Ernesto Quintero, owner of Saturn Café, disagrees, saying that the ordinance would not have such negative effects.
“We don’t think that in any way it has to negatively impact us,” he said.
Quintero added that creating sustainable living for employees is very important.
“Our business has always been committed to progressive business politics. We really believe that includes labor practices. It seems completely reasonable to us that our workers should be paid a wage that they can actually live on,” he added.
Emily Yeo, manager of Takara Sushi, oversees restaurants both in Santa Cruz and Capitola. She strongly believes that Measure G would not solve the problems relating to low wages.
“I can see one point of view why some people would like it to be raised,” she said. “But from my point of view, even though you’ll have more money you’ll have to pay more for everything. Prices will go up for sure. Not a lot of companies can afford this wage hike.”
Would Santa Cruz Measure Mean Increases Elsewhere?
She pointed out that even though the measure only affects the city of Santa Cruz directly, it would also have a big impact on surrounding areas.
“It’s eventually going to affect Capitola as well,” she said. “It’s just the question of time.”
Yeo added that she expects that if the measure passed, some of her servers might leave the Capitola location and look for work in Santa Cruz.
Measure G requires a simple majority from voters to pass.
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