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Business Owners Weigh In On Proposal To Raise San Diego’s Minimum Wage

Evening Edition

Aired 6/9/14 on KPBS Midday Edition.


Harry Schwartz, Co-Owner, ACE Hardware, downtown San Diego

David Gimbel, owner, Voice & Video Rentals


California's minimum wage will increase to $9 per hour next month. But some in San Diego think that’s not enough and recently proposed increasing the city’s minimum wage to $13.09. However, not everyone agrees with the hike and the issue has divided the business community.

David Gimbel, owner of a video equipment rental store, said while a minimum wage increase wouldn’t directly affect him because he already pays employees nearly double that, he supports it. He points to the raise's impact on the local economy.

“All the statistics show that cities who have increase their minimum wage get much more money going back into the community — almost 100 percent of every dollar out of those raises goes right back in the community,” he said.

On the other side, there's Harry Schwartz, co-owner of the downtown ACE Hardware store. He said the increase wouldn’t just give a few more bucks to minimum wage workers, but that all hourly workers would expect a raise. Even his employees who already earn $10 an hour.

California's Minimum Wage

The state of California is set to gradually raise its minimum wage from the current $8 to $10 an hour by 2016. But a bill is making its way through the state Legislature that would raise California's minimum wage to $13 an hour by 2017.

“So as the minimum wage goes up — assumedly to 13.09 — the whole pay scale for hourly workers goes up," he said. "So we’re not properly measure what the impact would be on small businesses and that’s a concern to me.”

To accommodate his workers’ expectations, Schwartz said he would have to raise prices, possibly losing business to hardware stores in nearby cities.

Just last week, organizations on either side of the debate held competing news conferences, and pointed to studies that support their respective views on the issue.

At a news conference Thursday, the San Diego County Taxpayers Association and San Diego Regional Chamber of Commerce released a report that showed the increase would hurt small businesses and minimally benefit San Diegans living in poverty.

But Thursday night, proponents of the proposal to increase San Diego's minimum wage hosted a rally in Hillcrest to drum up support. They say the current rate of $8 per hour isn't enough to make ends meet without government assistance, according to a report released earlier this year by Center on Policy Initiatives.

This week, the city's Economic Development and Intergovernmental Relations Committee will be discussing the proposal supported by Council President Todd Gloria. If the committee approves Gloria's proposal Wednesday, it will go to the full City Council. Council members will then decide whether to approve the wage hike or send it to the ballot for a public vote.

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Avatar for user 'TJworker'

TJworker | June 10, 2014 at 3:51 p.m. ― 2 years, 9 months ago

Raising the minimum wage is extremely cruel to the poorest, least skilled and least educated among us. The unemployment rate is already highest for these folks. Raising the cost to hire them can only make this worse.

In effect, you make it illegal to employ someone whose skill, aptitude and/or intellect, make them not worth $13/hour. Yes, this would be difficult for some businesses, but that is nothing compared to what it does to the folks that lose or are unable to get jobs.

Great politics, but with terribly cruel economic consequences.

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | June 10, 2014 at 5:08 p.m. ― 2 years, 9 months ago

I agree with the critics who say the mw is better lifted in small increments over time.

The problem with this, however, is that it has not been lifted in increments to even keep up with basic inflation, and therefore we need to make this jump now to correct this and after this is done make incremental increases so the income gap doesn't get this out of hand again.

TJ worker, you talk about workers being "worth" $13 an hour.

What is your benchmark for determining worth?

Everything EXCEPT the minimum wage has gone up - including rent, food, goods, inflation in general, and pay scales on the opposite end of the spectrum.

This means that someone making minimum wage today is in reality taking a pay cut each year as these indices change, even though their pay has remained the same.

If your pay remains the same and inflation rises, it's like getting your pay docked.

How is that fair, especially when people at the higher end of the spectrum are not just keeping up with inflation, they are getting FAR more than this.

This is the recipe for a plutocracy.

A widening income gap between rich and poor just squeezes out the middle class.

I think this mw hike would benefit us all, not just those working in the minimum wage jobs.

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Avatar for user 'TJworker'

TJworker | June 11, 2014 at 2:26 p.m. ― 2 years, 9 months ago

P-Duck, just to clarify, my benchmark for determining that a person is not "worth" $13/hr is that they will not be able to find employment for $13/hr when the minimum wage is raised.

There are folks that could be hired (and are willing to work) for $7.25/hr but will not be hired if the wage is set at $10 or $13/hr. Some of these folks could work for a while a $7.25/hr, gain some skill, and maybe earn far more than minimum wage some day. I did. (it was $2.50 or $3.25 when I made minimum wage)

However, the wisest among us have determined that they will not allow the person who can get a job for no more than $7.25/hr have this opportunity. This is cruel.

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Avatar for user 'JeanMarc'

JeanMarc | June 11, 2014 at 2:51 p.m. ― 2 years, 9 months ago

TJworker your logic is correct, and rare around here in the land of leftists. There are college graduates who make 13/hour. Minimum wage jobs are not career jobs. If someone wants a career, they need to learn a valuable skill. There is a huge supply of unskilled labor. This means the price for labor that anyone in the world can do is going to be low. Supply and demand. These jobs are starting jobs, high school and college kids can do them.

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Avatar for user 'Thedude'

Thedude | June 13, 2014 at 8:32 a.m. ― 2 years, 9 months ago

99% of companies in the U.S. Are small businesses of less than 5 people, and only a quarter of those businesses end up being successful long term. A change like this will drop that percentage, the costs of workers is usually 60%+ of their expenses.

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Avatar for user 'casualobserver'

casualobserver | June 13, 2014 at 10:41 a.m. ― 2 years, 9 months ago

Small businesses do employ over half of the American workforce, but one has to understand that the legal definition of a small business can include those who employ up to 1500 employees and have annual sales of $20 million, depending on the sector. And yes, something on the order of 75% of small businesses employ less than 10 workers (not 99%, which is the figure for businesses employing less than 500 employees), but even if we take into account businesses with up to 20 workers this accounts for only 18% of the total US workforce.

The issue that is being missed in this discussion is that under current minimum wage levels taxpayers end up subsidizing supposedly Free Market capitalism by having to pay for food stamps, health care, child care and other social services which minimum wage workers typically qualify for because employers do not pay adequate wages. Much like the term small business, free market capitalism isn't what people think it is. By the way, I am a small business person...

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Avatar for user 'Missionaccomplished'

Missionaccomplished | June 13, 2014 at 12:07 p.m. ― 2 years, 9 months ago

JOHN MARKKK, with a staunch Republican DA, a Republican representing El Cajon and Santee following his fathers footsteps, a Republican mayor following ANOTHER Republican mayor . . . pray tell, HOW is this the "land of the leftists"???

What are YOU smoking?

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Avatar for user 'Missionaccomplished'

Missionaccomplished | June 13, 2014 at 12:11 p.m. ― 2 years, 9 months ago

Thedudette, 99%!!! That's a crazy figure!!! Where in the blank did you get THAT???

The main reason ONLY a FRACTION of small businesses are succeful, as you say, is due mainly to the Walmarts of the world, pushing the mom and pops out into oblivion! Why, Albertson's was bought out by Safeway/Vons, how do you think a small grocery store would fare???

That's just a little sad fact for all of those "let the market determine everything" types. In the long-term, it is counter-rpductive.

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Avatar for user 'benz72'

benz72 | June 13, 2014 at 12:52 p.m. ― 2 years, 9 months ago

MA, it is a little disingenuous to claim that small businesses fail because of Walmart. Certainly small discount grocers would have a difficult time competing in most areas but small businesses providing trade skills or specialty retailers are not even in competition with Walmart.

In the long term, many persons are also counter-productive. As with many systems, you can only get out of it what you put into it.

To the broader point, to be worth employing someone at $13 per hour that wage plus the cost of benefits, admin, training &c. need to be less than the profit produced by their labor. Worth is a comparison of values and in this case they are generally measurable with a fair degree of accuracy, if not ease.

The argument about inflation seems to miss the point, that is true for all values measured in dollars, not just wages.

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Avatar for user 'JeanMarc'

JeanMarc | June 13, 2014 at 1:33 p.m. ― 2 years, 9 months ago

Missionaccomplished, I was referring to this message board as the land of leftists. Many people here are leftist/socialists and KPBS certainly promotes the communist agenda in this country. So it is rare to see someone who has the same opinion as me. San Diego is one of the more conservative cities in California.

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | June 13, 2014 at 3:42 p.m. ― 2 years, 9 months ago

Jean, what you consider "communist" most Americans consider capitalism with safety nets.

Every major ideology has drawbacks, including capitalism. If we don't have safety nets (SS, Medicare, Affordable Healthcare) and simply let the "market" take care of everything, our country will be in ruin.

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Avatar for user 'JeanMarc'

JeanMarc | June 14, 2014 at 12:59 a.m. ― 2 years, 9 months ago

And welfare, infinite unemployment checks? Are these safety nets? Many people decide not to look for a job because the government pays them as much as they would make working. Living off the government should not be a career choice.

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Avatar for user 'mccolgan55'

mccolgan55 | June 14, 2014 at 3:04 p.m. ― 2 years, 9 months ago

“So as the minimum wage goes up — assumedly to 13.09 — the whole pay scale for hourly workers goes up," he said.
This is the problem. I don't think this is the case. It would be interesting to see by how much (if any) people's wages went up who were making a little more than the minimum over the last 20-40 years when the minimum was raised. Were all pay scales raised or were there now many more making the minimum wage than there were before. If the minimum in SD goes to $13.09 does that mean those that currently make $15-$20 an hour can expect a raise? I sincerely doubt it.

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Avatar for user 'casualobserver'

casualobserver | June 15, 2014 at 4:58 p.m. ― 2 years, 9 months ago

Welfare? Infinite unemployment checks? You must be referring to corporate welfare, farm subsidies, oil company subsidies and the like enjoyed by the supposed champions of free enterprise, who then also receive bonuses and retirement golden parachutes even when they have been dismal failures in their leadership positions. And living off the government as a career choice? Do you mean defense contractors? Military? Construction companies completing infrastructure projects? Red States who receive more in tax reimbursements than they pay in federal taxes? Sports franchises using tax dollars to fund their stadiums?

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | June 15, 2014 at 10:48 p.m. ― 2 years, 9 months ago

casualobserver is right on the money.

I suppose the conservatives think Koch Enterprises, Wal Mart, Big Oil and the like are "free market" enterprises.

Both bully local governments into getting their way, pay lobbyists who work to get them special government favors, and funnel money directly to on the take politicians themselves.

What's that?

A Big Oil Billionaire Boss thinks anthropogenic climate change will mean regulations that could make him a billionaire only 4 times over instead of 5 times over?

Let's hire lobbyists and political operatives to declare anthropogenic climate change a "hoax" so we can continue polluting.

What is going on in America today with corporate bullying and corporate greed is NOT free market capitalism.

It's corporate takeover of Big Government to tailor everything to their benefit.

The crazies holding the "don't treat on me" flags are too stupid to see it, but corporations are able to infiltrate people's lives just as much as the government can.

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Avatar for user 'benz72'

benz72 | June 16, 2014 at 8:14 a.m. ― 2 years, 9 months ago

PDSD "It's corporate takeover of Big Government to tailor everything to their benefit."

Yes, regulatory capture is one of the major arguments against big government.

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