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California's Minimum Wage Increases To $10 In New Year

December 28, 2015 1:16 p.m.

GUESTS:

Lorena Gonzalez, assemblywoman

Jason Roe, political consultant, Revolvis Consulting

Related Story: California's Minimum Wage Increases To $10 In New Year

Transcript:

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

Hello, I'm Tom Fudge and you were listening to Midday Edition on KPBS. First here's some stories we're following in the KPBS newsroom. New laws open more California roads to electric vehicle starting January 1. Bicycles with electric motors allowed on the same path as Petter Paolo models and electric skateboard riders can roll down public streets and sidewalks. The city of San Diego's 42nd annual Christmas tree recycling program got underway today. Residents can drop off their trees at the Miramar greenery or any of the 15 other citywide locations until January 23. Besides sightseeing players and coaches with holiday bowl teams USC and Wisconsin are preparing for Wednesday's 38th annual holiday bowl a Qualcomm Stadium. The USC Trojans making a rare second appearance in the holiday bowl this year.
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The top story on the day, this Friday California's minimum wage goes up to $10 an hour. While that's a highest among all states some cities are planning to go further. LA and San Francisco plan for $15 minimums by 2020 and some state lawmakers want to try again next year to raise the statewide minimum wage to $13 an hour. The national minimum wage by the way is $7.25 and hope that's not too many numbers for you. As we enter the political season of 2016 with the presidential election the issues of incoming of quality minimum wage are hot and today will get two different views of the minimum wage. We start by talking with Democrat Lorena Gonzalez that California state assemblywoman representing San Diego and thank you for coming in.
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Thank you for having me.
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Who is the minimum wage earner?
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A lot of people have a belief that somehow teenagers that have a summer job. In fact 95% of people earning minimum wage are over the age of 20 and 50% of them are over the age of 30. About one third have children. Over half of them are women. Minimum-wage workers are just like you and me, our neighbors quite frankly just starting in the workforce or been there quite some time.
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Will raising the hourly wage to $10 make an impact?
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It will make a little impact. Right now if you have a full-time job and you make the minimum wage to make a little under 10 -- $19,000 a year. We know that's not enough. If you are able to work full-time at minimum wage is $20,800 and nobody believes you can actually live in San Diego on that wage. That means taxpayers pick up the rest through social services, food stamps, section 8 housing, free lunch programs. We can either require big corporations to pay more or taxpayers will be responsible for ensuring people can get by.
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Let's talk about San Diego. In June 2016 San Diego voters will weigh in on a measure to raise our minimum wage to $11 50 x 20 17. Why should San Diego have a higher minimum wage than the state as a whole?
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We know San Diego's more expensive to live in. I don't think it's high enough quite frankly. The efforts to increase it in San Diego are noble. I think we should increase it but we need to increase its statewide and far beyond the $10.50 that would become automatic in June and $11.50. We need to look at $13 or $14 minimum wage to make sure people can get by.
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Opponents have said raising the minimum wage in the city of San Diego only would put San Diego businesses at a disadvantage and could discourage businesses from setting up here. What is your response?
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I think that's always what the opponents like to say but the same opponents when we talk about the mayor is opposed to the statewide minimum wage increase in every minimum-wage increase he has seen. It becomes an excuse that San Diego can't handle it. I don't think we will see McDonald's and Walmart fleeing San Diego because they have to pay workers more. They will still be located in the city. The majority of the minimum wage people paying a minimum wage are large corporations that make their planning on supply and demand and they will be in San Diego.
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To you expect raising the minimum wage will reduce the number of jobs available if we assume there's only so much money to go around?
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There is not evidence that will happen. These are large corporations that can take in the increase in minimum wage. Even small businesses that find it tougher and that's the reason we tried to tear it and do it slowly, small businesses benefit the most from increase in minimum wage because people have more expendable income and can spend more money. For the most part there has been noticed -- there have been studies that show that an increase in the minimum wage doesn't decrease jobs. It's an opportunity for us to make sure that the jobs that people are going to actually pay the bills.
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Is the minimum wage the most effective tool for fighting income inequality?
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It's one of them. It's not on its own. One thing I like about the San Diego minimum wage as well as the statewide ballot initiative is it increases the number of sick days as well. There are benefits that workers in the United States don't have that they have in other countries. We don't allow women to take a timeout when they have children. We don't allow people to take paid time off when they are sick. We have three days in California but we need more days. We have increased the earned income tax credit and make it a state program which helps. The bottom line is when you have huge corporations where the CEO is making so much money and the stockholders make so much money and the workers who actually do the work live in poverty, something is wrong.
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You are listening to Midday Edition and a speaking with Lorena Gonzalez and was a California state assemblywoman representing San Diego. This year you co-authored a bill that would have raised the statewide minimum wage to $13 an hour. Do you anticipate that will be revisited by the legislature next year?
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I hope so. We have a change of leadership in the assembly starting early this year that's currently sitting stalled in assembly appropriations. I'm hopeful with new leadership will have a chance to look again at a $13 statewide minimum wage with indexed for inflation that make sure that throughout the state we can bring people up a little bit more. There is also statewide ballot initiatives that would bring it to $15 an hour. I support all of these as an effort to increase the minimum wage to a point where if you work full-time you don't have to rely on public services to get by.
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What about ballot initiatives and they haven't made it on the ballot yet and don't know if they will, but it would put it up to $15 an hour? Can you give us a progress report on those?
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They are in the field now everything from polling and resources put into it that they will be successful and make it to the ballot. We think Californians are ripe for this. If you look at the polling people think it should be increased. If you look at other places that have increased it for $15 there has been broad support. It's not just a $15 minimum wage eventually by 2020 but also allows for five earned sick days for every worker in California. It's natural that a progressive state like California realizes it's too expensive to live here, the worker should be compensated, and I think it will be successful.
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One point that I will make is that clearly if the legislature pushes the minimum wage up to $13 an hour been San Diego's effort becomes moot because that's only $11.50 an hour. I think that's all that needs to be said about that unless you want to add something.
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It would but it's already on the ballot in San Diego and if it passed in San Diego immediately the wage would go to $10.50. It would increase in the city even if we wait for the $13 wage to come in in 2017. The other thing it would do in San Diego is extend the number of paid sick days people can earn from three which is statewide standard now to 5 so that would have an effect. It matters we pass this in San Diego. It matters to be passed through the legislature and ultimately statewide by a ballot measure.
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On a different note January 1 one of your bills goes into effect this is the one that requires professional sports teams to pay cheerleaders the minimum wage with overtime and sick time. It looks like the charger girls will get minimum wage for at least one game of the season.
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At least one game and its statewide. Unfortunately they moved to Los Angeles and we will make sure that those women up and down the state are treated as employees. They will be able to earn workers compensation, unemployment insurance, sick days, and a minimum wage and it's long overdue.
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Democrat Lorena Gonzalez is the California state assemblywoman representing San Diego thank you very much. You are listening to Midday Edition. We are now joined by Jason Roe. He is a political consultant who worked with the small business coalition, a local group opposed to raising the minimum wage in San Diego. They succeeded in qualifying a challenge to the minimum wage ordinance passed by the San Diego city Council for the June 2016 ballot. I think we got you on the line?
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I am here, Tom.
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Thanks for joining us. You supported the statewide minimum wage hike that goes into effect this week. Why do you oppose raising the minimum wage in San Diego beyond that?
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I think we have to start with the state increase. To refresh people's memories we're talking about an overdue significant increase from where we were. It's a 25% increase. They have been affecting it over a two year period. Small businesses recognize it was overdue and it's being phased in a way they can figure out a way to manage that. Having said that anecdotally from what I'm seeing in San Diego it's already having an impact. Restaurants I frequent with my family, I am noticing increases in menu prices and fewer servers on the floor. It is having an impact. When you talk about having a city only increase, San Diego County is a large County with 17 other cities outside of the city of San Diego. If we have businesses that are either starting or expanding and looking at the cost of providing labor to have a business, it becomes disproportionately higher to have that business located in the city of San Diego. With restaurants obviously you depend on location so there is some flexibility there. We're talking about what would in San Diego that would not be a 25% increase but a 44% increase in when you look at restaurants, labor is the number one cost that those differences have. We're talking about a very significant increase to the bottom line. Those costs don't just come out a big corporation pockets the way Assemblywoman Gonzalez would have us believe. Most of these restaurants are small mom-and-pop operations and not big corporations. That will come out with the number of jobs they provide, reflected in menu prices, and at the end of the day customers will pay higher prices and we will have fewer jobs.
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I asked Ms. Gonzales whether a higher minimum wage means fewer jobs overall and she didn't think it would but you disagree.
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It's economics. I know that she can't base that on any research, and Chester on educated opinion on the subject. Do the math. If I am a restaurant tour and I have a small restaurant and I employ 30 or 40 people in my payroll every week is $10,000, and I just absorb a 25% increase which is $12,000, if Assemblywoman Gonzalez had her way that would go up to a $15 minimum wage. Now we're talking about significant amounts of money. Where does that money come from? Anyone who knows the restaurant business knows that restaurant tour's have a thin profit margin. These are not wealthy people typically other than some chain restaurants. Where does that money come from? It doesn't come from the owners pocket because they can't really afford with the margins a house to dig into their pocket for it.
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A quick question about the restaurant business. Does California have what they call a restaurant credit? If you have waitresses or waiters will get tips, do they still get the minimum wage?
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We don't have what's called tiered. In the state I grew up in when I worked in the restaurant industry for tipped employees there was a lower wage and then there was a standard rates for everyone outside of tips. I put myself through college working minimum wage jobs as a waiter and bartender so I have some familiarity with having to survive on that kind of money. Anyone that looks at a high-end waiter or bartender and thinks they are not making a good living I think it ignores the reality. We're talking about an employee was going to make $10 an hour in minimum wage plus their tips. That ballot initiative that's out there to it up to $15 and we're talking about tipped employees getting $15 an hour. Excuse the value of the job.
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We are short of time but one more question for you, Jason. Do you agree the U.S. has a problem with stagnating middle-class incomes and greater income inequality and isn't minimum wage one way to address that?
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No. I find it kind of amusing that policy espoused by left-wing politicians like Lorena Gonzalez drive up the cost of living and then they cry crocodile tears that it's too expensive so we have to artificially increase wages. Take affordable housing in the city of San Diego, 47% of the cost of building a house in San Diego is government. We're nearly doubling the price of what should be a house just because of government costs. When we drive up the cost of housing, a fuel, of utilities and then we price people out of the market and left-wingers like Gonzales want to turn around and say let's artificially prop up wages of people live like this, it doesn't make sense. It's bad economics and will perpetuate.
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Jason Roe is a political consultant who worked with the small business coalition, a local group opposed to raising the minimum wage in San Diego. Thank you for joining us.
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Thanks for having me, Tom.