Two Stories Of Impact From San Diego's Minimum Wage Increase
San Diego became one of several cities that recently raised its minimum wage above both the state and federal minimums.
Minimum Wage Comparison
California in 2016: $10/hour
San Diego in 2015: $9.75/hour
San Diego in 2016: $10.50/hour
San Diego in 2017: $11.50/hour
In 2019, wages will be tied to inflation.
Workers also get five earned sick days a year.
This is not that kind of story.
Instead, this story illustrates the lives of two people who will be impacted by the increase in very different ways.
Neither are politicians, but both have been following politics closely in the last few months.
Kristin Aguirre is a married mother of four daughters, all under age 8. She's 25 years old and earns minimum wage working at the Burger King in City Heights.
"There's a lot of people out there who work minimum wage with kids and it's hard to get by day by day," she said.
Aguirre's pay went from $8 an hour to $9 an hour when the state minimum increased on July 1. Under San Diego's new law, her pay will go up again to $9.75 an hour at the end of this year. But Aguirre is only scheduled to work part time, so her monthly pay will get a bump from about $500 to $540 a month.
"It's a little bit more each paycheck, but it's better than making what I'm making now," she said.
Aguirre is one of about 190,000 San Diego workers who earn less than $16,000 a year, according to an analysis by National University System Institute for Policy Research. She said she wants to work more, but she's only scheduled for about 20 hours a week.
The increase to $11.50 an hour in two years will make a difference for her family, Aguirre said.
"Maybe I'll be able to afford a better babysitter instead of just my mom all the time, so (my children) can actually be in daycare, so I could go to school and get a better career for myself," she said. She wants to study criminology.
Aguirre lives with 10 other people in a three-bedroom house in Lemon Grove. Her four girls share a room, while her sister lives in the living room.
Aguirre's monthly pay barely covers the rent. Her husband makes $200 a week, which pays for food, diapers, gas and school supplies. The family is on food stamps and Medi-Cal, but Aguirre said there's a lot more they need.
"Like new shoes for school," Aguirre said. "Right now I can't afford it."
"And crayons," whispered her 5-year-old daughter Vivian, who sat beside her on a dirty mattress on the floor.
"And crayons," Aguirre added with a laugh.
Matt Gordon is owner of three restaurants, two in the city of San Diego, Urban Solace and Sea & Smoke. He has 54 San Diego employees who earn minimum wage plus tips. His other employees earn more than the minimum wage.
"I'm fully in favor of the state raising the minimum wage, and possibly even some of what's happening in San Diego specifically, but we don't pay people that amount to begin with," Gordon said.
Gordon estimates that increasing his tipped employees' wages to $11.50 an hour will end up costing him $588,000 a year including taxes. That doesn't include an increase in workers compensation that accompanies higher wages or bumps to the pay of managers and other entry level employees, some of whom make $10 an hour.
California law says tipped employees must get minimum wage as a base pay. Gordon says his servers make between $20 and $30 an hour with tips. City Council President Todd Gloria said while the San Diego City Attorney opined that the city's ordinance could have tried to exempt tipped employees from the minimum wage increase, Gloria didn't include any exemptions because he didn't want to risk lawsuits or add extra enforcement complications.
So Gordon must figure out how to make up the costs.
"I only sell two things, and that's food and beverage," he said. "So the only way for me to cover extra costs is to bring in more income or to cut services."
Gordon tries to use local and organic food in his restaurants, and doesn't want to stop. Because he buys from local companies that may also face increasing costs, he worries restaurants like his will have to raise prices more than other restaurants. And, if prices go up, he fears diners may seek out cheaper places to eat, and tourists may avoid San Diego.
"I'm worried that people will choose not to come here, or at least when they do, they're not going to patronize places like my restaurant who really are going to have to realign how we do our business to survive," he said.
There were 3,818 independent restaurants and 3,102 chain restaurants in San Diego as of March 31, 2014, according to market research company The NPD Group.
Aguirre's plan to spend her increased wages on shoes and school supplies for her daughters illustrates another of Gordon's worries. He said while minimum wage proponents say pay raises will boost the local economy, he doesn't see it that way.
"I don't have a crystal ball, but I'm pretty sure that someone who's making $10 an hour and now is going to make $11.50 an hour isn't going to all of a sudden decide to stop going to Walmart and McDonald's and Burger King for hamburgers and towels and sheets," he said. "They're not going to suddenly go to Urban Solace and stop at Pigment on the corner on the way out to buy a $200 candle because they got a raise for $1.50."
Aguirre has heard minimum wage opponents' argument that she should earn a raise, not get one from the government. But she said she's caught in her current circumstances. She sees no way to earn more unless she can afford daycare and go to school.
"I could have waited to have kids and gone on with school, but I didn't," she said. "Just because of that, we shouldn't be punished and make a low wage to raise our kids."
Gordon also wants his non-tipped employees to earn more, but said his money will now be spent on increasing the pay of his servers.
"I'm sure it's over 1,000 employees that I've had over the years, that I've provided opportunity for, by the goodwill of the people who decided to walk in the front door and spend that money on that burger," he said. "I want to see that continue."
Two people, two distinct impacts.
Aguirre and Gordon come at the issue from very different sides, but both are calculating new budgets that will begin to change on this coming New Year's Day.