A new report commissioned by the San Diego Taxpayers Association and the San Diego Regional Chamber of Commerce states that raising the hourly minimum wage in San Diego would hurt many small businesses, and be an ineffective tool to reduce poverty.
Jerry Sanders, the city’s former mayor and now chamber CEO, said hiking the wage above what the state currently has set “puts San Diego at a competitive and economic disadvantage and hurts the very worker the proponents are purporting to help.”
The San Diego City Council was considering adopting a graduated minimum wage increase to $13.09 by 2017, but some supporters of an increase have opted to pursue a ballot measure this November to increase the local minimum wage to $12 by 2018.
California’s minimum wage is set to increase from $8 to $9 an hour July 1, and go to $10 in 2016. Recently, the city of Seattle increased the minimum wage there to $15 an hour.
At a press conference June 5 held outside an Ace Hardware Store in downtown San Diego, the store owner Harry Schwartz said increasing the minimum wage would prompt him to raise prices at his store by 12 percent to cover the higher personnel expenses.
Michael Hormozi, owner of MAK Cleaners, said if the hourly wage is raised, so will his payroll taxes and worker compensation costs, adding to his costs.
Among the findings in the report:
*Some businesses will have to cut employees or their hours to comply with the higher minimum wage requirement.
*Businesses will have to pay higher wages, but most of those benefiting don’t live in low-income households.
*Automation and globalization are the main factors depressing wages for low-skilled labor. Rather than increasing hourly wages, education and workforce development can provide the best long term opportunities for improving conditions for those earning lower incomes, the report said.