Residents of San Francisco in November will vote on whether to raise the city’s minimum wage to $15 an hour. The decision to put the measure on the ballot came after a grassroots coalition collected thousands of signatures on a petition calling for a referendum on raising the minimum wage.
After the petition was presented to Mayor Ed Lee and city’s Board of Supervisors, they reached an agreement on the wording of the referendum.
If passed, the proposed referendum would increase the minimum wage to $15 an hour by 2018, and fewer workers would be exempted from coverage than were exempted by the historic $15 an hour minimum wage ordinance in Seattle.
Meanwhile, low-wage workers in the US received a boost from an unlikely source when the International Monetary Fund urged the US to raise its minimum wage. The IMF implied in its annual review of the US economy that the high level of extreme poverty in the US is a drag on economic growth.
While San Francisco is usually thought of as a wealthy city, a substantial number of its residents live in poverty.
According to the US Census Bureau, the city’s poverty rate in 2013 was 12.8 percent.
But the federal poverty guidelines that the Census Bureau uses to define poverty understates the number living in poverty because the guidelines do not account for regional differences in the cost of living.
The State of California has a higher cost of living than most other regions, and the cost of living in San Francisco is among the highest in the US.
The California Measure of Poverty accounts for this higher cost of living.
When the California measure is used, San Francisco’s poverty rate increases to 23.4 percent. Of the city’s 788,600 residents, 187,300 live in poverty.
The city’s high rate of poverty and recent national actions by low wage workers spurred a coalition of community groups and labor unions to take action. The Coalition for a Fair Economy canvassed neighborhoods collecting signatures on a petition to raise the city’s minimum wage to $15.
The coalition consisted of UNITE-HERE Local 2, SEIU Local 1021, The San Francisco Labor Council, the California Nurses Association, the San Francisco branch of ACCE, Jobs with Justice, Young Workers United, the Chinese Progressive Association, Progressive Workers Alliance, and SF Rising.
The minimum wage petition forced the referendum onto the agenda of the city’s Board of Supervisors.
If the referendum passes, the minimum wage will be raised to $13 an hour in 2016, $14 an hour in 2017, and $15 an hour in 2018. In 2019 and after, minimum wage increases will be tied to increases in the cost of living index.
According to the San Francisco Labor Council, there are only two small groups of workers who will be exempted from coverage: those participating in city-funded youth job programs and elderly monolingual immigrants who work in a city sponsored housecleaning program that provides participants with health care and sick days.
The new minimum wage standards will be phased in equally for all businesses. There won’t be two schedules–one for large businesses, the other for small businesses.
Some in the San Francisco business community, most notably owners of bars and restaurants, have complained that raising the minimum wage will hurt business, but the recent statement by the IMF urging the US to raise its minimum wage makes the business owners’ argument less compelling.
In its annual review, the IMF estimates that the 2014 US Gross Domestic Product rate will increase by a lackluster 2 percent, well below historic levels and well below capacity.
The IMF recommended a number of actions that the US should take to spur growth. Some of which you would expect from capital’s banker of last resort and chief financial advisor–increase productivity, encourage innovation, reduce government debt, and “reform” Social Security.
But the IMF also states that the US must confront its high level of poverty and recommends extending the earned income and child tax credits and raising the minimum wage. It notes that the US poverty rate is higher than poverty rates in comparable countries and the minimum wage is much lower.
Federal action to raise the minimum wage for now seems unlikely given the stranglehold that minimum wage opponents hold on the federal government. But efforts at the local level like the ones in San Francisco and Seattle could make a decent raise possible for low-wage workers across the US.