California city weighs minimum wage of $12.30, among nation's highest

RICHMOND, California Wed Apr 2, 2014 4:00am EDT

Homes sit below Chevron storage tanks on a hillside in Richmond, California, in this November 6, 2007 file photo. REUTERS/Kimberly White/Files

Homes sit below Chevron storage tanks on a hillside in Richmond, California, in this November 6, 2007 file photo.

Credit: Reuters/Kimberly White/Files

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RICHMOND, California (Reuters) - A California city in the pricey San Francisco Bay Area postponed a vote on Tuesday to raise its minimum wage to $12.30, which if passed would be among the highest municipal "living wage" rates in the United States.

The proposal before the city council in Richmond, an industrial city of about 100,000 people east of San Francisco, comes as Democratic politicians across the United States are raising concerns about the growing gap between the poorest and richest Americans.

The wage hike would increase wages gradually from $8 to $9 an hour by the end of 2014 and to $9.60 in 2015. The $12.30 wage would be fully phased in by 2017.

The measure got preliminary approval by the city council two weeks ago. It had been scheduled for a final vote on Tuesday, but the council never got to that item on its agenda. The vote was postponed until April 15.

The higher wage would apply to most workers in the city, although it would exempt businesses with fewer than 10 employees. It would also exempt the city's youth summer employment and Welfare-to-Work programs.

Richmond Mayor Gayle McLaughlin said in a statement filed with the city that the wage increase would "help workers and their families avoid poverty and economic hardship and enable them to meet basic needs."

Advocates argue that raising the minimum wage would stimulate the economy, since low-income people spend a higher percentage of their income. Opponents contend that it could slow hiring at a time when the U.S. economy is still facing high unemployment.

President Barack Obama has pushed Congress to raise the federal minimum wage to $10.10 an hour, from $7.25, after nearly half of all states and the District of Columbia raised theirs. Obama's call has failed to win the backing of the Republican-controlled U.S. House of Representatives.

A move by Connecticut last month to raise its minimum wage to $10.10 by 2017, the highest state rate in the nation, has added to momentum on the matter. So did a move by a Seattle suburb to raise its minimum wage for travel and hospitality workers to $15 an hour last year.

If the Richmond ordinance passes, its minimum wage would be higher than nearby San Francisco's minimum entry pay, $10.74.

The ordinance would require employers to post notices of the wage hikes in their establishments and provide payroll records to the city if investigated for possible wage violations.

At last month's Richmond City Council meeting, most attendees backed raising the minimum wage. But several business owners and residents said they were concerned a wage hike would force businesses to move out of Richmond, limit jobs and drive up the cost of goods and services.

(Editing by Cynthia Johnston and Alex Dobuzinskis; Editing by Larry King)

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Comments (6)
ExDemocrat wrote:
Bread and circus is politically popular. Arbitrarily raising business’ costs via state-decreed wage hikes often leads to reduced hiring, and increased private investment in means that save on the cost of labor. The least skilled tend to suffer the most. This is another dumb Democratic Party distortion of the market by over-regulation of the economy.

Apr 02, 2014 5:42am EDT  --  Report as abuse
morbas wrote:
The present tax structure favors wage disparity, by taxing subsistence wage.
One issue I have is that consumers pay business burdens through product cost overhead. The executives are allowed huge profits, which are relatively untaxed, and that are a major business burden. This an incentive for wealth disparity, that can be self regulated by a graduated taxation at margin above subsistence wage. The Income Tax Act of 1913 represents the best approach of combining all income into a non-exempt graduated tax base. This was sufficient to generate a roaring twenties economic plateau. Separation of Corporate and State is needed to shield against oligarch subversion of our peoples Democracy.


Apr 02, 2014 9:22am EDT  --  Report as abuse
CliftonC wrote:
Do as they may. But we the tax payer should not be expected to pay for all the unemployment costs and bankruptcy of the city.

Apr 02, 2014 9:47am EDT  --  Report as abuse
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