- Photo by David Rolland
On her hour-long morning commute, Lisette Orosco drops off her 6-year-old daughter at school near their home in Chula Vista and her 4-year-old son at daycare in San Ysidro, then drives north to Sorrento Valley, where she works as a legal assistant.
She wants to move closer to work, but making $11 an hour, she hasn’t found a place she can afford. Instead, the single mother and her children rent a room for $400 a month in a house with two other people. She recently got a second job selling kitchenware on the weekends but is still living paycheck to paycheck.
“It’s kind of scary to be at a standstill, because right now I feel like I’ve sort of plateaued in my life,” the 25-year-old said. “I can’t even put myself through college. How am I going to put my kids through college?”
Although she’s an articulate high-school graduate working more than 40 hours a week, Orosco—who was introduced to CityBeat by the Center on Policy Initiatives (CPI), a left-leaning San Diego think tank— has little to no disposable income and often struggles to secure basic necessities for her family, such as food and clothes. The federal Supplemental Nutrition Assistance Program (SNAP) and YMCA-subsidized daycare keep them afloat, but it’s hard to imagine the family doing more than treading water.
“Right now, the only way I can see getting ahead is by either getting another job or making more hourly,” she said.
As the middle class continues to shrink, situations like Orosco’s are increasingly common. In San Diego County, roughly 38 percent of households with working-age residents can’t pay for basic needs without government assistance, according to a new report from CPI. That’s up from roughly 30 percent in 2007, before the recession.
“We’re moving in the wrong direction,” San Diego City Council President Todd Gloria said at a rally last week. “No one who works in a full-time job should be unable to pay for basic shelter and food. Full-time work should lift you out of poverty, not keep you in it.”
His rhetoric follows a game plan laid out by Democrats on the state and federal levels: Increase the minimum wage.
Joined by Councilmembers Marti Emerald, Myrtle Cole and Sherri Lightner, Gloria announced last Wednesday a campaign to place a city-sponsored initiative on the November ballot that would increase the minimum wage.
“No one who works full time should live in poverty,” Emerald said. “Raising the minimum wage will make a positive difference in all of our lives, not just the tens of thousands of people who are struggling to get by.”
The proposed initiative would also guarantee workers up to five earned sick days, officials said. About 44 percent of workers in the region accrue no sick leave at their job, according to the Institute for Women’s Policy Research.
“There is no doubt that access to earned sick days creates stronger and safer workplaces,” Emerald added. “As consumers, do we really want to walk up to a counter or sit down at a restaurant and have the person serving us sick?”
The extent to which a bump in the minimum wage will help working folks will likely depend on the size of the increase, and the fight to determine that number has yet to begin. The city of San Diego has no wage requirement beyond the current state-mandated $8 an hour.
“Honestly, I don’t have a figure that I’m wedded to,” Gloria told CityBeat after the rally. “This is going to be part of a public process where we hear from everybody. I think, ultimately, what we’ll try to pick is what can get through the City Council, and then what we think the voters will ultimately adopt.”
In a commentary on raising the minimum wage published in U-T San Diego in January, Gloria quoted an estimate from the California Budget Project that calculated a “modest standard of living” in San Diego costs at least $34,253 a year, or $16.47 an hour.
At the same time, a lot depends on a person’s situation. To meet basic needs without government assistance, an adult in the San Diego region must make about $13 an hour, according to the CPI study. However, add a preschool-aged child into the mix and that number jumps up to more than $25 an hour.
Tens of thousands of San Diegans are living below this “self-sufficiency standard,” according to the CPI study. More than one in five area households with a full-time breadwinner, about 113,000 families, cannot make ends meet without government assistance. For single mothers, it’s more than 72 percent.
Numbers like these are partly why a growing group of government officials have recently backed minimum-wage increases across the country. After more than five years, the California Legislature voted last fall to incrementally raise the minimum wage to $9 an hour this summer and then to $10 an hour, or $20,800 a year, in 2016.
At the federal level, President Obama has campaigned to boost the federal minimum wage from $7.25 an hour to $10.10.n However, Congress has shown little willingness to take up the issue.
As it stands today, Washington state has the highest minimum wage at $9.32 an hour. Of the 21 states that have minimum-wage requirements above the federal level, California is tied for eighth, with states such as Colorado and Massachusetts. The highest hourly minimum wages are in cities, such as San Francisco, where it’s $10.74, and Seattle- Tacoma, Wash., where it’s $15.
Bumps to the minimum wage often face opposition from business groups, such as the California Chamber of Commerce, which attacked the state’s minimum-wage hike as a “a job killer.”
In a widely distributed press release blasting a minimum-wage increase for the city of San Diego, Jerry Sanders, president and CEO of the Regional Chamber of Commerce, said, “Any proposal by the City Council to add an additional increase on top of the recently approved $10-an-hour increase by the state will put San Diego at a further competitive disadvantage. The City Council’s proposal should be reviewed by an independent third party to understand the economic impact an additional increase will have on our local economy and businesses.”
The San Diego County Taxpayers Association and the conservative lobby group The Lincoln Club of San Diego County declined to comment.
In response to a CityBeat request, Mayor Kevin Faulconer provided this statement through a spokesperson: “As mayor, it’s my job to grow our local economy and protect the jobs San Diego families rely on. I would hope that our City Council adheres to those same priorities as they move forward.”
Asked if the Mayor’s support is necessary to put a minimum-wage initiative on the November ballot, Gloria said, “I would like to have his support. I think this effort would be even more successful if we had his support, and we’ll discuss it with him. I’m sure he’ll have strong feelings about this.”
Many in the business community have expressed support, Gloria added. “All the meetings I’ve had, everyone, maybe with one exception, said this should happen,” he said. “They get that $8 is too low, that $10 in three years is not enough. The question is, what’s the dollar figure that doesn’t harm them too much? What’s the phase-in to get to that dollar amount that makes a lot of sense?”
Minimum-wage advocates should also expect pushback from the city’s tourism industry, including hotels and restaurant owners. More than half of hotel, restaurant and recreation workers in the region don’t make enough to survive without government assistance, the CPI study concludes. The retail industry trails close behind with about 38 percent of workers struggling to pay for their basic necessities, such as food, rent and health care.
The campaign to boost San Diego’s minimum wage is in the “very beginning,” said Robert Nothoff, research and policy analyst for CPI. “They’re going to claim it’s a job killer, that it’s bad for business. We’re going to make sure that we have our studies and the data that show the benefits.”
So, will an increase to the city’s minimum wage help lift folks out of poverty or will it prompt businesses to cut hours and eliminate positions? If you ask a dozen economists, you get 13 answers.
One thing to consider is that the federal minimum wage, when adjusted for inflation, has been significantly higher in the past, according to data from the U.S. Bureau of Labor Statistics. In 1968, the country’s hourly minimum wage peaked at roughly $10.75 in today’s dollars. Since then, the buying power of the minimum wage has steadily declined, reaching a low point in 2007, before rebounding slightly.
However, on the city level, raising the minimum wage prompts concerns that neighboring municipalities with lower wage requirements might lure businesses away.
Lifting the minimum wage will likely “redistribute poverty” rather than reduce it, as businesses either move jobs or eliminate positions, said Joseph Sabia, professor of economics at San Diego State University.
“Among the narrow sliver of poor and near-poor workers who would be affected by the higher minimum wage, those who keep their jobs after a minimum-wage hike may see modest income gains, but those who lose their jobs will see dramatic earnings losses,” he said.
Counter-intuitively, a minimum-wage increase is more likely to help the middle class than the struggling poor, Sabia argued. “In contrast to the myth that a common minimum-wage worker is a poor single mother struggling to make ends meet, the typical minimum-wage worker is actually a second or third earner in their 20s from a non-poor household.”
On the other hand, Alan Gin, professor of economics at the University of San Diego, supports a minimum-wage increase, arguing that while not all workers will benefit, it would help more people than it hurts.
“Since the mid-’90s, there’s been just a spate of research done on the minimum wage, because prior to that, everyone was under the assumption that economic theory said employment should decrease,” he said. “But a huge amount of studies have shown that the effect on unemployment is small to insignificant.”
Studies looking at adjacent cities where one has a higher minimum wage have found “no difference in terms of the employment situation,” Gin added. “There are other factors that impact where people locate.”
A major issue driving talk of minimum-wage increases on both the local and federal level is the idea it would help the overall economy. Some economists argue that the increase to workers’ income will be quickly pumped back into local businesses. To this point, Walmart recently announced it might support a federal minimum-wage increase.
“Even though they’d have to pay their employees more, they’re seeing their sales hurt right now because of sluggish income among lower-income people,” Gin said. “It will give people more money at the lower end, and the people on the lower end tend to spend almost all their money. So, that should have ripple effects throughout the economy.”
A wage increase could also help small businesses that pay workers more than the minimum, Gin added. “It would help level the playing field. Right now, they’re under heavy pressure from these low-cost big chains. If Walmart had to increase its wages, that would make it easier for some of these small businesses to compete.”
The debate will continue at a meeting of the City Council’s Economic Development and Intergovernmental Relations Committee on Monday, March 24. It starts at 9 a.m. on City Hall’s 12th floor (202 C St.). Elected officials will hear testimony from residents as they craft a ballot proposal to be forwarded on to the full City Council.