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​Minimum Wage Momentum Shifts from the Federal Level to States and Cities – How San Francisco is Taking the Lead  

By Ashley Kaplan, Esq. on 5/11/2014
higher minimum wage

Fishermen’s Wharf, Lombard Street, the Golden Gate Bridge, Ghirardelli Square … San Francisco is known for its many amazing landmarks and points of interest. It’s also recognized as one of the most expensive cities in the U.S., due to its high cost of living. For this and other reasons, the argument for increasing the minimum wage is especially robust in this city by the Bay.

At the same time many states and local municipalities are taking a legislative stand and boosting their minimum wages, San Francisco is pushing to get the Minimum Wage Act of 2014 on the November ballot. Developed by a group of community and labor advocates – called the Coalition for a Fair Economy – the proposal would increase the minimum wage in San Francisco to $15 an hour. Currently, the city’s minimum wage is the highest in the nation at $10.74 an hour, as of Jan. 2014. (The amount is adjusted annually based on the regional consumer price index.)
Under the proposed initiative, companies with more than 100 employees would have until 2016 to raise the minimum wage to $15 an hour, with an interim goal of $13 by Jan. 2015. Businesses with fewer than 100 employees, on the other hand, would have until 2017 to reach the $15 target, with increases of $13 an hour by 2015 and $14 by 2016.
In addition to a nearly 40 percent increase in minimum wage, the initiative would reinstate the annual cost-of-living increases established in 2003 and create a seven-member “Employment Standards Oversight Committee” to ensure enforcement of the minimum wage in San Francisco.
While the minimum wage debate rages on and we await the outcome of this ballot initiative, companies like Gap, Inc., based in San Francisco, are making headlines for increasing their minimum hourly rate. In early Feb., the clothing retailer announced it would set $9 as the minimum rate in 2014 and $10 in 2015. The move is expected to affect 65,000 of the retailer’s 90,000 U.S. employees, covering individuals at Banana Republic, Old Navy and other Gap-owned stores.
The company-wide rate hike won’t affect workers in the Bay Area, who already earn at least $10.74 an hour, but it represents a sizable boost for employees in states where the minimum wage falls below the company rate. What employers need to keep in mind, however, is that when the minimum wage varies between a state and a county, city or, in this case, company, the amount that most benefits the employee prevails. This impacts the hourly rate you pay employees, as well as situations where employees work overtime and must be paid time and half.
So why does San Francisco matter in the minimum wage debate? In the face of strong resistance to a federal-level wage hike of $10.10 an hour, advocates of higher minimum wages are quick to point out the success of cities like San Francisco that act independently on the issue. More than a decade ago, the city made history for raising the minimum wage above the federal standard. Since then, San Francisco has reported steady employment growth that surpasses all its surrounding counties. Not only did a wage hike not discourage employers from hiring (a common argument), but it also helped companies save money due to greater employee loyalty and less turnover.
With San Francisco serving as a positive model for change, we can expect more cities to follow its lead and explore the economic and employment advantages of a higher minimum wage.
Labor Law