Redwood City is looking to become one of the first Bay Area cities to mandate a local minimum wage of $15 per hour at the start of 2019.
But by then, all or nearly all employers in the city may already be paying at least that much, according to a city official and a local Chamber of Commerce representative. They say the high cost of housing is what’s driving up wages.
Deputy City Manager Alex Khojikian said the city is still gathering data from local businesses as it prepares for a March 26 City Council hearing on the minimum wage proposal. But initial feedback shows many businesses are already at or near the $15 threshold, he added.
“In order to attract or retain workers, you almost need to have it there,” Khojikian said.
According to the San Mateo County Health System, the vast majority of employees in the county making $15 or less an hour are in the middle of their careers, and almost three-quarters of them are between 25 and 64 years old.
Latinos are three times more likely to earn less than $15 an hour than whites, the health system reported. The majority of workers in Redwood City, 73 percent, make more than $3,333 per month, while 18 percent make between $1,251 and $3,333 per month and 9 percent make $1,250 or less.
Amy Buckmaster, president of the Redwood City/San Mateo County Chamber of Commerce, said Khojikian’s findings mirror what she has heard from the organization’s members, but added that $15 an hour isn’t enough for most employees to live on in the city. The chamber has not formally taken a position on the minimum wage increase but plans to address the topic at its February board meeting.
“It’s not about getting to $15 (an hour), it’s about housing,” Buckmaster said. “A lot of our members from the business community are already doing it and have been doing it for a while. … You have to go above and beyond if you look at what rents are in comparison.”
According to Rent Jungle, an online rental search engine, the average rent for a one-bedroom apartment in Redwood City as of December was $2,787, or 3.7 percent higher than in December 2016.
The city’s current minimum wage matches the state minimum of $10.50 an hour for businesses with fewer than 25 employees and $11 an hour for those with 25 workers or more. The state minimum wage will reach $15 an hour in 2022 for employers with 25 or more workers and in 2023 for those with fewer than 25.
An alternative the council will consider at the March hearing would be to move to $15 an hour more slowly, according to city publicist Meghan Horrigan.
Buckmaster said the chamber board hasn’t yet taken a stance on wages because it has been focusing on housing and transportation initiatives throughout the county. She said the board was the first business organization to support the Home For All initiative led by county supervisors Don Horsley and Warren Slocum to close the county’s 26 to 1 jobs/housing gap.
“Minimum wage is a factor, but two critical factors for businesses large and small are housing and transportation,” Buckmaster said.
According to a staff report, increasing the hourly minimum wage to $15 will cost the city approximately $122,000, possibly more, to administer and enforce.
A community meeting on the possible minimum wage increase is scheduled for 7 p.m. Wednesday at the Veterans Memorial Center, 1455 Madison Ave. The city has a dedicated webpage with additional details at www.redwoodcity.org/localminimumwage.
If the city decides to increase the minimum wage, all businesses with employees who work at least two hours a week within city limits would have to raise the minimum wage to $15. The city would join 17 other Bay Area cities that are increasing wages faster than the state.
San Mateo, whose minimum wage is currently $13.50 an hour, will go to $15 in January 2019. Belmont, whose new minimum wage of $12.50 goes into effect in July, will hit $15 in 2021.