FREMONT — In an effort to protect businesses during the coronavirus pandemic, Fremont’s city council is considering delaying minimum wage increases it approved last year, frustrating some who say the move would harm essential workers and people already struggling in the pricey Bay Area.
Minimum wage in the city is set to increase on July 1. For businesses with 26 or more employees, it would increase from the current $13.50 per hour to $15 per hour. For businesses with 25 or fewer employees, it was set to increase from the state’s current minimum wage of $12 per hour to $13.50 per hour.
Fremont’s increases are ahead of the state schedule, as are the wage schedules of many Bay Area cities.
California’s minimum wage is set to increase to $15 per hour for large businesses on Jan. 1, 2022, and on Jan. 1, 2023 for small businesses.
Fremont Vice Mayor Rick Jones brought forth a proposal Tuesday to have city staff draw up an amendment to the city’s current wage ordinance, which would effectively delay the scheduled minimum wage increases by one year in the city.
The City Council by a 3-2-2 vote approved the proposal to have the amendment drafted. Jones, Mayor Lily Mei, and Councilman Yang Shao voted yes, while Councilman Vinnie Bacon and Councilwoman Jenny Kassan voted no, and two councilmembers, Raj Salwan and Teresa Keng, abstained from the vote because they own small businesses.
The council also directed city staff to come back at the May 12 meeting with a work plan that outlines how they would approach a study or analysis of the issue and the effects such a change could have on businesses, as well as how much staff time it would require.
“I think what this proposal is saying is let’s target those who are the hardest hit, the least wealthy, and make it even harder for them. And I think that’s the wrong way to go about it,” Councilman Vinnie Bacon said at the meeting.
“These are the essential workers, the people working at the grocery stores, the people cleaning up in the hospitals…and we’re basically saying ‘Sorry, we’re going to treat you a little worse.’ And to me, that’s insulting to them,” Bacon added.
Jones said he thinks the planned increase in wages “presents an obstacle to recovery” for local businesses, both those that are deemed essential and currently open, as well as those deciding whether they’ll reopen when health order restrictions are eased.
“So many of our businesses are struggling right now. I know there have been federal stimulus loans and those kinds of things that are supposed to be available, however those are not really coming through. So this is a very, very difficult time for small businesses,” he said.
Jones also noted that Hayward took action to delay their scheduled increases in minimum wage last month.
But Councilwoman Jenny Kassan, who opposed the idea, took issue with Jones’ reasoning, saying “small businesses are getting incredibly generous support right now” from federal programs like the Economic Injury Disaster Loan, and the Paycheck Protection Program.
“Yes, the money ran out the first time it was rolled out but people are getting it now,” she said of the PPP.
“There may be some businesses that are having delays in getting it, but it is being rolled out,” Kassan added.
“I just think this is the worst use of our time right now. There are so many things going on, the last thing we want staff doing is spending time on this,” Kassan said.
Bacon and Kassan echoed the comments of several people who called into the virtual meeting to oppose the idea.
Some callers suggested the city should consider directly supporting businesses that need assistance, instead of taking a planned pay raise away from working-class people.
“We don’t want to see more people suffering during this unprecedented pandemic-induced recession. It’s mind-boggling to me that we try to lift other people up, lift businesses up by taking away from other people,” Alex Lee, a candidate for Assembly District 25 said during the meeting.
“In a time like this, we should be thinking and brainstorming about ways to help more people,” he added.
Cindy Bonior, the CEO of the Fremont Chamber of Commerce, said she supported the idea of delaying the wage increase because “there are businesses that are closing their doors consistently,” and the ones taking loans now may need years to pay them back.
“We are in extraordinary times, and unfortunately, extraordinary times call for extraordinary measures,” Bonior said.
“It’s not a popular decision, it’s really not,” Jones said of his proposal.
“I understand the predicament, and so the only reason I brought this forward was to have staff do an analysis to determine how it’s going to affect our businesses in Fremont,” he said.
Mayor Lily Mei indicated she would lean toward keeping the increases as planned for large businesses, but said she wants to see an analysis before making a decision.
“I’d like to be able to delineate and better understand the impact both for our large businesses and small businesses,” Mei said.