The Sacramento City Council approved an increase in the city’s minimum wage Tuesday night by a 6-3 vote after a last-minute compromise emerged on the plan and protesters created a tense scene at City Hall.
The new proposal, released as a City Council hearing started, removed controversial exemptions from the original plan but kept the wage numbers the same. The plan still called for the minimum wage to increase to $12.50 an hour by 2020, with increases after that date linked to the Consumer Price Index.
While the compromise plan earned the support of some key interest groups, labor groups and low-wage workers blasted the proposal. Two protesters were taken into police custody, including one woman who yelled, “I’m pregnant” as she was led out of the City Council chambers in handcuffs.
Mayor Kevin Johnson, Councilman Jay Schenirer, and business and labor leaders worked out the compromise in recent days, according to a source with direct knowledge of the negotiations. Leaders of the Sacramento Metro Chamber of Commerce and the political advocacy group Region Business testified in support of the plan.
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However, Fabrizio Sasso, head of the Sacramento Central Labor Council and a member of the task force that released the original plan, urged the City Council to vote against the new compromise. Some small-business owners also criticized the proposal.
“I’m not accepting a proposal nobody’s seen,” Sasso said in an interview. “They shouldn’t vote in haste. They should study this and the impacts of it.”
He added during the council hearing that the proposal would “increase income inequality in our city.”
Johnson, Schenirer and council members Allen Warren, Jeff Harris, Rick Jennings and Larry Carr voted for the proposal. Council members Angelique Ashby, Steve Hansen and Eric Guerra voted against the plan.
While the minimum-wage increase in the most recent plan remains unchanged, the proposal does not include a “total compensation” provision from a proposal released last month that would have allowed businesses to pay the lower state minimum wage if they could prove employees took home at least $15 an hour with tips. That provision had been deemed illegal by the state Office of Legislative Counsel, and two workers’ rights groups threatened earlier this month to sue the city if the stipulation was approved.
In addition to the total compensation section, other exemptions in the original proposal also have been removed. Those include exempting employers from paying minimum wage to the following sets of workers: those under the age of 18, some employees with developmental disabilities and employees up to age 25 who are in job training programs “or part of re-entry or release job training programs operated by nonprofit corporations or governmental agencies,” according to a city staff report.
A new provision of the proposal would allow employers to pay $2 an hour below the minimum wage if they provide health care to workers. Credits also would be available to businesses that provide job training to employees.
If approved, the minimum-wage increase would start with a boost to $10.50 on Jan. 1, 2017, $11 an hour in 2018 and $11.75 in 2019.
The wage increase schedule for small businesses also changed.
Businesses and nonprofits with fewer than 100 employees would have to pay the new minimum wage one year after other businesses. The previous proposal had allowed businesses with fewer than 40 employees a six-month delay.
In addition to labor leaders, the operators of small businesses – including Relles Florist, Revolution Wines and the Esquire IMAX Theatre – testified against the proposal.
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“This change will add $100,000 to our bottom line,” said Doug Link with the Esquire IMAX, adding that the theater has barely broken even over the past 15 years.
Another speaker, Brenda Ruiz, criticized the City Council for presenting an altered plan the day of the vote. “Are we going to draw it up right now?” she asked. “Let’s get out the cocktail napkins and some Sharpies.”
Business groups, some of whom had opposed the previous proposal, ended up supporting the last-minute plan.
Peter Tateishi, president and CEO of the Sacramento Metro Chamber of Commerce, said “this is a more workable compromise.”
“We’re happy to see the exemptions have been corrected so more small businesses won’t be impacted,” he said.
Schenirer, who co-chaired a mayoral task force that spent weeks exploring a minimum-wage plan, presented the new proposal at the start of the City Council hearing. He acknowledged the changes would not have the support of all of his council colleagues or from many in the large crowd at City Hall.
However, Schenirer said doing nothing was “not acceptable to me.”
“It’s not perfect, it’s not even close to perfect, but I’m not willing to do nothing,” he said. “I don’t think Sacramento should sit around and wait for the state” to potentially raise the minimum wage.
The 15-member task force appointed by Johnson released the initial proposal in September. But support for the plan quickly faded, with major business and labor groups eventually voicing opposition to the proposal in recent days.