The last-minute deal to raise Sacramento’s minimum wage is, on balance, a positive step to help the working poor.
But what was the big rush to vote on the compromise, which wasn’t made public until Tuesday night’s City Council meeting and which doesn’t take effect for 14 months?
It may have been decisive to go ahead and get the 6-3 approval since the votes were there. It is not a smart way to make policy on such an important issue – and it will worsen the divisions that were on display at the meeting, packed with protesters and police. Indeed, advocates said Wednesday they plan to seek a ballot measure in November 2016 to increase the city’s mininum wage to $15 in 2020.
While a few key business and labor groups had a seat at the table for the final, private negotiations, others did not. It would have been far better to give enough time for all the various interest groups – not to mention the public – to digest the new deal. Even another week or two would have been helpful.
Mayor Kevin Johnson, who voted for the plan, got personally involved in the deal-making, which wasn’t concluded until Monday. But his task force on income inequality, which released the initial recommendations in September, didn’t vote on the new plan, though most members support it.
The approved ordinance keeps the same schedule of wage increases, on top of the scheduled statewide increase from $9 to $10 an hour on Jan. 1. Barring further state action, Sacramento’s minimum will rise to $10.50 on Jan. 1, 2017, and eventually reach $12.50 in 2020. Someone working full-time at the minimum would get a $5,200 annual raise to $26,000 a year, enough to lift many families out of poverty.
The new plan drops the old one’s most contentious provision – a “total compensation” exemption that would have allowed restaurants and other businesses to avoid paying the higher minimum to employees who make at least $15 an hour when tips and commissions are counted.
The approved proposal also makes other significant changes:
▪ More small businesses will get more time to pay the higher wages. Those with 100 employees or less won’t have to raise their wages for one year behind the schedule for larger companies. The previous plan gave businesses with fewer than 40 employees a six-month grace period.
▪ Employers will also get a bigger credit toward the higher wage for offering health care benefits, rising to as much as $2 an hour, up from $1.50.
▪ Thousands more workers will be covered. Exemptions for workers under 18 and some employees with developmental disabilities were dropped.
▪ After 2020, the minimum wage and health care credit will be adjusted to match cost of living increases, but based on an index for similar-sized Western cities, not the higher one for the San Francisco area.
That last tweak is a clear improvement, making the wage hike even more tailored to Sacramento than the $15-an-hour wages planned in San Francisco and Los Angeles. The impact of the other changes, however, is murkier. More time to vet the plan would have offered more answers.
It’s conceivable that the compromise might have crumbled, just like the previous one, if interest groups had had time to pick it apart. But a good plan should be able to withstand the scrutiny.
Instead, it was jammed through. However efficient, that’s not the right way for our elected representatives to do business.