Issue: Today’s federal minimum wage, adjusted for inflation, is over a dollar less than it was in 1968. As median rents rose over the past four decades and overall GDP grew, wages for those working the most difficult and undervalued jobs in our economy stagnated. The working class that built and maintains this country hasn’t gotten a raise in over a decade, a trend that is long overdue to be reversed.
Proposal: Thanks to the work of local labor activists and Supervisor Jane Kim, San Francisco currently has a minimum wage of $14.00 per hour, which will become $15.00 per hour in 2018. Progressive cities have led the way and set a model for a policy that now needs to be implemented nationwide, to raise the minimum wage.
Congress needs to follow the lead of cities like San Francisco and implement a living wage, that is beyond question. The current federal minimum wage of $7.25 is simply not a living wage. We need to raise the minimum wage floor nationwide to $15.00. The rise to $15.00 needs to be implemented over time – beginning with an immediate raise to $10.00 and then adding $1.00 each year – so as to not shock local economies and industries.
We then need to mandate that all counties across the country assess their cost of living, and pass mandatory minimum wage laws indexed to the cost of living. For example, the mandatory minimum wage in San Francisco County, Santa Clara County, or Los Angeles County could very well surpass $15.00 based on the cost of living. However, in places across the country that do not a comparably high cost of living, a $15.00 wage would be more appropriate.
This should not be left to the cities, otherwise we risk employment migrations that hurt other cities. For example, in Cupertino, CA there is a current minimum wage of $12.00 whereas right next door in Sunnyvale, CA there is a current minimum wage of $13.00. Therefore, employees want to work in Sunnyvale and not Cupertino, leaving Cupertino small businesses underemployed. We cannot allow this to continue, where hypothetically Cupertino could have a $17.00 minimum wage and Sunnyvale could have a $18.00 minimum wage. This is why we need the wage to be set at the county level.
Of course, frequent criticisms of the plan to raise our minimum wage are that any increase in an employer's payroll costs will undoubtedly incentivize some large corporations to cut costs by automating more jobs and will cause many already struggling small businesses to close its doors. Which is why, in addition to raising the minimum wage, we must implement a significant tax on any corporation that lays employees off while reporting increases in profits greater than the cost of raising their employees’ wages. Though the tax would serve to discourage minimum wage-inspired layoffs and hopefully would rarely have to actually be paid, any revenue would go towards workforce development or retirement benefits for employees laid off.
Furthermore, as we raise minimum wages we absolutely must provide tax cuts and tax incentives for small businesses, in order to incentivize hiring more employees instead of cutting hours. Small business owners create the majority of jobs in this country, and we need to encourage that. We have to be mindful that raising the minimum wage is only part of the equation, and the other part is ensuring that businesses keep their doors open. So for businesses with fewer than 50 employees, we advocate for a 3 – 5% cut in the taxes that small business owners report for their federal income tax purposes. Additionally, we advocate for payroll tax cuts for small businesses on all future new hires and a raise on payroll taxes of 1% on all businesses over 50 employees to ensure continued revenue for Social Security. We must do what we can to keep small businesses operating, so they can continue to employ millions across the country at a living wage.
Lastly, when minimum wages rise, property owners have raised the rent because they know that employees can now “afford” to pay more. With this rise in minimum wages, we must also stop these predatory rent increases by landlords. At the end of the day, if your rent goes up when your minimum wage goes up, you really aren’t taking home any more money for your family.