Minimum wage in The City to increase 3.6 percent in ‘07 

S.F.’s high cost of living cited as rationale for adjustment

Beginning Jan. 1, San Francisco’s lowest-paid workers will receive a 3.6 percent raise, bringing their hourly rate to $9.14.

Since 2004, The City has required employers to pay workers a higher minimum wage than the rest of California, after city voters approved a minimum wage law at the polls in November 2003.

Business groups had lobbied against the law, saying the financial burden would force some businesses to close down, especially restaurants and others in the service industry, which employs a majority of San Francisco’s minimum wage earners.

The law set The City’s minimum wage at $8.50 and required annual adjustments based on the Consumer Price Index for urban wage earners in San Francisco, Oakland and San Jose — numbers put out by the U.S. Department of Labor. In the first year, only businesses with 10 or more employees had to pay the new minimum wage.

In 2005, The City’s minimum wage increased to $8.62, and businesses with fewer than 10 workers and nonprofits were required to start paying their workers this rate as well. In 2005, California’s minimum wage was $6.75.

This year, the lowest amount employers could pay their workers in San Francisco was $8.82.

The 3.6percent CPI adjustment "provides The City’s workers with more purchasing power," Mayor Gavin Newsom said in a statement.

"Overall, as people make more money, they are more healthy and put more money into the economy and in general things get better," Deputy City Controller Monique Zmuda said.

Nathan Nayman, executive director of the Committee on Jobs, a group representing the interests of The City’s largest employers, said businesses would pass on the extra cost to consumers. Even though workers will have more money in their pockets, their purchasing power will not increase because things will be more expensive, he said.

Katie Salas, of Young Workers United, said it makes sense for San Francisco to have a higher minimum wage because The City is one of the most expensive places to live. "For someone who has to work a lot to live in The City and pay rent it is extremely important because it helps out that much more," Salas said.

Supporters say the wage increase also highlights the fact that many workers in San Francisco are being paid less than the minimum wage. Donna Levitt, head of The City’s minimum wage enforcement, said she receives an average of about five complaints a month. "There are a number of complaints where an employer didn’t pay the increases each year," she said. "But there are numerous instances where workers off the books are not being paid the minimum wages."

Levitt said The City would advertise the wage increases on Muni buses. Also, The City will notify 90,000 business by mail about the increase.

jsabatini@examiner.com

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