Tuesday 27, 2015, Sacramento City Council voted for a citywide by minimum wage increase. This incremental increase will raise the city’s minimum wage to $12.50 by 2020. The plan for incremental increase follows as; $10.50 Jan 1st, $11 Jan 2018, and $11.75 Jan 2019.
The benefits of a minimum wage increase are adjusting income to inflation and the cost of living expenses. City Councilperson Eric Guerra stated the current cost of living in Sacramento to be $13 per hour. City Council recognized increase prices in the Consumer Price Index (CPI) made it necessary to increase the minimum wage. These include the rent prices, groceries, and transportation costs. Many members of city council stated that the current minimum wage was insufficient for families to live in Sacramento.
Mayor Kevin Johnson noted income inequality as a statewide and nationwide issue. The local NAACP Organizers supported the wage increase.
Possible disadvantages. A raise in minimum wage can increase unemployment by reducing the number of people a firm will hire and the amount of hours they will allow them to work.
This plan also includes clarifying healthcare, training provision, extend small business phase in, and correct CPI index.
This proposal was approved, 6 to 3, after over 2 hours of discussion by council, members of the proposal’s task force, and the public. Several members of city council voiced concerns over the details of the proposal by were able to reach a compromise. “Some high profile local businesses were concerned about the profit loss to wages because they are still only breaking even after 15 years of business (Ryan Lillis, Sacramento Bee, 2015).”
It was surprising the number of local businesses that fought the increase. While many supported, there were 30 speakers on each side, support and opposition.
Sacramento was behind Fresno and Bakersfield in adjusting to cost of living increases. At previous city council meetings speakers voiced concern about the cost of living increases that resulted from the Arena construction, specifically in the downtown and midtown areas.
One point of concern was the exclusion of tip earning service employees. The total compensation provision was removed. The Legislative Counsel ruled it illegal and threatened to sue. Exemptions for people with developmental disabilities up to age 25 have been removed. One allowance for employers that offer health insurance to reduce the wage by $2 did pass. Businesses with less than 100 have one year to make the changes (Ryan Lillis, Sacramento Bee, 2015).
Many people supported further economic development in addition to a minimum wage increase. It is not only important to pay working people more, developers must also create new jobs for the growing population and those currently looking for work or only working part time.
Mayor Kevin Johnson has been particularly conscious of the importance of economic development with the Arena, Oak Park Development, and Promise Zones in Sacramento. It is possible to pay people more and offset the economic disadvantages by creating more jobs that can pay the new minimum wage.
This increase supports people with disabilities and received support from State Senate Candidate Mariko Yamada and Richard Pan.