Minimum wage workers in San Jose will soon witness a bump in their paychecks. An increase in the city’s minimum wage from $8 to $10 dollars an hour went into effect yesterday. The new law was approved by 59.6% of voters in November and applies to all workers who put in at least 2 hours in the city, even if their employers are based elsewhere.
So far, reactions to the law have been mixed. Nick Taptelis, General Manager of Philz Coffee, gives it his blessing. In fact, he already raised the minimum wage in his workplace to $10 last month, saying higher pay means greater morale and, consequently, a more efficient workforce. Other San Jose businesses like Pizza My Heart and AJ Detailing were also paying employees no less than $10 before the law took effect. Despite its initial opposition, the San Jose Downtown Association has embraced the inevitable as well, joining with the South Bay AFL-CIO, which helped lead the campaign for the measure.
Some businesses, however, are reacting just as critics of the wage hike warned. Camera Cinema and Pita Pit are among those cutting their hours. And 4th Street Pizza has already increased its prices to make up for the increase in costs. While proponents of the wage hike say a more ethical stance among consumers will help mitigate any damage, some simply aren’t willing to put such considerations above their bottom line. “…The whole reason I come here is because it's accessible, cheap and fast; if they raise [prices] up, I probably wouldn't go out of my way to stop there," customer Angel Avila said of a local taco stand. If enough customers follow Angel’s lead, this could be a bitter-sweet moment for minimum-wage employees in San Jose, with the advantage of pay increases being outweighed by a loss of hours or, even worse, employee layoffs.
Proponents of the minimum wage hike believe such fears are exaggerated. They’re counting on an increase in consumer spending by the very people now earning higher wages to mitigate any ill effects. To that end, they’re also encouraging higher minimum wage advocates to spend their dollars locally whenever possible.
The implications of the wage hike could reach beyond San Jose. Many today are viewing the city as a microcosm of a larger debate on minimum wage increases throughout the state and nation as a whole. In his last State of the Union address, President Obama pledged to help raise the minimum wage by 24%, reigniting a classic debate over the wisdom of minimum wage laws. Needless to say, cities like San Jose will be watched closely in the months ahead, as both advocates and opponents of minimum wages laws look to bolster their claims.
Read more about San Jose’s minimum wage increase here.