Starbucks, Developer Want to Bypass City’s Living Wage Policy

San Jose will consider skirting its living wage policy to appease a massive corporation and some developers. The City Council on Tuesday will discuss an appeal from Starbucks and other vendors to be exempt from the rule—they’re interested in leasing space at City Hall and the San Jose McEnery Convention Center.

The living wage standards, established in 1988, require contractors and vendors contracted by the city to pay employees equitably and sufficiently. These days, that translates to $15.78 an hour if the employer offers health benefits, or $17.03 if they don’t.

Developer Don Imwalle Jr., son of City Hall’s original developer, said he was concerned about having to pay that much if he helps fill in 6,000 square feet of now-empty storefronts along Fourth Street.

Starbucks—the biggest coffee company on the planet—said the same: Imposing wage requirements on a lease for a café outside the convention center would create a competitive hardship.

Shortly after the council memo got posted, union reps took to defending the wage policy in the Mercury News.

“Weakening living wage standards would put San Jose and its vendors in the same class of employer as Wal-Mart and McDonalds, who pay poverty-level wages and push their employees onto government assistance so that taxpayers subsidize them,” SEIU-USWW’s Mike Garcia and Unite HERE Local 19’s Enrique Fernandez wrote.

Several councilmembers—Sam Liccardo, Madison Nguyen, Rose Herrera—and Mayor Chuck Reed sided with Starbucks and Imwall Properties, saying the city should grant these multimillion-dollar companies an exemption to help the city fill up its retail space.

More from the San Jose City Council agenda for December 17, 2013:

• Santa Clara County missed its shot at a lease deal with the city. San Jose police asked the city to relocate the police helicopter from NASA Ames to the county’s Reid-Hillview Airport. When the county missed deadlines to pull together a lease agreement, the city had no choice but to write up a renewed lease agreement with NASA.

• The city’s on a talent search for an artist to work on a $480,000 public art installment at the under-construction Berryessa BART station.

Painting the San Jose/Santa Clara Wastewater Treatment Facility will cost $400,000.

• A contract going before the council will make sure all security guard companies contracted by the city pay their employees a wage consistent with the city’s living wage policy.

Rural/Metro, the financially embattled ambulance company that serves all county residents, owes San Jose $750,000 for employing city emergency services. The county will have to cover for the company, which recently filed for bankruptcy.

• San Jose’s about to help buy a defunct mental hospital to help a Santa Clara school district turn it into a high school.

• Plans to put a BMX park by Raging Waters moves forward this week. Consulting services alone will cost $500,000.

• When a developer wants to build in San Jose, the city asks for conditional improvements, like infrastructure, a park or something else in the public’s interest. Sometimes, the city accepts a fee instead, using the money to make an improvement without the developer’s direct involvement. Here’s an annual report of those exchanges, which the city calls its in-lieu fee program.

• All those copper wire thefts from public utilities will cost the city $500,000.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408-535-1260

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. What’s with all these exemptions for every fee, wage and whatnot that the City of San Jose has set?

    Too many exceptions and exemptions raises the issue of fairness.  If rules only apply to the little guy, then the little guy is getting screwed.

    San Jose is a city where the little guy gets screwed.

    • That is because the administration does not care about the “little guy”. That is also why it was/is so easy to screw over the employees…the “little people”. Voting any one of them in for mayor will bring more of the same. That is exactly what we do not need. We need people with fresh, new, honest ideas to move this city out of the mess and move it forward. We need people who understand fairness, honesty, equality and being open.

      • No this is because Chuck likes to screw the city employees as well.  Unless Chuck can make a buck he couldn’t care less about the rules.  Chucks way or the highway.

        When will the few voting public get it!  Most don’t even care to vote. This is the way of the current city council.  You get what you vote for.

  2. Why does the city need a police helicopter?  Work out a deal with the county, and share theirs. Take the money saved and hire more patrol officers on the ground.

  3. Ever wonder why some of the world’s most advanced economies (Austria, Denmark, Finland, Germany, Norway, Singapore, Sweden, Switzerland, UAE, etc.) DON’T have “minimum wage” laws?

    As JFK said some 50 years ago ‘A rising tide lifts all boats’ yet (some) people still don’t get it.

    • When you have low wages and a lot of social programs, the government is essentially subsidizing the companies that employ people at low wages.

      If you raise the minimum wage, do you think as many people would qualify for low PG&E rates, food stamps, subsidized housing, subsidized Obamacare, school meals and on and on.

      We don’t have a “free market” now, because the government is allowing companies to pay much less than they in a real “free market” We have to cut back on government assistance programs and get back to a real “free market”.

      • You’re exactly right. The ruling elite leftists have got it backwards. (as usual)
        Low wages don’t cause government assistance programs.
        Government assistance programs cause low wages.

    • You realize almost all of those places you mentioned have over 50% tax rates and government funded healthcare and schools up through college, Right?

  4. Thats why this city has been become the joke that it is ! because of all the exemptions that this corrupt Mayor allows to big corporations and his developer buddies.It will take years for San Jose to recover from what “Mr Burns” and this inept Council has done to this city

  5. City government has not one iota of business sticking it’s nose into the workings of a private business.  This wage issue is a faux peccadillo.  It isn’t a “living wage” point after all – jobs at this level are rightfully termed – Entry Level.  The runny nose, commie inspired union-istas have made up this heart wrenching fake label solely to garner sympathy from the public and get their reptilian claws into any piece of free market flesh they can.

    Jobs at this pay grade and skills set are for young people, such as high school students, just starting out in life. Typically they live at home and need/want to earn a bit of spending money to get the life experience of how money facilitates one through life.
    If some “grown” adult with a family is trying to make a “living wage” at this type of job he/she is delusional.

    Here’s the thing.  We have far too many grown adults entering the low-end job market expecting to earn enough to have all the great things life has to offer – home, car, paid vacations/benefits, etc – all from sweeping floors, pouring coffee and flipping burgers.
    The employee pool for this job is far too big to create a demand for this type of employee sufficient to offer a salary/benefit package of $17/hr.

    Plus there is pressure for a comprehensive immigration bill that would flood the job market with what ???  Ph.D’s in engineering?  No – another 15-20mm floor sweepers and burger flippers.

    Let’s hope the city council has some clarity of thought and considers this.  If the whiney living wagers truly believe their demands are realistic then perhaps they should go out, start a burger or coffee shop – pay their employees this living wage and try and compete in the REAL WORLD market place.

  6. > “Weakening living wage standards would put San Jose and its vendors in the same class of employer as Wal-Mart and McDonalds, who pay poverty-level wages and push their employees onto government assistance so that taxpayers subsidize them,” SEIU-USWW’s Mike Garcia and Unite HERE Local 19’s Enrique Fernandez wrote.

    Government mandated wage levels have ALWAYS been a subsidy for government employee unions, and unions in general.

    If unions “negotiate” a wage of, say, $25/per hour for a burger flipper, burger corporations might be tempted to hire two non-union burger flippers for $10/hour per.

    So, if the unions can lobby the government to force the burger corporations to pay $20/hour for non-union flippers, the unions have a much easier time of convincing the burger corporations to accept a union contract because the union is “only” $5 more and purportedly “happier” because they’re paid what they think they’re worth.

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