I remember making minimum wage, $3.35 per hour, when I worked at Burger King during high school. Most of my coworkers were high school students, college students and very few were adults. Prior to my job at Burger King, I had a paper route that, according to my memory, netted out to less than minimum wage. In the case of the paper route, I had to pay for the newspapers, rubber bands, and bike expenses, not to mention my time to fold and deliver the newspapers. In addition, back then we had to go door to door to collect the monthly subscription.
Over time, I received raises at Burger King by passing tests on food preparation and positive performance evaluations. Merit-based raises of 10 cents were earned, and I achieved my top rate of $4.15 and a promotion to Production Leader. I recall enjoying the job except for the increased acne from working the fryer station and those ever-attractive brown polyester uniforms. Around this time, I actually contemplated quitting high school and pursuing a management position at Burger King. Instead, I stayed in school and went on to college like many of my fellow high school co-workers.
It seems like today that the opportunities for employment and taking on responsibility have decreased for our youth. The paperboy on a bike has turned into paperman in car. And Burger King-type jobs have changed from youth to adults, many of whom are recent immigrants.
I am voting “no” on Measure D, which would increase the minimum wage only in San Jose from $8 to $10 an hour. As a councilmember that represents a district that borders two other cities, I see firsthand how San Jose competes for retail sales, filling vacant commercial space and jobs. Westfield Valley Fair shopping center, for example, is split between Santa Clara and San Jose. If a new prospective tenant has a choice of space in the mall, they will choose Santa Clara should measure D pass, as I will explain.
Residents do not stop in their tracks when they reach the invisible border of a city limit. They shop based on convenience, quality and the big one—price. Measure D will put San Jose at a disadvantage just like the currently proposed Habitat Conservation Plan that Mayor Reed lampooned for over an hour at last week’s council meeting.
Measure D will create wage inflation. Workers that make $10 today will seek $12 tomorrow and so on. If a business only has so much money allocated for payroll, then the result will be laying off a certain number of employees or reducing hours to keep payroll in line with actual sales. I believe youth will comprise the majority of the layoffs and reduced hours. Measure D, which is a 38 percent increase in payroll (wages & payroll taxes) to employers who pay minimum wage, would not increase sales 38 percent nor even 1 percent.
A business in San Jose that employs minimum wage workers will simply have less profit margin and some of them will inevitably move. In the case of my district, these businesses will move just over the city border and those that remain in San Jose will increase prices. My dad, who grew up during the Great Depression, will drive to another city just to get a free plastic bag. When prices increase, my dad, who could easily win the game show, “The Price is Right,” will simply shop in another city.
Those that make $10 today instead of $8 are either performing well or have a more difficult job, which is why they make 25 percent more. Is it fair that the current $10 a hour worker would now be equal to a $8 hour worker? Does it create the expectation for future two-dollar wage increases through no effort of the individual? That is a debate in itself, however, the real problem is that San Jose is not a silo and we are surrounded by other cities.
Measure D would create retail vacancy in San Jose, especially near the border of other cities. Over time, new business will choose cities where payroll costs are lower and, most importantly, where their payroll is not regulated and audited by city government. For San Jose to comply with Measure D requires the hiring of people to oversee and regulate business for compliance with no revenue to pay for those new positions. I would much rather higher five new people in our planning department to expedite the process for industrial and commercial development than positions that add zero value, which Measure D would mandate.
The few cities that have raised the minimum wage are anomalies bordered by water or desert: San Francisco, Washington D.C. and Albuquerque.
To my original premise, I believe Measure D will result in less jobs for youth in San Jose. Employment for youth outside of compensation provides the opportunity to learn valuable life lessons.
On a related note, the majority of my council colleagues voted—but not me—to discuss and take a position on various State Propositions like the Death Penalty at this week’s council meeting. In my opinion this is a waste of time that has nothing to do with the City Charter and we might as well discuss, how many angels can dance on the head of a pin.
Pierluigi Oliverio is a San Jose councilmember for District 6.