Menlo Park is surrounded by cities that have adopted minimum wage ordinances, and now, the City Council is considering passing such an ordinance here.
The council discussed the matter at its Tuesday, May 7, meeting.
"I would appreciate raising the minimum wage sooner rather than later," Vice Mayor Cecilia Taylor said at the meeting.
A 2016 state law established that the minimum wage in California will rise to $15 an hour by 2022, with future wage increases tied to inflation, as measured by each year's increase in the consumer price index, an indicator of living costs. However, other cities – many in the Bay Area – have taken their own steps to increase the minimum wage to $15 an hour before the state's mandate. Some of those cities are: Belmont, Cupertino, Daly City, Los Altos, Milpitas, Palo Alto, Redwood City, San Jose, San Mateo, Santa Clara, Sunnyvale and South San Francisco.
Most of the cities that have established their own minimum wages have set their baselines at $15 an hour, with increases each year based on the consumer price index. The maximum annual increase is 3.5%.
Even a wage of $15 an hour, however, falls short of what's been calculated to be a "living wage."
For a family of four, the living wage in San Mateo County is really about $24.30 an hour, assuming two adult parents are working, according to a living wage calculator developed by MIT. For a single-adult household, the living wage needed is about $20.60 an hour to meet its household needs.
Currently in the city of Menlo Park, according to Assistant City Manager Nick Pegueros, of the city's regular employees, the lowest hourly wage is $17.49, and among its temporary employees, it is $12.22. There are 53 employees who are paid less than $15 per hour. The weighted average hourly rate of temporary employees is $21.20 an hour, he said.
Some residents urged the council to move the process forward, and use the research that has already been collected by adjacent jurisdictions. Adina Levin, speaking for Menlo Together, an organization focused on addressing housing, transportation, environmental sustainability and equity problems in Menlo Park, stated: "We are not leading on this issue. We are trailing on this issue." She urged the council to "implement this as soon as possible."
Rayna Lehman, who lives in Menlo Park and represents the AFL-CIO Community Services San Mateo County Central Labor Council, pointed out in public remarks that many local businesses pay more than $15 an hour out of economic necessity to attract and retain employees in a highly competitive job market. The effect of higher wages in neighboring jurisdictions, she added, has been to stimulate local economies. "We spend our money where we live."
She continued: "Fifteen dollars an hour is $31,200 a year before taxes. Average rents in our city are pushing $45,000 a year, and they're rising."
While Menlo Park may look like an affluent city with a median annual income of $132,000, she said, about 20% of the city's families earn under $50,000 a year, before taxes, and they're struggling.
"It would take four $15-an-hour jobs to be fully self-sufficient in Menlo Park, so we support $15 (an hour) by 2020. The sooner the better," she added.
The effort is expected to require 1,941 hours of staff time and $268,612, with the biggest portion of time and costs going toward reworking the city's labor agreements, according to a staff report.
The ordinance could also trigger what Pegueros called the "upward cascade" effect. That happens when, as the result of labor contracts, higher-ranking employees have written into their contracts that they should receive a certain amount or percentage more than the lowest-paid employees. That, in turn, could impact the city's unfunded pension liability, he added.
Would apply to kids
Councilwoman Catherine Carlton said she felt that applying the ordinance to all labor done in the city seemed "a little draconian."
What about the kids who act as "mother's helpers" or step in to mow the lawn, who are happy to work for as little as $5 to $7 an hour? she asked.
"It's probably a violation of child labor laws," City Attorney Bill McClure responded.
However, he added, like most enforcement of these types of laws, enforcement is typically in response to complaints.
Pegueros indicated that the city would probably not prioritize ensuring that the "kids at the lemonade stand are getting paid minimum wage."
Carlton also expressed concerns about applying the ordinance to workers at nonprofits and government. "A lot of our nonprofits are barely squeaking by as it is," she said. "I don't want unintended consequences."
Fran Dehn, president of the Menlo Park Chamber of Commerce, agreed there should be outreach to businesses done, and that going door-to-door may be more effective than mailers or email lists for reaching the right people at smaller businesses in the city.
City staff agreed to work on the plan for the effort and bring it back to the council on its draft work plan on June 4.