Minimum Rage

Fight For $15 moves to Petaluma and Santa Rosa after bruising battle in the City of Sonoma

After prevailing in the city of Sonoma, a local effort to jump start the state's 2023 $15 minimum wage mandate now moves to Petaluma and Santa Rosa, says local wage-equity activist Marty Bennett.

Last week the Sonoma City Council unanimously passed a local minimum wage ordinance that will see the city's minimum wage rise to $16 an hour by 2023. The effort was driven by the local umbrella-advocacy organization North Bay Jobs for Justice and opposed by a number of restaurants in Sonoma.

The labor push was designed to get a jump on the state's new minimum wage law which, by 2023, will see California's floor wage rise by stages to $15 an hour for companies that employ 25 people. Companies that employ more than 25 will be onboard with the $15 wage by 2022. The current minimum wage in the state is $11 an hour; that will rise by a dollar a year until 2023.

The California law that prompted the wage hike was opposed by a cross-section of industries in the state, including the state's restaurant lobby. The wage hike, when fully implemented, will raise restaurants' operating expenses by between 2 and 3 percent, according to industry analyses of its impact. In the restaurant business, that means customers could see higher menu prices to offset the impact.

The regional restaurant industry has also highlighted the economic fallout from 2017's catastrophic wildfires that struck the North Bay—and that an accelerated minimum wage rollout is the last thing they need right now as the region rebounds from the $14 billion in damage wrought by the fires. Conversely, Bennett highlights the benefits to restaurants insofar as higher wages mean a higher rate of employee retention.

Under California labor law, when there's a conflict between the federal, state and local minimum wage, "the employer must follow the stricter standard; that is, the one that is most beneficial to the employee."

The national "Fight for $15" was the backdrop that led to the 2017 effort in California to increase the state minimum wage, as the state push then became "$15 by 20."

Bennett says the campaign to encourage localities to get a jump on the 2023 mandate is driven almost entirely by the cost of housing in the region. According to online data, the median cost of a home in Sonoma County is $614,900 compared to a statewide average of $548,000 and a national average of $219,000.

In Sonoma County, the average rent for a one-bedroom apartment, according to data assembled by bestplaces.net, is $1,447, about $100 more than the state average and $500 more than the national average. The situation for families is even more challenging: a four-bedroom home rental in Sonoma averages $3,300 a month compared to $2,755 for the state as a whole and $1,800 nationally.

In opposition to Sonoma's action on raising the minimum wage, a consortium of restaurants brought in the legal firepower of the Littler Mendelson Workplace Policy Institute, which has positioned itself as a foil to much of the pro-$15 studies and analyses that have been undertaken since the state raised the minimum wage.

A June 3 letter from the law firm and a group of restaurants filed with the Sonoma City Council on the eve of the voted stressed that while the restaurants supported the council's efforts to increase the financial well-being and security of its residents and those working in the city, they opposed the local ordinance.

The restaurants—which included the Girl and Fig, Mary's Pizza Shack and HopMonk Tavern Holdings—argued that they shouldn't pay front-of-the-house employees the proposed minimum wage because they were already making more than the minimum wage when their tips were included in the tally of their hourly wage. The argued in favor of a continued "two-tier" wage structure and said that since the state minimum wage doesn't apply to all employees, nor should a local minimum wage.

The restaurants noted for example that the "vast majority of California cities with minimum wage ordinances potentially may not cover unionized workers," given that most localities in the state have laws that "allow unionized workers to waive all or part of an ordinance's requirements via collective bargaining."

The restaurants also argued that Sonoma could have limited the scope of the ordinance without sacrificing the council's goal of ramping wages for its local workforce. California is one of seven states that prohibits employers from considering tips when determining whether an employee has earned at least the minimum wage, they note. "As a result, tipped employees in California are economically better off than their counterparts in most other parts of the country."

The restaurants then encouraged the council to establish one minimum wage for so-called "back of the house" employees and another, lower minimum wage, for tipped employees. Citing state law, the council rejected the restaurants' lawyers efforts to enact the tip credit.

The nine signatories to the June 3 letter did not prevail, and Bennett at Jobs for Justice is unsurprisingly not moved by the bad-for-business arguments advanced by Sonoma's local restaurants.

Now he says the local effort to get a jump on 2023's state-mandated $15 an hour wage moves to Petaluma and then to Santa Rosa. Bennett's cautiously optimistic, he says, that restaurants and businesses in Petaluma will be more amenable to accelerate the minimum wage hike, even if at least one of the signatories to the Sonoma letter (Mary's Pizza Shack) has an outpost in Petaluma.

Bennett says small businesses have told him they support the $15 minimum wage by 2023, and in a report on Jobs with Justice's efforts, the head of Petaluma's Chamber of Commerce, Onita Pellegrini, told the North Bay Business Journal in February that "We are all very much aware that the minimum wage is not anywhere near to a living wage." Whether or how that sentiment translates into on-the-ground ordinances remains to be seen, though Bennett says that, at the very least and unlike the experience in Sonoma, the Petaluma business community has so far been neutral on the accelerated plan to get to $15 before 2023.

Bennett's been reading the tea leaves in Santa Rosa and is cautiously optimistic that the city's at least taking up the issue in a public workshop scheduled for this summer.

City officials in Santa Rosa like councilman John Sawyer have expressed concern over the potential impact a minimum wage increase could have on downtown Santa Rosa's bustling restaurant-and-retail scene—especially in the aftermath of wildfires.

But it's not just restaurant workers who would benefit from an enhanced minimum wage. According to numbers assembled by the Massachusets Institute of Technology's "Living Wage Calculator," California workers in the food preparation and service industry earn an average of $25,234. Workers in the region's farming, fishing and forestry industry make about $1,000 less a year on average.