City of Oakland Measure
Shall Oakland's Municipal Code Be Amended To: (1) Establish A Citywide Minimum Hourly Wage Of $12.25, To Be Increased Annually To Address Inflation; (2) Require Employers To Provide Employees Paid Sick Leave; (3) Require That Hotel, Restaurant And Banquet Facility Operators And Employers Pay Service Charges They Collect To Employees Providing Those Services; And (4) Provide Employees The Right To Bring An Action Against Employers To Enforce And Seek Remedies For Violation Of This Ordinance ?
Percentage Needed to Pass: 50% + 1 (Majority)
In early June, 2014, a coalition of low-wage workers, unions and community organizations called Lift Up Oakland collected over 30,000 signatures to put a minimum wage hike on the ballot. The measure will raise the minimum wage to $12.25 beginning in March, 2015. Under Measure FF, there will be no gradual phase-in, no exceptions for non-profits or small businesses, and the minimum wage would continue to increase with inflation each year.
So what do you do when you’re a city councilmember and you want to prevent this measure from passing? You try to get your own ordinance passed before voters can weigh in, of course.
And that is exactly what happened. Back in July, Oakland City Councilmember Pat Kernighan and Councilmember Lynette Gibson McElhaney proposed an ordinance that called for a gradual increase in minimum wage, starting at $11 an hour on July 1, 2015, increasing to $13 an hour on July 1, 2017, and going up to $15 an hour on July 1, 2021. Small businesses with fewer than 15 employees, youth-in-training programs, apprenticeships, and non-profits would only be required to raise their minimum wage to $10 an hour, followed by $11.50, then $12.95 on July 1, 2021.
The current minimum wage in Oakland is $9 an hour, which will rise to $10 an hour on January 1, 2016, regardless of whether or not Measure FF passes, in accordance with California state law.
Both the ordinance and the ballot measure also call for paid sick days. The gradual ordinance allows employers to cap paid sick leave at five days a year, while Lift Up Oakland’s proposal allows caps at five or nine paid sick days, depending on business size.
The debate around how—and by how much—to raise the Oakland minimum wage has been a source of contentious debate amongst business owners, city councilmembers, the Chamber of Commerce, and a variety of Oakland workers’ rights groups.
The critics who sought to block Lift Up Oakland’s measure worry that it could unintentionally hurt small businesses, nonprofits and job-training programs for youth. According to a memo from councilmembers Kernighan and Gibson McElhaney, the Lift Up Oakland measure would be “too big a cost jump for some types of employers to absorb in an 8 month period and thus would cause unintended negative impacts on those employers, several sectors of our economy and a significant number of Oakland residents.” As a parenthetical note, Gibson and Kernighan wrote “I have already heard from one such provider of day care for hundreds of frail elderly seniors that the program could not continue operating if the wages for their care workers increased by an additional $3.25 an hour in the coming year.”
Critics of the measure also cited a study by a Berkeley Haas School of Business alum, Linda Hausrath, on the potential effects of the wage hike on the business sector. “In 13 out of 15 of the business categories,” she writes, “the labor increase exceeded the entire profit margin and in most of them it was more than twice the profit margin…. Many of the small businesses in our districts serve a lower income clientele and cannot raise prices by up to 12% in order to break even. They will have to lay off employees or perhaps close altogether.” The memo also cites other city established and proposed minimum wage ordinances, in Berkeley, San Francisco and Seattle, noting that all have chosen to phase in a wage increase over multiple years.
Hausrath Economics Group. (2013). Economic Impact Assessment of Proposed Minimum Wage Increase in Oakland.
Supporters of the measure say these claims are false, or at best unconvincing. According to a study conducted at the Institute for Research on Labor and Employment at UC Berkeley, the Lift Up Oakland measure would directly benefit minorities and workers of color, who make up about 62.1 percent of the total workforce in Oakland, but in fact represent about 78.7 percent of workers who would be affected by a minimum wage increase to $12.25. Their prediction, contrary to what opponents suggest, is that the “increase would have a modest impact on business operating costs and consumer prices. Research evidence indicates that the costs of a higher minimum wage are absorbed through reduced worker turnover, improved worker performance and small one-time increases in restaurant prices.”
And how big would that price increase be, exactly? Restaurant prices would increase by 2.5 percent. In other words, a $10 meal would increase to $10.25. For retail prices and the local economy as a whole, the researchers argue, the increases would be negligible. “Operating costs would increase by 0.3 percent for retail businesses.” The researchers also cited three previous studies that found minimum wage increases to have little negative impact on employment, if any impact at all.
That said, given the competing forecasts from researchers and councilmembers, it remains to be seen what will actually happen to employment, development, operation costs, and livelihoods in Oakland if Measure FF passes. But what this debate has largely ignored is the variety of other provisions included in the measure.
Beyond the minimum wage hike, Measure FF includes several other provisions that were not offered in the Council ordinance: it prevents and prohibits wage theft, allows employees to bring cases against their employers, and prohibits “discharging, reducing compensation or otherwise discriminating against any person who makes a complaint to the City, participates in any City proceedings, or files a lawsuit for violation of this measure.” It also lets the City consider an employer's record of noncompliance with this measure when deciding whether to enter into City contracts with the employer. The ordinance proposed by the members of the city council did not include or mention any such provisions.
If employees can’t bring a case against employers for stealing wages, violating minimum wage requirements, or threatening to fire them for taking sick leave, then what’s the point of telling employers to increase wages in the first place? What are rights without enforcement and protection? If we really want to protect our workers, we have to do more than increase their wages. That’s where Measure FF comes in.