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Supervisor Sheehy proposes $16.86 minimum wage for city-contracted employees

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An SEIU union member shows off a sticker at the Board of Supervisors Budget and Finance Committee on Thursday, April 12, 2018. (Kevin N. Hume/S.F. Examiner)

San Francisco’s lowest paid workers under contract with The City could see their minimum wage increase to $16.86.

The Board of Supervisors Budget and Finance Committee postponed a vote on the proposal Thursday, largely over cost concerns, but agreed to try and work out a compromise in two weeks that would benefit airport employees, nonprofit workers and in-home care providers.

Tim Paulson, executive director of the San Francisco Labor Council, expressed frustration over the proposal not advancing at City Hall. “We are very frustrated,” Paulson said. “The priority for the budget should be for workers who are being driven out of town.”

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Labor leaders and employees in the impacted jobs argue the minimum wage is far from a living wage in the costly Bay Area and that, historically, they have received a higher rate than the private sector minimum wage, which hits $15 on July 1.

Supervisor Jeff Sheehy introduced the proposal that would increase the minimum wage by $1.86 beginning July 1, a 12 percent increase, for workers covered by The City’s minimum compensation ordinance. The City Controller’s Office estimated it would cost The City $44 million next fiscal year, if approved.

“$15 an hour. Yes, that’s good. But can you really live in San Francisco on $30,000 a year? Can you raise a family? Can you own a house? Can you afford rent?” said Sheehy, who is up for election in June. “It’s just not acceptable that we do not do everything we can to pay them enough money to be able to survive in San Francisco.”

Despite calls from labor leaders and employees to send the proposal to the full board for a vote, the committee, chaired by Supervisor Malia Cohen, said it needed more time. Cohen suggested making the raises for nonprofit workers contingent on new revenue, such as the passage of Proposition C in June, which would tax commercial rents for childcare but also provide funds for general uses.

“We have to find a way to pay for it,” said Supervisor Catherine Stefani. “I want to be able to find a revenue stream to be able to fund this. I definitely think that we need to be very responsible about where we are going to get the money from.” She mentioned that a possible November cannabis tax could help fund the effort.

Supervisor Jane Kim, who co-sponsored the legislation, noted at the hearing that “conversations have largely stalled in terms of how to move this incredibly important initiative forward” and that the “biggest conversation piece of course is how we fund it.”

Kim said she was open to tying a portion of the raises to the passage of the measure but didn’t think it was good policy to make the full increase tied to new revenues. She noted that The City is negotiating a contract with police officers.

“We are not asking our police officers to go the ballot to find new revenue to raise their wages,” she said.

The largest portion of the cost increase is attributable to raising the minimum wage for some 20,000 in-home supportive service workers, largely women of color, which accounts for $22 million, plus an additional $9 million for paid time off. The remaining $13 million is attributable to nonprofit workers, who perform work as desk clerks or janitors in supportive housing for the homeless or at shelters.

The pay hike for airport workers would not have an impact on The City’s General Fund, and the costs would be absorbed by the airport, which is an enterprise department. These workers are employed in jobs like security guards, food stockers, janitors and baggage handlers.

Workers covered by the proposal are represented by SEIU 1021, SEIU 2015, Teamsters and SEIU-United Service Workers West.

“We have members who work two jobs and actually have to sleep at the airport in their cars,” said Jane Martin, of SEIU-USWW, which represents 2,000 workers at San Francisco International Airport. “This shouldn’t be happening in one of the wealthiest cities in the entire world.

“I’ve heard a lot of folks say there is a big price tag to this legislation,” she added. “That’s because the City of San Francisco has been paying poverty wages for way too long.”

Board members weren’t the only ones worried about the cost. Nonprofit operators argued they couldn’t afford paying higher wage and warned of possible layoffs or service cuts.

Debbi Lerman, a representative of the San Francisco Human Services Network, a coalition of nonprofits, called the proposal an “unfunded city mandate on nonprofit organizations literally overnight to raise wages with no plans on how to pay for it.” She noted that other costs are involved as well when the minimum wage goes up, such as vertical wage increases.

San Francisco Living Wage Coalition’s co-director, Karl Kramer, said the nonprofit operators have raised similar arguments in the past, but the fears proved unfounded.

“We are in the midst of a severe labor crisis. We have severe worker shortage because these wages aren’t retaining workers,” Kramer said. “They are not attracting workers. A lot of these workers are being pushed out to Modesto, Tracy, Stockton. It is no longer becoming worth the commute to go back and forth for these jobs.”

An estimated 30,000 employees would be impacted. These workers are covered by The City’s minimum compensation ordinance, which Sheehy’s proposal would amend.

Meanwhile, Mayor Mark Farrell must submit a balanced city budget proposal by June 1 to the board for review and approval. He is working to close a budget deficit projection for next year of $137 million, which doesn’t assume the wage hike.

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