The more than 100,000 of San Francisco's lowest paid workers are in store for a pay raise after voters supported raising the minimum wage Tuesday to $15 by 2018.
Already the highest in the nation, San Francisco's minimum wage will continue to have that distinction with passage of Proposition J. Under the measure, the minimum wage increases on May 1, 2015, to $12.25 per hour, and rises gradually each year until it hits $15 on July 1, 2018. Subsequently the wage would be increased according to the consumer price index.
Mayor Ed Lee hailed the passage of the wage measure in a statement Tuesday.
“Tonight, San Francisco voters sent a message loudly and clearly to the nation that we can take on the growing gap between rich and poor, we can give a well-deserved raise to our lowest-wage workers, and we can do it in a way that protects jobs and small business,” Lee said.
While minimum wage increases are being discussed across the nation, San Francisco is also struggling with the challenges of growing rents, evictions and one of the worst income inequalities of any major city. Mayor Ed Lee supported the minimum wage hike as one effort to address the rise in costs.
“Our city has become more expensive. Working families, particularly those who earn minimum wage, are struggling,” Lee said at the time of announcing the ballot measure.
At $15 in 2018, workers could see between $100 and $200 more a week in their pay. Without the measure, the current minimum wage would be about $11 next year. Since 2005, median rents have increased twice the rate of the minimum wage in The City, according to a City Controller's economic analysis report.
A wage hike has an impact on city government costs as a result of contracts with nonprofit and social service organizations. In 2018, the cost increase is estimated at $56 million at a $15 minimum wage.
Supporters raised nearly $400,000 support of the measure as of September and there was no active campaign raising money against the measure. The San Francisco Council of District Merchants Associations argued against it, saying it would increase consumer costs, result in layoffs and attract more job applicants from outside of The City.
The Golden Gate Restaurant Association had unsuccessfully argued during the drafting of the measure for an exemption for tipped workers, credit for health and sick leave costs, and a longer period of phasing it in.
A UC Berkeley study released in August found that 142,000 workers, or 23 percent of the total workforce, would receive a pay raise with a minimum wage increase. And average annual earnings would increase by about $2,800 per year. The study said that while workers of color comprise 54 percent of the total workforce in San Francisco, 71 percent are low-wage workers.