The conversation about raising San Francisco’s minimum wage will be tricky — will it be increased enough to truly help low-wage workers, or will it reach a level that negatively impacts businesses in The City?
Regardless of the thorny issues that must be overcome, Mayor Ed Lee was right to spark this conversation at this time, and now it is up to the many stakeholders to come up with a compromise that can be put before voters next year.
The talk around San Francisco — and around the nation about The City — is currently hyperfocused on affordability, and for good reason. The economy in San Francisco has rebounded, with unemployment dropping from the double digits just a few years ago to about 5 percent currently.
An important part of that rebound is the tech sector — the fastest-growing segment of The City’s labor market that, though accounting for roughly 8 percent of jobs, is a growing force. It also pays relatively well compared to other industries — one reason that studies show there is a multiplier effect that creates five nontech jobs for every one tech position.
Even as these tech jobs are creating nontech positions, there is the growing problem of affordability. The City’s home prices and rental costs were always among the most expensive in the nation, and now they are outpacing others. The lower end of the economic spectrum, which extends from low-wage workers to the middle class in The City, has born the brunt of the increasing prices — a reality that has surfaced in several recent polls.
Lee’s focus for the past few years primarily has been jobs, and that was the correct approach as San Francisco crawled out of the Great Recession.
But now The City is dealing with its own success, and the mayor and other elected city officials are right in turning their attention to leading this city forward, including ways to make it affordable for as many people as possible.
Creating proper policies around having and building enough housing is a thorny issue to be tackled next year, but the affordability crisis will not be solved with one solution — as the topic of increasing the minimum wage shows. There is talk about how to keep housing prices affordable in San Francisco, but many market forces are at play that severely limit what can be accomplished by government.
Instead, Lee is flipping the conversation about affordability on its head, as is clear in his statements to The San Francisco Examiner that no one can live on $10.74 an hour — the minimum wage in The City starting Jan. 1 — and challenging everyone to come up with a reasonable wage that could reach as much as $15 per hour.
The discussion about raising the minimum wage will not be easy, but it will be an important step in the process of acknowledging how expensive it has become to live in San Francisco.