S.F. businesses, residents oppose minimum wage hike
Author: Craig Garthwaite
Publication Date: July 2003
Newspaper: San Francisco Business Times
Topics: Minimum Wage
If San Francisco Supervisor Matt Gonzalez has his way, outbound traffic on the Bay Bridge is about to get much worse.
Cars carrying workers to new jobs in Oakland will follow the large trucks carrying what’s left of the city’s beleaguered business community to the friendlier confines of neighboring cities. The exodus will result from Gonzalez’s ill-conceived plan to hike the minimum wage to $8.50.
Wherever possible, rational business owners and entrepreneurs will pick up and move outside of the city limits rather than suffer under these inflated business costs.
Of the employers who remain, research shows that they will hire more-qualified applicants (often teenagers from middle-class and well-off families), who are attracted by the above-market wages, crowding out the least skilled.
Clarifying the question
Gonzalez is undeterred.
He believes that the majority of San Francisco residents support his dangerous idea. This opinion, however, rests on faulty polling data. Asking someone if they support an $8.50 minimum wage without mentioning the potential consequences is like asking a child if they want to have ice cream every night for dinner.
A recent and more in-depth poll of San Francisco residents conducted by a nationally respected opinion research company shows little support for a hike in the minimum wage.
While 61 percent of residents initially support an increased wage, this number plummets to only 33 percent when residents learn of potential job and business loss.
San Francisco residents intuitively realize the most effective anti-poverty measure is having a job. For this reason, polling shows deeper support for alternative measures to help the poor, such as a local earned income tax credit, endorsed by 55 percent of the city.
Recent research by the Employment Policies Institute shows that a local earned income tax credit is far more efficient at reducing poverty than increased mandated wages.
Large cities such as Denver have successfully avoided the pitfalls of mindless wage hikes by creating these local tax credits that target aid to those most in need.
If Gonzalez is determined to push this destructive ordinance forward, he should also push an ordinance to add a toll booth at the Bay Bridge on-ramp. It’s the only way he is going to extract any more revenue out of the businesses he will chase out of town.