S.F. increase in minimum wage may set precedent

By Lisa Leff
Associated Press

SAN FRANCISCO — Advocates for the poor hope San Francisco voters' approval of a minimum wage well above the federal minimum marks a precedent that spreads beyond this liberal bastion.

Sixty percent of San Francisco voters last week endorsed a citywide $8.50-an-hour minimum wage affecting virtually all employers, not just those receiving municipal contracts. The passage of Proposition L makes San Francisco the nation's third city with its own wage threshold.

"Starting with some of the progressive cities, I expect this movement to move to a wide range of communities across the country," said Paul Sonn, a lawyer with the Brennan School for Justice at New York University, who helped draft the San Francisco initiative.

The City Council of Santa Fe, N.M., this year set a local minimum wage of $8.50 for all businesses with at least 25 employees, although it is being challenged in court. Washington, D.C., guarantees its workers $1 an hour more than the federal minimum of $5.15. Hawai'i, with an hourly minimum wage of $6.25, is one of a dozen states that exceed the federal minimum, which Congress last raised in 1997.

Some cities can't follow San Francisco's lead because some states prohibit them from setting their own minimum wages.

Louisiana's Legislature passed such a law last year after voters in New Orleans approved a local wage minimum.

San Francisco's new minimum wage takes effect in 90 days for large businesses, and will be phased in over two years for nonprofit organizations and firms with fewer than 10 employees.

Supporters estimate that 22,000 San Francisco workers who earn below $8.50 an hour will directly benefit, and that another 32,000 people who already get paid the new minimum also will see their wages increase as a result.

The measure was opposed by the restaurant industry, which said it amounts to a job-killing raise for waiters who already earn tips.

But an economist at the University of California-Berkeley studied the measure's potential impact for its sponsors and concluded that it would increase costs by less than 1 percent for four-fifths of the city's businesses.

Supervisor and mayoral candidate Gavin Newsom, the owner of several upscale restaurants, endorsed the measure even though he estimates it will increase the payroll at just one of his restaurants by $71,000 a year. He said he would have preferred to have Congress approve a wage increase, instead of local voters.

"I hope this is a wake-up call to Congress, because it shouldn't be happening at the city level," Newsom said.