This week marks the two-year anniversary of implementing a $2 increase in San Jose’s minimum wage. At the time, this 25 percent increase was one of the largest jumps in minimum wage in the nation’s history. Proponents said it would help low-wage workers pay for the basics with little harm to the economy, while opponents warned of economic catastrophe. As the debate rages on about raising the minimum wage around the country, San Jose’s experience offers some important lessons.
First, San Jose’s minimum wage has put $4,000 a year more into the pockets of low-wage workers, providing people with more money to pay for rent, food and clothing. As Cherry Lunario, 49, a home care worker recently said, “It makes your life a little better.” Agencies serving the poor and working class have experienced a significant reduction in people seeking emergency services, such as the 6,500-person drop at Sacred Heart Communities Services since 2013.
In addition, the unemployment rate in the San Jose metro area has decreased from 7.6 percent at the time of implementation to its current 4.6 percent. Importantly, leisure and hospitality, the sector that includes food services and where many minimum wage jobs reside, increased its labor force by 4.1 percent in 2014, which is on top of the 3 percent increase in 2013. Furthermore, the San Jose Downtown Association reports that the number of restaurants in the city’s core has increased by 20 percent over an 18-month period since 2013.
Clearly, San Jose’s minimum wage has been a success, and other cities have taken notice. Oakland just voted to raise its minimum wage to $12.25, while the Mountain View and Sunnyvale recently enacted laws to match San Jose’s $10.30 minimum wage, and have gone on record to increase it to $15 by 2018, which will match San Francisco’s and Seattle’s new rate. Palo Alto and several other California cities are posed to “raise the wage.”
San Jose started something big.
And yet, if just raising the minimum wage is all we do, it is impossible to undo the extreme inequality caused by the political and economic changes of the past 35 years, which has caused middle- and working-class incomes to stagnate, with the top 1 percent experiencing exponential growth. These changes have made the United States the leader in the industrialized world in childhood poverty, income inequality and wealth inequality.
The solution to this extreme inequality is an Economic Bill of Rights. We need a new social contract between the individual and state, affirming our political and economic rights. President Franklin D. Roosevelt first suggested such a social contract in his 1944 State of the Union address, which stated that all Americans should have the right to a job, a living wage, a decent home, a good education, adequate medical care and adequate protection from the economic fears of old age and unemployment.
San Jose started something big by raising the minimum wage. Let’s do something even bigger and enact local, state and national policies consistent with the Economic Bill of Rights, like local subsidized job programs and fully funded “housing first” programs, statewide class-size reduction, expansion of the Earned Income Tax Credit and federal enforcement of the Humphrey Hawkins Act, which provides that “reservoirs” of public works jobs are to be created when the unemployment rate rises above 3 percent.
Bold policies consistent with an Economic Bill of Rights will rebuild our middle class, eliminate poverty and end extreme inequality.
Scott Myers-Lipton, a sociology professor at San Jose State University, is co-founder of San Jose’s minimum wage campaign and author of “Ending Extreme Inequality: An Economic Bill of Rights Approach to Eliminate Poverty.” This article first appeared in the San Jose Mercury News
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$11 will not raise a single person out of poverty in Silicon Valley because the average rent for a studio apartment in a decent neighborhood is $3000. $2000 -2400 in the hood. Logically, by raising the minimum wage will only increase prices on goods and services and passed on to consumers so it seems like in the long run, the people making $11 will be paying higher prices too. So, really what’s the difference. Have any one of these elected officials gone to the grocery store lately? Notice that a gal. Of milk costs $5 now?
“In addition, the unemployment rate in the San Jose metro area has decreased from 7.6 percent at the time of implementation to its current 4.6 percent. Importantly, leisure and hospitality, the sector that includes food services and where many minimum wage jobs reside, increased its labor force by 4.1 percent in 2014, which is on top of the 3 percent increase in 2013. Furthermore, the San Jose Downtown Association reports that the number of restaurants in the city’s core has increased by 20 percent over an 18-month period since 2013.”
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Scott Myers-Lipton makes a great point here. But looking at it laid out like this raises the question: if raising the minimum wage would increase jobs and demand, why is the San Jose Silicon Valley Chamber of Commerce so dead-set against it?