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File Number: 16-286 <br />Proponents of a local San Leandro minimum wage ordinance argue that the new state law is <br />not aggressive enough in phasing -in the $15/hour rate, and that implementation of a local <br />ordinance would better support the most vulnerable populations who work in San Leandro. <br />Proponents note that the cost of living, particularly rents, in the Bay Area continue to increase <br />each year and median wages have not kept pace, which has most heavily impacted low-wage <br />earners struggling to make ends meet. Proponents also argue that enhanced minimum wage <br />requirements provide workers with extra disposable income that is re -circulated throughout <br />the local economy through increased purchasing power. <br />Arguments in Opposition to a Local Minimum Wage: <br />Opponents to local minimum wage efforts note that one of the underlying reasons the State <br />adopted the new law was to create a level playing field across the entire State, thereby <br />obviating the need for local municipalities to adopt their own unique wage regulations. Such a <br />patchwork of varying regulations creates a competitive disadvantage to businesses operating <br />in places with higher wage requirements. Opponents also assert that wage floors can lead to <br />increased unemployment as companies shed workers to offset higher labor costs. Higher <br />labor costs also inevitably lead to increased prices for consumers, which can compound <br />increases in the cost of living. Local business license data also indicates that approximately <br />10% of San Leandro workers live in San Leandro, so a local ordinance could primarily benefit <br />non-residents. Opponents also point out that the new state requirements have not been <br />implemented, so it is premature to adopt more aggressive local wage requirements when the <br />impact of the new state law remains unknown. <br />Summary <br />After completing seven months of policy review surrounding a local minimum wage ordinance, <br />one member of the Finance Committee stated that a local ordinance remained appropriate in <br />order to more aggressively implement the phasing of wage increases each year, and two of <br />the Finance Committee members stated that they believed the City should allow more time for <br />the new state law to take effect before further exploring any additional local wage <br />requirements. In light of this lack of consensus, the Committee members mutually agreed to <br />elevate the discussion to the entire City Council, which is the purpose of this work session. <br />Other Policy Considerations <br />It should also be noted that as part of the Finance Committee's deliberations on this issue, <br />several members of the Committee expressed interest in conducting outreach to local <br />businesses in order to solicit their feedback before moving forward. If the City Council <br />supports moving forward with a local minimum wage ordinance, staff requests direction <br />regarding whether additional outreach efforts should be conducted and in what form such <br />outreach should take place. In addition, given that the City has never previously regulated <br />private -sector wages on such an expansive and universal scale, staff requests authorization to <br />explore what additional staffing, new regulatory tools and associated General Fund costs <br />would be required to implement and ensure compliance with such an ordinance, if so directed <br />by the Council. <br />/_149r_TH:I►yi1=1►11kr_? <br />• Summary of Local Minimum Wage Ordinances in other Bay Area Cities <br />• Summary of Business License Data <br />City of San Leandro Page 3 Printed on 617/2016 <br />