San Francisco To Increase Minimum Wage To Over $10

San Francisco will make history at the first of the year when it becomes the first city to have a minimum wage of over $10. The city’s hourly wage for its lowest-paid worker will hit $10.24 on New Year’s Day. This is more than $2 higher than California and close to $3 more than the minimum wage set by the federal government.

San Francisco citizens passed a proposition in 2003 that requires the city to increase the minimum wage each year. They do this by using a formula tied to inflation and the cost of living. Karl Kramer of the San Francisco Living Wage Coalition believes a single adult without children should make $15. And doubles when you have a child.

“It helps workers’ morale in a time of economic crisis; they feel that they’re able to tread water and get some relief from the recession,” said Kramer.

Some believe this wage hike could result in layoffs by small businesses.

Daniel Scherotter, a restaurant owner, said the cities wage hike will mean higher pay for his waiters, but his kitchen staff will have to take a hit. Business owners also have to pay $1.23 to $1.85 an hour per employee for health-care coverage if they don’t offer health insurance. San Francisco also charges a payroll tax of 1.5% and workers receive nine paid sick days annually.

“So that drives me nuts, that as a chef, I have to cut my kitchen allowance,” Scherotter said to CNBC. “What I pay for a waiter is more than double what Manhattan pays, it’s more than double what Chicago pays, and it’s four times what Boston pays. And those are … other big, expensive, pro-labor cities. But I pay what they all pay added together for tipped employees.”

While employers aren’t too happy about having to pay more, employees are enjoying the extra pay no matter how small.

written by

Rachel Brook is an up and coming financial writer focusing on commodity price inflation and how the overall market reacts to the price swings. She also covers emerging markets in Africa and SE Asia.

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