Editorials

Move cautiously on raising minimum wage

A national push to raise the minimum wage is coming to Sacramento. Labor unions, which organized this demonstration in Chicago last December, are seeking a $15 wage.
A national push to raise the minimum wage is coming to Sacramento. Labor unions, which organized this demonstration in Chicago last December, are seeking a $15 wage. The Associated Press

In Sacramento as elsewhere, too many people toil in jobs that don’t pay a living wage and don’t adequately reward hard work. So it’s entirely proper to debate raising the minimum wage, but it must be done in a measured way.

Mayor Kevin Johnson plans to empanel a task force after the first of the year to study the issue. Johnson says the group will include business and labor representatives. It should include a broad range of leaders who can speak for the interests of small retailers, social service agencies and community groups, as well as corporations and labor.

Ideally, this task force can come to consensus on a plan that works for Sacramento. The mayor is right to say that any proposal must “make sense for everyone” and that “there’s no one-size-fits-all” solution. He wants the group to explore issues such as the timing and whether some business sectors should be exempt.

This is no simple undertaking; government ought to be very careful in setting wages for the private sector. The blanket $15 an hour being pushed by some labor leaders is too arbitrary.

As it is, the statewide minimum wage, which went from $8 an hour to $9 this past July, is set to go to $10 on Jan. 1, 2016. Obviously, there’s a big difference between $10 and $15, which would be more than double the current federal minimum of $7.25 an hour.

Labor leaders like to point to San Francisco, where earlier this month voters agreed to gradually increase the minimum wage from $10.74 now to $15 in 2018.

In case anyone needed reminding, Sacramento is not San Francisco. For one thing, the cost of living in Sacramento is about 30 percent lower, so the same buying power as a $15 wage in San Francisco would be $11.50 or so here.

Sacramento also isn’t the same as Los Angeles, where on Labor Day, Mayor Eric Garcetti proposed increasing that city’s minimum wage to $13.25 by 2017.

Johnson and the City Council should not rush into a plan they would later regret. They do not want to damage the economic recovery that is still fragile. They do not want to hurt homegrown, local small businesses, so they should look at leaving out the smallest and newest companies. They have to recognize that hourly pay is only one part of employee compensation; health insurance and other benefits – including the cost to employers – should also be considered.

And they should realize that Sacramento is part of a closely linked regional economy; lower-wage jobs could easily move outside the city limits, forcing city residents to commute, if they can.

In recent years, City Hall has done quite a bit to streamline permits and try to shake a reputation of being unfriendly to business. The last thing it should want is to set back those efforts with a heavy-handed minimum wage.

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