Now That the State Has Spoken, San Diego Should Drop Its Minimum Wage Measure

As a San Diego-based small business owner, I was a passionate opponent of the City Council’s proposed minimum wage increase back in 2014 – but it wasn’t because I don’t believe in the minimum wage increase. I do, in fact, believe that the state’s minimum wage, which was $9 at the time, was too low.

My opposition stemmed from the fact that the increase was too much, too fast for small businesses, and it only affected businesses located or doing business in the city of San Diego. That would put businesses located in the city at a disadvantage.

I worked closely with Councilman Todd Gloria to develop a compromise that in some form has ended up as the upcoming June ballot initiative to raise the San Diego wage to $10.50 per hour as soon as it passes, and then to $11.50 per hour six months later on Jan. 1, 2017. I never loved that compromise, but it was better than what Councilman David Alvarez, labor leaders and others were pushing for.

The news coverage this week of Gov. Jerry Brown’s signing into law a new minimum wage for the state is full of doomsday predictions that the $15 minimum wage is going to kill small business. And, they might be right. At a minimum, prices will have to go up, and jobs will have to be cut. Small businesses do not have a pot of gold set aside waiting for a minimum wage increase. But, that horse has left the barn, and the statewide $15 minimum wage is here to stay. It’s time for the local business community to change its focus to a more urgent concern.

The San Diego minimum wage ballot initiative still looms. This now unnecessary initiative will put city businesses at a tremendous disadvantage in the short term and create an unreasonable financial burden for most small businesses.

The state Legislature and governor have addressed the cry for a higher minimum wage. They have put together a sensible plan that small businesses will be able to adjust to over a period of time. The San Diego initiative needs to go away. Many small businesses will likely not survive a 15 percent increase in wage costs in a six-month period, and that’s without even taking into consideration the additional payroll tax and workers’ compensation cost increases that accompany a wage increase.

This is the discussion that needs to be had now – and it’s far more important than whining and complaining about Brown’s reasonable compromise to get us to $15 in the next seven years. A compromise that also contains safeguards in the event of an economic downturn. There are no safeguards in the San Diego initiative; the minimum wage can continue to increase whether we are in boom times or bust.

We need business organizations and city leaders, including the mayor’s office, the Chamber of Commerce, restaurant and hotel groups and others with loud voices and lobbying funds to focus their attention on eliminating the inequity that could exist between business expenses in the city of San Diego verses the rest of the state. Hopefully Voice of San Diego and other media outlets will be covering this more important news than the now old news of a looming $15 minimum wage.

Harry Schwartz is co-owner of Downtown Ace Hardware.