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Friday, May 9, 2014

Will a Higher Minimum Wage in San Francisco Really Help Pay Your Rent?

Posted By on Fri, May 9, 2014 at 11:51 AM

Can people who work here make rent in San Francisco, even if the minimum wage goes up?
  • Can people who work here make rent in San Francisco, even if the minimum wage goes up?

The San Francisco Chamber of Commerce announced this week its support for efforts to get a higher minimum wage for San Francisco on the November ballot. Currently, the minimum wage is $10.55 an hour, which comes out to a whopping $422 per week -- and that's before taxes.

That's nowhere near enough to cover rent for a small walk-in closet in San Francisco. So then, you ask, how high should the minimum wage be in order for people to make rent?

A quick perusal of apartment listings at Craigslist reveals a two bedroom in North Beach going for $4,695 per month. In the less-than-centrally located Ingleside District,

a relatively cheap two bedroom will cost you $2,350 a month.

Even one bedrooms are now running at $3,000 per month. The cheapest listing yesterday was a studio in the grungy Tenderloin forl $1,275.

If the minimum wage were to increase to $15 per hour as Mayor Ed Lee has suggested -- and we don't know if it will -- then a 40-hour work week would equate to a $600 paycheck, before taxes. That's barely enough to pay for even the cheapest digs in the 'loin.

However, Gwen Oldham, spokeswoman for the Chamber of Commerce, tells us that minimum wage is just one piece of the larger affordability puzzle. "Only 10 percent of the City's jobs are minimum wage jobs, and we don't know how many of those workers live in San Francisco," she says. "Raising the minimum wage is one strategy to help address the issue of affordability. But any increases to wages alone will be irrelevant if it is not taken into the broader context of the overall cost of living."

Oldham pointed out that Chamber is open to a reasonable, multi-year increase to the city's basic minimum wage. But "what is reasonable and how fast it can be rolled out without hurting jobs and the economy are the questions that still need to be answered."

"That's what everyone is trying to determine," Oldham says.

Obviously, the ones most affected by a wage increase are small businesses. Many of them don't have the deep pockets enjoyed by the big chain stores and might not have the financial resources to shell out an additional $160 per week per employee.

Brian Smith, owner of Huckleberry Bicycles at 1073 Market spoke briefly to SF Weekly about the issue, explaining that they'd be okay paying out a higher minimum wage.

"I don't think such an increase would affect us," Smith said.

But the popular Marcello's Pizza on Castro Street told a different story. "If the increase goes through, it would harm the business," said an employee who declined to give his name. Still, the employee agreed that cost of living issues needed to be addressed.

"When it comes to increasing the minimum wage, businesses are most concerned about the implementation time frame," said Oldham. "Also of concern are alternative wage rates for tipped employees, trainees and summer hires, and offsets for healthcare costs."

Any increase for lower income workers is a good thing, but it probably won't even begin to solve the problem.

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