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Will Increasing Minimum Wage Thwart Farm to Fork?

Sacramento’s success depends on opportunity

Back Web Only Jul 20, 2015 By Jot Condie

Sacramento is driving the farm-to-fork movement nationwide. These efforts are led by small, local owners with community-minded restaurants. Our ability to grow this movement could be put at risk if the minimum wage is not approached in a thoughtful way. 

Los Angeles recently joined a number of cities in the Bay Area in dramatically hiking the minimum wage without the necessary mitigations to protect jobs and the economy. As we’ve seen in Oakland and San Francisco, both employees and employers are paying the price for these local policies that take a one-size-fits-all approach to nuanced wage issues, including cut jobs, reduced hours and higher prices.

The Sacramento City Council is slated to review the local minimum wage soon, providing us a unique opportunity to learn from the mistakes of other cities in crafting our own policy. Developing a comprehensive minimum wage will require local policymakers, business owners and labor representatives to put rhetoric aside in favor of mitigations that will benefit all.

Before crafting a local policy, the city must first consider the tremendous efforts already occurring on this issue statewide.  State law increased the minimum wage by $1 in 2014 with another $1 increase in January 2016 — making California’s minimum wage the highest in the country. Restaurants operate on a notoriously thin margin. Balancing the rising cost of doing business with the need to stay competitive and consistent for consumers leaves restaurants in the lurch when costs increase.

Governor Brown’s recent budget takes a more targeted approach to this issue, calling for implementation of an earned income tax credit rather than further increases, because it will more effectively provide financial relief to the state’s lowest earners. Sacramento leaders must protect our unique regional economy and preserve the ever-growing opportunity that the booming culinary scene, new arena and other local developments offer. Doing so will require due diligence on the regional impact of an earned income tax credit and should draw from the wealth of economic research on the impacts — and the mitigations that can lessen them — of local minimum wage increases. 

Local minimum wage increases in California should consider the cost of living. For example, last year the San Diego City Council approved a minimum wage increase to $11.50 per hour by 2017. The cost of living in Sacramento is nowhere near that of San Diego, and any local minimum wage increase should reflect that difference. Numerous studies have identified mitigations that should be included in local minimum wage policies to ensure they are impactful policy solutions. Otherwise, a blanket minimum wage increase will have the unintended effect of raising the wages of workers that are not actually Sacramento’s lowest earners. 

A recent study by Beacon Economics found that only one in every four dollars of Los Angeles’s local wage increase will benefit intended recipients. To avoid similar waste, Sacramento can draw from Beacon’s analysis and include mitigations such as a slower implementation period for nonprofits and small businesses, and a teen wage to preserve access to entry-level positions for unskilled workers. These and other policy inclusions would ensure Sacramento gets it right where other cities have faltered, by protecting the jobs and preserving the hours of the very workers the city council seeks to help.

Sacramento’s success is dependent on opportunity — opportunity that diminishes when wage increases are implemented without mitigating measures. We must stand behind the restaurant industry and the burgeoning farm-to-fork movement by ensuring mitigations are part of a thoughtful, comprehensive minimum wage increase to ensure we do not do more harm than good to Sacramentans.

Comments

Robin (not verified)July 20, 2015 - 8:22pm

Very well stated. As we begin to build farm to fork and also marketing Sac as the #1 Destination for wine tasting in the nation with it 600 wineries in eight wine regions with 15-60 miles of the SMF airport. We are going slow down on the wages for a bit until we can grow the tourism in Sacramento to fill the wineries and restaurants.

Mike Ammann (not verified)July 27, 2015 - 10:53am

http://www.lao.ca.gov/BallotAn...

See Legislative Analysis Office Analysis link above but here's the bottom line below.

Businesses that employ low-wage workers would face higher labor costs as a result of this measure. These businesses would respond to higher costs in several ways, including raising prices or producing goods and services with fewer low-wage workers. Profits would likely decline for some of these businesses.

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