Minimum Wage Isn’t a Living in San Francisco

The average home sells for $720,000. Apartments rent for $2,000 a month. Even on the best salary, San Francisco is an expensive place to live.

Try it on minimum wage.

Bernadine Emperador, 42, often works 60 or more hours a week at an airport rental car job. On Sundays, she sells hot dogs during 49ers games. Despite the effort, Emperador can’t afford her own place. She squeezes instead into an apartment with her mother and daughter, a college student.

“I’m constantly working. Every day,” she said. “But I have nothing to show for it.”

The plight of people like Emperador is spurring San Francisco to consider the most ambitious proposal in the nation to boost wages for the working poor.

Under the “living wage” plan, workers at businesses that contract with the city or lease municipal property would see salaries bumped from California’s $5.75 minimum wage to $11 an hour, the highest in the United States. As many as 42,000 low-wage employees could reap better salaries.

But the wage debate has whipped up a political furor in a city famous for its liberal leanings.

Business leaders have slammed the proposal, saying it would hit them hard and prompt layoffs, broken contracts and economic turmoil. Cost estimates for the city and businesses range as high as $250 million a year. Some critics say the move could backfire, boosting competition for entry-level jobs and shutting out society’s least skilled.

“We could end up hurting some of the same workers we’re trying to help,” said Patricia Breslin, executive director at the Golden Gate Restaurant Assn.

The tussle in San Francisco--likely to continue until a Board of Supervisors vote early next year--comes as living wage proposals are gaining acceptance in big cities around the country.

More than three dozen municipalities have already adopted plans, including Chicago, Portland, Ore., and Los Angeles, which set a wage floor of $7.51 in 1997. The nation’s loftiest living wage is in San Jose, where workers contracted by city government get $9.50 an hour. An additional 40 cities have proposals in the works, among them Philadelphia and Denver. Santa Monica is considering a $10.69-an-hour living wage.

Few places have as defined a gap between rich and poor as San Francisco. With an influx of Silicon Valley wealth in recent years, the city’s housing prices and income levels have skyrocketed.

Left behind are low-wage workers. A recent study found that workers need $22 an hour to afford the typical two-bedroom apartment in San Francisco.

“This is a city shedding its middle class,” said Ken Jacobs, campaign director at the Living Wage Coalition, which is pushing the proposal. “The very wealthy live here, and the poor live here. It’s a city of haves and have nots. We’re entering the Dickensian universe here.”

Board of Supervisors President Tom Ammiano, who wrote the measure, sees moral ground at stake. “There’s just a lot of people who work for poverty wages who are employed by contractors of the city,” Ammiano said. “That just isn’t right.”

A recent poll commissioned by living wage supporters found 59% of city voters support the salary hikes. Backers suggest any added costs to the city would be offset by a decrease in social services. Organized labor embraces the proposal, which would make it more difficult for nonunion firms to underbid on city contracts.

Just what the salary hikes would cost taxpayers remains in dispute. A UC Berkeley economist estimated that city contractors and tenants at the port and airport would face about $110 million a year in additional wage costs. That’s less than half the $254.7-million annual cost calculated by economists at San Francisco State University.

Whatever the price tag, business leaders shudder at the prospect of new wage rules. Among those most worried are restaurant owners leasing municipal waterfront space at Fisherman’s Wharf or along the trendy Embarcadero port district.

Breslin said a forced wage increase would put eateries on port property at a competitive disadvantage compared with unaffected restaurants right across the street. She also worries the proposal might be pushed on any eatery in San Francisco that has a city permit for tables along public sidewalks.

Kim King, whose security firm contracts to provide guards for the municipal trolley car line, estimates her costs would rise at least $300,000 a year because of boosted salaries. She now pays a $7.25 starting wage. If the city doesn’t offset the extra salary costs, she said, “I wouldn’t be able to do it.”

The living wage proposal has gleaned mixed reviews from the more than 500 nonprofit groups that provide city services ranging from sheltering the homeless to in-home care for the elderly and ill.

Tom Nolan, executive director at Project Open Hand, said a salary boost would cost the food program an extra $400,000. “We’re all for a living wage,” he said. “The question is how do we pay for it?”

Jacobs argued that the city has been running budget surpluses in excess of $100 million the last two years and can afford to pass it on to low-wage workers. Business, he said, can help foot the rest. At San Francisco International Airport, where 11,000 workers would see higher salaries, it equates to getting an extra $1 from every passenger, he said.

“The high cost of living here is pushing working families to the brink,” he said. “What we’re really seeing is people being squeezed out of the city.”