Spend more, make more; make more, spend more?

If you made more money, does that mean you would spend more? In order to pay workers more, won’t businesses have to raise prices for consumers, allowing you to purchase no more than you already can? These are the conundrums that we face here in SF.

As I mentioned to you in August, the California state minimum wage is being raised to $7.50 on January 1st, 2007 and then onto an even $8 by the middle of next year. On Friday, it was announced that the city of San Francisco minimum hourly wage would be increased as well. A 3.6% rise will be enacted on January 1st, 2007, lifting the hourly wage from $8.82 to $9.17.

Why 3.6%? Approved at the polls in November 2003, the city’s minimum wage law is an annual adjustment based on the Consumer Price Index of money-makers in three local cities: SF, Oakland, and San Jose. Stats yanked from the US Department of Labor help to make calculation and set a yearly raise.

Is a wage increase really what we need? Real estate in the city is some of the most expensive in the country, so the raise will help to pay rent. Also, this means we will all be paying more taxes that will be funneled back into the city (we hope) and much needed changes. Is that really going to make it all better though?

3 Comments so far

  1. anna (unregistered) on September 25th, 2006 @ 2:43 pm

    I feel like most of the people I know that earn minimum wage don’t live here, they live in outer counties. I take that back- a girl in my Russian class was minimum wage, and she lived in the Richmond. So it would definitely help her to get the extra $$ an hour. Would that drive out her secretary job? Probably not. I think businesses in town make a lot of money, it’s desireable commercial real estate. It’s not something to draw in the mom and pops, but definitely ok for the other corporations that routinely hire minimum wage: the safeways, the starbucks, etc.


  2. anna (unregistered) on September 25th, 2006 @ 2:57 pm

    Victoria: this study shows the results of the increase from 2003. If you’re interested, check it out. Looks like there were a few effects but overall it was a success.

    http://www.berkeley.edu/news/media/releases/2006/01/02_livingwage.shtml


  3. Kelly (unregistered) on September 26th, 2006 @ 9:04 am

    The UC Berkely study that supported that Nov. ’03 measure looked at how much it cost the SF gov’t in services to minimum wage earners & their families for different minimum wage levels. There is additional strain placed on City (and State) health and public housing services if families whose wage earners make a lower min. wage have to rely on these public services. There are so many young children of minimum wage earners in SF who are benefiting from their parents’ increased income, an increased income which is also allowing them to pay for health care/housing/etc. themselves, and is taking some of the burden off of government-funded social services. I’d rather contribute to their increased wages through what I choose to buy (as it is now), rather than contributing to more gov’t services through taxes which are decided for me.



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