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City of Oakland Minimum Wage Increase Initiative, Measure FF (November 2014)

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A City of Oakland Minimum Wage Increase Initiative ballot question is on the November 4, 2014 election ballot for voters in the city of Oakland in Alameda County, California.

A group called Lift up Oakland is behind the initiative that seeks to raise the minimum wage in the city to $12.25 per hour and require employers to offer at least five days of sick leave to all employees, with larger businesses required to provide nine days of sick leave. The measure also has provisions designed to allow hospitality workers to keep all of their wages and tips.[1]

Several city councils across California have already raised low-wage pay, and initiatives seeking minimum wage increases were started in the cities of Richmond, San Francisco and Berkeley, but Shum Preston, spokesperson for SEIU 1021, said that, as of May 23, 2014, the Oakland effort had been “the most well-developed and broadly-supported." Minimum wage increase proponents submitted more than enough signatures to qualify their initiative for the November ballot.[1]

Berkeley Mayor Tom Bates, who proposed an area-wide minimum wage increase, said, “Oakland is the place where we would look. If the voters approve the ballot measure, that will set a standard. It makes it much more palatable to people because they are not at a competitive disadvantage.” Thus, with a lot more than the minimum wage of workers in Oakland on the line, critics and supporters of a $12.25 per hour minimum wage will battle to win over voters before they decide in November the question that could have a very significant impact on the lives of workers and the entire economy of Oakland.[1]

In order to avoid punishing cities that approve a higher minimum wage with a competitive disadvantage in the job market, Berkeley Mayor Tom Bates proposed a wage increase for the entire East Bay area.[1]

Effects of the measure

According to Lift Up Oakland, the measure would provide a raise for between 40,000 and 48,000 employees in the city, with up to 34,000 directly affected and up to 14,000 receiving indirect benefits.[2]

The group also estimated the total worker income in the city would increase by about $120 million per year, with the wage of affected workers rising by an average of $1.69 per hour or $2,700 per year.[2]

The measure would also give paid sick days to 56,721 private sector workers - 37 percent of all private employees in Oakland.

Drilling down into census data, Lift Up Oakland broke down the employees without sick pay in the following way:[2]

  • 38 percent of male workers
  • 35 percent of female workers
  • 52 percent of Hispanic workers
  • 33 percent of Black workers
  • 33 percent of Asian workers
  • 68 percent of workers earning under $12.25 per hour

Text of measure

Ballot question

The question on the ballot:[3]

Shall Oakland's Municipal Code Be Amended To: (1) Establish A Citywide Minimum Hourly Wage Of $12.25, To Be Increased Annually To Address Inflation; (2) Require Employers To Provide Employees Paid Sick Leave; (3) Require That Hotel, Restaurant And Banquet Facility Operators And Employers Pay Service Charges They Collect To Employees Providing Those Services; And (4) Provide Employees The Right To Bring An Action Against Employers To Enforce And Seek Remedies For Violation Of This Ordinance?[4]

Ballot title

The following ballot title was provided by the office of the city attorney:[3]

A Proposed Amendment to the Oakland Municipal Code Establishing a Minimum Wage, Requiring Payment for Accrued Sick Leave, and Requiring Payment of Service Charges to Hospitality Workers[4]

—Barbara J. Parker, Oakland City Attorney[3]

Ballot summary

The following ballot summary was provided by the office of the city attorney:[3]

This measure would establish a minimum wage in the City of Oakland of $12.25 per hour, beginning on March 2, 2015. The minimum wage rate would increase yearly on January 1st based on increases in the cost of living.

This measure would require that employers in Oakland provide paid sick leave to their employees beginning on March 2, 2015. Employees would accrue one hour of paid sick leave for every 30 hours they work. Employers may cap paid sick leave earned by an employee at 40 hours for employees of small businesses and 72 hours for employees of other employers. Small businesses are defined as employers who normally have fewer than ten workers. An employer may set a higher cap for paid sick leave or no cap at all. Employees may use paid sick leave for the employee's own illness or injury, or to care for certain family members who are ill or injured. Employees with no spouse or domestic partner may designate one person for whom the employee may use paid sick leave to provide care.

This measure would require that hospitality employers who collect service charges from customers pay all service charges to their hospitality workers. Hospitality employers are defined as employers who own, control, or operate any part of a hotel, restaurant or Banquet facility within Oakland.

This measure would provide for enforcement by the City or by an employee's lawsuit. This measure would prohibit discharging, reducing compensation or otherwise discriminating against any person who makes a complaint to the City, participates in any City proceedings, or files a lawsuit for violation of this measure. This measure would permit the City to consider an employer's record of noncompliance with this measure in determining whether to enter into City contracts with the employer or grant land use approvals or other permits to the employer.

This measure prohibits employers from funding increases in compensation required by the measure "by reducing any non-management employee's compensation or non-wage benefits. The measure also requires that employers retain records regarding pay rates, paid sick leave, and service charge collection and distribution, and that employers prominently post and provide notice to employees of their rights under the measure.[4]

—Barbara J. Parker, Oakland City Attorney[3]

Full text

The full text of the proposed initiative is available here.

Competing measure

The city council considered the possibility of putting a competing measure on the ballot but ultimately chose not to.[5]

Support

OaklandLiftUpLogo2014.png

Supporters

The group called Lift Up Oakland is behind the initiative effort. The Lift Up Oakland coalition consists of:[6]

  • ACCE
  • EBASE
  • Raise the Wage East Bay
  • ROC the Bay
  • SEIU 1021
  • SEIU ULTCW
  • UFCW Local 5
  • UNITE HERE 2850

Arguments in favor

Proponents, encouraged by the efforts nationwide to increase the minimum wage, argue that the city's poorest need a raise in order to simply maintain an acceptable quality of life. Minimum wage increase supporters also posit the economy of the entire city will be enhanced by the measure because it will provide a large number of local customers with significantly more purchasing power.[1]

Supporters also propose that if Oakland leads the way, other cities and possibly the whole East Bay area will follow suit, eliminating any competitive disadvantage for the city's job market.[1]

Opposition

Arguments against

Critics of the initiative say that it will hurt the job market in the city by driving jobs into the surrounding unincorporated areas or into nearby cities with lower minimum wage requirements. Micheal LeBlanc presented his situation as the owner of a local restaurant called Pícan at an Oakland Chamber of Commerce meeting. LeBlanc talked about his 52 employees, his annual payroll of $1.2 million and his servers who earn between $14 and $29 per hour with tips. LeBlanc stressed that, with the increase in base-pay demanded by the initiative for his servers, as well as all of his other workers, the initiative could increase his payroll by $300,000 per year, which, according to LeBlanc, is especially significant in an industry that only enjoys profit margins of as little as 5 percent. LeBlanc pointed out that, while the minimum wage movement has gained a lot of public support and features justifiable sympathy for low-wage workers in its corner, drastic jumps in mandatory low-wage pay localized to small areas could prove harmful, rather than helpful, for the city's workers by driving businesses away. He said, "No one wants to be the one to kill Bambi," but he also implied that in his search for a second restaurant location, he would definitely choose Walnut Creek over Oakland if the initiative is approved. LeBlanc insisted, "If the cost of labor in Oakland changes too much, economically it's not even a tough decision."[1]

Polls

According to recent polling, about 70 percent of the city's voters approve of the bid to hike compensation for low-wage workers to $12.25 per hour by March 1, 2015.[1]

Reports and analyses

Impartial analysis

The following impartial analysis of Measure FF was provided by the office of the city attorney:[3]

Existing state and federal law require employers to pay a minimum hourly wage to employees. There is no minimum wage requirement under local law. If approved, this measure would establish a minimum wage in the City of Oakland. Starting on March 2, 2015, the minimum wage in Oakland would be $12.25 per hour, and would increase yearly based on increases in the cost of living, if any. This is higher than the minimum wage required under state and federal minimum wage laws. The state minimum wage is $9.00 and will increase to $10.00 in 2016. The measure would cover the same employees in Oakland that the state minimum wage law covers.

Existing law does not require employers to provide paid sick leave to their employees. If approved, this measure would require employers in Oakland to provide paid sick leave to their employees at a minimum rate of one hour for every 30 hours worked. Employers could cap paid sick leave hours earned by an employee, although an employer could set a higher cap or no cap at all. Employees could use paid sick leave for their own illness or injury, or to care for certain specified family members or other designated persons who are ill or injured.

Existing law does not require hospitality employers (such as hotel, restaurants, or banquet facilities) to pay service charges that they collect to their employees. Service charges include charges billed to customers by hospitality employers for employee services, such as room service delivery charges or porterage (baggage carrying) charges, but do not include tips. If approved, this measure would require that hospitality employers in Oakland who collect service charges from customers pay those service charges to employees who provide the service.

The measure includes various enforcement provisions. Employees could bring a lawsuit against an employer if the employer fails to comply with the measure. The City also could establish a process for enforcement, although that is not required. The measure would allow the City, if permitted by law, to consider an employer's record of noncompliance in deciding whether to enter into a contract with the employer or grant it land use approvals or other permits to the employer, and would permit the City to impose conditions on such approvals to ensure future compliance. However, it is not certain under what circumstances the law would permit the City to consider an employer's record of noncompliance in granting or denying a land use approval or other entitlement to expand or operate in the City, or allow the City to impose conditions on such approvals to ensure future compliance.

This measure was placed on the ballot by a petition signed by the requisite number of voters. A "yes" vote for the measure will approve the provisions described above; a "no" vote will reject the provisions. A majority vote is required for passage.[4]

—Barbara J. Parker, Oakland City Attorney[3]

Fiscal analysis

The Oakland City Auditor conducted an analysis of the fiscal impact Measure FF would have on the city's finances if approved. The chief findings of the analysis are summarized below. The auditor estimated that Measure F - due to higher salaries for some low-wage city employees - would directly increase city costs by between $479,832 and $575,556 per year.[3]

The auditors report also estimated a minimum of $1,657,195 in additional city costs due to indirect effects of the measure.[3]

Direct costs

According to the city auditor, there are currently two city employee positions that receive hourly compensation less than $12.25 per hour. The approval of Measure FF would demand that the city give employees in these two positions a raise. The positions are "Recreation Aide" and "Recreation Attendant I."[3]

Direct costs
Position: Filled Positions Average hours per year Current cost to city Cost to city under Measure FF Cost increase
Recreation Aide 207 58,170 $713,990 to $867,895 $971,820 to $1,181,253 $257,830 to $313,358
Recreation Attendant I 127 42,669 $647,677 to $794,902 $869,679 to $1,057,100 $222,002 to $262,198
Totals 334 100,839 $1,361,667 to $1,924,995 $1,841499 to $2,238,353 $479,832 to $575,556

Indirect costs

The city auditor also estimated the city would experience additional costs each year caused indirectly by the approval of Measure FF.[3]

  • Salary increases for seven city employee positions - 347 total employees - in order to maintain a proper pay-scale hierarchy - $1.29 to $1.52 million per year
  • Other unknown salary increases needed to maintain a fair pay-scale hierarchy - Cost unknown
  • Education and outreach to employers and employees about new wage law - $178,000 in first year
  • Staff to enforce the minimum wage - an estimated 1.5 employees needed - $189,195 per year
  • Expenses required to fund litigation surrounding Measure FF - Unknown cost

The city auditor also estimated that the city would have to cut back its Workforce Training Programs and Senior Aide positions, since such programs often pay participants less than $12.25 per hour, and the increased cost caused by Measure FF requirements would result in a reduction in the number of positions the city could fund.[3]

Path to the ballot

Lift Up Oakland turned in 33,682 signatures in February of 2014. The Alameda County registrar certified that there were more than enough valid signatures to qualify the measure for the ballot. Lift Up Oakland reported 1,000 hours of work by more than 253 volunteers and support from 45 labor and community organizations towards the successful petition drive. During their July 15, 2014 meeting the city council members voted to put the proposed initiative on the November 4, 2014 election ballot.[5][7]

Similar measures

Local

Proposed ballot measures that were not on a ballot Washington D.C. Minimum Wage Initiative (November 2014)
Proposed ballot measures that were not on a ballot City of Seattle $15 Per Hour Minimum Wage Increase Veto Referendum (November 2014)
Proposed ballot measures that were not on a ballot City of Seattle $15 Per Hour Minimum Wage Initiative (November 2014)
Proposed ballot measures that were not on a ballot City of San Francisco Minimum Wage Act of 2014 Initiative (November 2014)
Approveda Philadelphia Minimum Wage Ordinance, Proposition 1 (May 2014)
Approveda City of Chicago $15 Per Hour Minimum Wage Referendum (March 2014)
Approveda SeaTac "Good Jobs Initiative", Proposition 1 (November 2013)
Proposed ballot measures that were not on a ballot City of Richmond Minimum Wage Increase Ballot Question (November 2014)

Statewide

Proposed ballot measures that were not on a ballot California Minimum Wage Supplement for Home Health Workers (2014)
Proposed ballot measures that were not on a ballot Idaho Minimum Wage Initiative (2014)
Proposed ballot measures that were not on a ballot Massachusetts Minimum Wage Increase Initiative (2014)
Proposed ballot measures that were not on a ballot Michigan Minimum Wage Initiative (2014)
Proposed ballot measures that were not on a ballot Missouri Minimum Wage Initiative (2014)
Proposed ballot measures that were not on a ballot New Mexico Minimum Wage Amendment (2014)


See also

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