Much of the discussion about the proposed minimum wage law in Pasadena has focused on the role of the restaurant industry. A handful of restaurant owners have been lobbying Mayor Terry Tornek and the City Council for over a year, trying to get them to include special provisions in the law to exempt them from all or parts of the ordinance.
Like Chicken Little, these restaurant lobbyists claim that the sky will fall if the city adopts a policy to gradually raise the minimum wage to $15 over the next five years, just as the city of Los Angeles and LA County have already done. They hope to undermine support for a law that will not only lift thousands of low-wage workers out of poverty but also pour as much as $230 million per year into the local economy.
Don’t let the restaurant industry and the Chamber of Commerce feed you misinformation. Their claims are full of baloney. Here are four reasons why Mayor Tornek and City Council members should take their arguments with a grain of salt.
First, restaurants comprise a tiny part of Pasadena’s economy. Restaurants account for only eight percent of jobs located in Pasadena. Because wages in the restaurant sector are so low, restaurants account for only two percent of the total payroll in Pasadena’s economy. Less than one percent (0.8 percent) of Pasadena’s municipal budget comes from the taxes on restaurant sales. In other words, contrary to the industry lobbyists’ propaganda, Pasadena restaurants do not comprise a significant proportion of the city’s workforce or account for much of the city’s budget.
Second, employees in Pasadena’s restaurant industry deserve the same benefits as employees in other sectors. Nearly one-third of working Pasadena residents earn less than $15 per hour. Over one third of those employed in Pasadena earn less than $15 per hour. The situation is even worse in the restaurant industry. A few waiters in upscale restaurants may earn more than $15 an hour (although many work part-time), but this isn’t true of most waiters, much less the kitchen workers, cashiers and others. Sixty five percent of Pasadena residents working in restaurants earn less than $15 an hour. For example, a typical food prep worker makes $7.87 an hour. Like other low-wage workers, restaurant employees struggle to feed their families and make ends meet. About half (48 percent) of Pasadena residents who work in restaurants live in overcrowded housing. Almost one-quarter of them pay more than half of their incomes for rent.
Third, many other cities have already adopted similar laws with no negative consequences to local restaurants. For example, a cover story in the Oct. 23 Puget Sound Business Journal (Seattle’s business newspaper) was headlined “Apocalypse Not: $15 and the Cuts That Never Came.” Its subheading: “This is a story of the minimum wage meltdown that never happened.” It reported that since Seattle adopted its minimum wage law, the number of restaurants is growing. Similarly, a new study by economists at UC Berkeley found that since San Jose raised its minimum wage by 25 percent, jobs in the restaurant sector have not declined.
Restaurants locate in Pasadena because it is a destination city, a tourist mecca. They aren’t going to move to Arcadia, Glendale, Temple City, or San Marino.
The nation’s restaurant industry always has some births and deaths. For example, every year about nine percent of Pasadena restaurants close and a similar number open. This cycle is due to consumers’ changing food tastes, restaurant owners’ management abilities and other factors. A minimum wage increase will be across-the board, putting all restaurants on a level playing field.
Fourth, the so-called “solution” that the restaurant industry has been seeking from the City Council is illegal and, as City Council member Steve Madison has noted, would expose the city to expensive lawsuits. Some restaurant owners have suggested that the new minimum wage law exempt “tipped” workers. Los Angeles’s City Attorney’s Office and the California Office of the Legislative Counsel concluded that this idea violates state law. If adopted, it would be struck down by the courts. The city could be liable for challengers’ legal fees. Every city in California that has considered the proposal has rejected it; in fact, not one of the 15 California cities and counties that have enacted minimum wage laws has adopted anything like this idea.
Pasadena has several thousand tipped workers in nail salons, parking lots, car washes, hair salons, and hotels as well as restaurants. An exemption for tipped workers would hurt low-paid workers in these industries, too, and be a nightmare to enforce.
The City Council’s Economic Development and Technology Committee is meeting at 6 p.m. Wednesday, Jan. 27 at City Hall to discuss, and perhaps to vote on, a minimum wage plan. Pasadenans for a Livable Wage — a broad coalition of community and civic groups, clergy, low-income workers, nonprofit leaders, educators, unions and enlightened businesses — is encouraging local residents to attend this meeting and express their views.
A rational discussion about a municipal minimum wage should depend on facts, not fear-mongering. Local residents and tourists alike enjoy the diversity of Pasadena restaurants and will continue to do so after the city adopts a minimum wage.
Peter Dreier, a Pasadena resident, is chair of the Urban & Environmental Policy Department at Occidental College.
(Please see page 5 for a letter to the editor on this subject.)