City officials and business owners remain divided on Pasadena’s minimum wage, which rose to $13.25 on July 1 for businesses with 26 or more workers. Under the city’s wage law, small businesses with 25 or less employees are now required to pay workers at least $12 an hour.
Local restaurant owners say they fear that competitors in nearby cities that are on the state’s minimum wage schedule, which reached $11 at the beginning of the year, will have an unfair advantage in keeping prices low by not being forced to pay their employees more money.
“Every small business in Pasadena is operating at an unfair disadvantage because the City Council voted to fast track the pathway to $15 per hour two years ahead of the timeline set by Gov. Brown and the majority of the cities in California,” said restaurateur Robin Salzer.
In the year prior to passage of the Pasadena minimum wage law in February 2016, several high-profile restaurants had closed their doors, among them Dona Rosa, Villa Sorriso, Fu Shing, Jakes, Margarita Jones, La Fiesta Grande and Major Dave’s Chicken.
Salzer said he wants to see the local ordinance come back to the City Council sometime this year for a review of its impacts on local employment. That meeting, which is scheduled to happen next year, could decide whether to suspend the proposed increase for 2019. The local minimum wage is due to rise to $14.25 by next year and to $15 by 2020 — three years ahead of the state and other cities and counties, including the city and county Los Angeles.
On Jan. 1, the state minimum wage rose to $11 and will incrementally rise to $15 an hour in 2023.
In February, the Pasadena City Council is expected to review the impacts of the minimum wage increases on reducing poverty, unemployment, job creation, and the overall business climate.
At that meeting, the council is expected to decide on approving or suspending the next increase.
Beginning July 1, 2022 the local hourly wage will be adjusted annually by an amount equal to the expected increase in the Los Angeles-Riverside-Orange County consumer price index for urban wage earners and clerical workers.
“Uniformly, the council believes each worker in our community deserves a livable wage,” said Councilman John Kennedy. “That belief is good for building and advancing a world-class city. However, we must review the analytics to ensure that we are moving to $15 an hour in a manner that keeps our business community growing and healthy to make job growth possible.”
During his election campaign in 2015, Mayor Terry Tornek said he supported the idea of increasing the minimum wage but wanted to wait to examine ordinances passed by the Los Angeles City Council and Los Angeles County Board of Supervisors. The Pasadena council unanimously approved the citywide minimum wage in 2016.
Increasing the minimum wage was opposed by members of the Pasadena Chamber of Commerce, who favored smaller pay hikes. Under that proposal, minimum wage would have increased to $12.50 by 2020, and then stop there.
“We have seen some impacts around the edges,” said Chamber of Commerce President Paul Little. “There are fewer employees in businesses that hire minimum-wage employees. We have seen restaurants close, but it’s hard to say if it’s just because of the ordinance. Several factors could play a part in it — rent increases, cost of materials and labor costs are all factors.
“Restaurants are being replaced by chains. At the same time, we are seeing places cope. Some places are opening later and closing earlier. You’re going to see more of that, I would expect,” Little said.
The council received about a dozen letters from restaurant owners and officials at local nonprofits opposing the increase.
Several public hearings were held to give all sides a chance to comment on the issue. However, restaurant owners still claim they were not allowed a chance to express their views.
During a tense meeting in 2016, several local restaurant owners took their complaints directly to Tornek. During the sometimes tense gathering, restaurant owners attempted to call Tornek on the carpet for an alleged promise he made after the council began discussing raising the minimum wage.
“We were promised our voices would be heard,” said Michael Hawkins, a partner at Green Street Restaurant. “But it went straight to Ed Tech,” he said of the council’s Economics, Development and Technology Committee.
Tornek responded that the owners were heard, but they didn’t get the result they wanted. Business leaders left the meeting even more disgruntled.
In April 2015, Seattle became the first city to establish a path to a $15 minimum wage after nearly two years of discussions and studies. After that ordinance was passed, some restaurants increased prices and instituted no-tip policies. Unemployment decreased from 6.3 percent to 5.2 percent.
Several restaurants shut down, but those business owners said that the ordinance did not play a part in their considerations, instead associating location with their decisions. As of September, the city of Seattle was issuing about 25 restaurant permits a month.
Shortly after that, other cities throughout the country began raising the minimum wage.
Jon Pollard, Pasadena’s code compliance manager who has visited hundreds of local businesses since the council voted to increase wages, said very few business owners have complained to him about paying more.
“A few people said it would cause difficulties, but by and large there have been few complaints,” Pollard told the Pasadena Weekly.
City Councilman Tyron Hampton said he has become concerned about the negative impact higher wages might have on local businesses.
“I have seen places with higher prices and some businesses that are open fewer hours,” Hampton said. “The business owners are trying to figure out how to pay higher salaries without laying people off. We definitely needed the wage increase, but since we passed it, I think we need to assess it. It’s smart to do that.”
Hampton said he has seen more self-service kiosks in local businesses and admits he was surprised by a visit to a McDonald’s in Riverside that had no cashier.
“There was no one at the cash register,” Hampton said. “You insert cash or card in a machine and you order on a screen.”
Despite the increase in the wage, it could still be almost impossible for single minimum wage earners to live in Pasadena.
The average rent for a one-bedroom apartment in Pasadena has risen more than 51.7 percent in the past six years, with rents on some one-bedroom apartments totaling as much as $2,200 a month.
“I personally support an increase in the minimum wage, but I do have a strong disagreement in what I consider a flawed process and implementation of the Pasadena Minimum Wage Ordinance,” Salzer said.