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SD Businesses Aren't All on the Same Page on the Wage Hike

Like the rest of San Diego, business owners are split on a city minimum wage hike.

San Diego’s business community isn’t squarely for, or against, a city minimum wage hike.

High-profile leaders such as Chamber of Commerce CEO Jerry Sanders who have lined up against it are encouraging San Diegans to sign petitions to put the wage increase on a future ballot. Others, such as former Chamber chairman Mel Katz, have urged residents not to sign.

But what do folks on the ground think?

At least 15 companies have endorsed the mandated wage increases, which would increase to $11.50 over three years. Political organizer Jason Roe, who’s helping to lead the anti-wage hike Small Business Coalition, which opposes the measure, said his organization consists of a core group of nearly 70 people.

Few of the business owners in the latter group have publicly identified themselves. Roe said many have preferred to stay out of the limelight due to concerns they’ll be targeted by minimum-wage hike proponents.

Here’s a sampling of what we’ve heard from business owners on both sides, how it might affect workers, businesses and their customers.

The Businesses That Want to Raise the Wage

Business owners who back the wage hike tend to focus on how companies – and the broader local economy – may benefit from the increased pay floor.

• David Gimbel, owner of Voice & Video Rentals, said companies stand to gain by paying workers more.

“Employers who skimp on wages, rob staff of deserved overtime, vacations and sick time and don’t encourage creativity don’t make more, they make less,” Gimbel told Raise Up San Diego, a group that supports the wage hike. “They have more turnover, more cheating and less loyalty and they don’t realize how much money they lose every day.”

• A couple months ago, Modern Times Beer CEO Jacob McKean, who operates locations in Point Loma and North Park, told the City Council he expects to benefit if minimum wage workers get a raise.

“The reality is that the average age of a minimum wage worker in the U.S. is 35 years old,” McKean said. “The overwhelming majority of people who will benefit from this measure live in low-income households which spend the vast majority of their income locally and spend a higher proportion of it than any other households. As a small business owner, I know we’ll benefit from a healthier, more prosperous San Diego.”

• Barbara Bry, chief operating officer of Black Bird Ventures, told reporters at a June press conference that hiking the minimum wage would help San Diegans currently earning that wage.

“An employee paid the minimum wage cannot meet the basic cost of living in San Diego,” she said. “The measure proposed by Council President (Todd) Gloria will make a huge difference in the lives of hundreds of thousands of San Diegans.”

Note: Bry is a former editor of Voice of San Diego. She stepped down in 2005.

The Businesses That Oppose The Wage Hike

Business owners who’ve come out against the minimum-wage increase say more money for workers could come with unintended consequences for businesses and their customers.

• Susie Baumann, co-owner of the Bali Hai and Tom Ham’s Lighthouse restaurants, said businesses like hers are already dealing with a plethora of increasing costs that are hitting their bottom lines.

“There are a lot of pressures on the restaurant business right now – our gas and electric bills are up 15 to 18 percent, effective Sept. 1, (2013),” Baumann told U-T San Diego last year. “The restaurant industry is pretty much opposed to increasing the minimum wage across the board because most of our employees are tipped employees, receiving the bulk of their wages in tips.”

Baumann and others have criticized the latter approach. Earlier this year, she told Voice of San Diego her servers at Bali Hai already make an average of $36 an hour without the wage hike.

• Ann Kinner, owner of Seabreeze Nautical Books & Charts in Point Loma, argues those workers won’t necessarily benefit. They may end up working less, or face higher costs when they shop or pay for services.

“I can’t increase my costs like some businesses can,” Kinner said at a recent press conference. “The only thing I can do is cut the number of hours that I am paying someone to work in my store.”

Kinner, who has one employee, said the state minimum wage increase that went into effect last month has already made life more difficult.

• Laurie Edwards-Tate, CEO of home health group At Your Home Familycare, said state mandates mean her customers will be hit with increased costs if the city’s hike survives the referendum process.

“People who are middle and upper middle incomes, people who are retired, people who are on fixed incomes will not be able to afford this care,” Edwards-Tate said. “A 44 percent tack-on is going to do nothing but devastate our already stretched senior and disabled programs.”

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