BY EMILY MIBACH
Daily Post Staff Writer
Menlo Park City Council is moving toward a $15 an hour minimum wage, though companies with union contracts will be able to ignore the new law.
On Tuesday (Sept. 10) the council voted 4-1, with Councilwoman Catherine Carlton abstaining, to have employers workers at least $15 an hour starting Jan. 1.
Carlton said she supports a $15 minimum wage, but wants the city to allow small businesses to take steps to get there.
Small business owner says it will hurt
Anna Chow, co-owner of Cheeky Monkey Toys, said she is worried about how her business will deal with the increase from $11 an hour to $15.
Currently, the city’s minimum hourly wage is $11 for companies with 25 or fewer employees and $12 for employers with 26 or more employees. This is the same as the state’s rate.
Chow said right now the only people being paid less than $15 are students who work at the toy store part time.
Chow said she sees the need for the wage hike, but wants more time to be able to shoulder it. She said the cost of doing business has already risen with her workers compensation insurance going up 70% and the price of products increasing because of the U.S.-China tariff war.
Carlton said she wants to help smaller businesses such as Cheeky Monkey by creating “steps” to get to $15.
But Councilman Drew Combs said this has been a topic of discussion for a while in Menlo Park and that the city needs to catch up.
Every business will have to pay $15 an hour unless they fit into two loopholes — those with union contracts or workers getting on-the-job training.
For the first 160 hours of employment, the employee is to be paid 85% of the minimum wage.
Union loophole
As for the union loophole, City Attorney Bill McClure told the Post that the union exemption is boiler plate language that most cities include in their minimum wage ordinance and no one asked that the city include it.
The loophole will allow businesses to pay less than the minimum wage if they sign union contracts.
Menlo Park is one of the last cities in the area to raise its minimum wage.
Other cities
• Mountain View’s current minimum wage is $15.65.
• Palo Alto, Los Altos and San Mateo councils each passed an ordinance in 2016 and the amount reached $15 this year.
• Belmont’s hourly wage will hit $15 by 2020. Its minimum wage is currently $13.50 an hour.
• Redwood City will reach $15 by 2020.
• East Palo Alto at its Tuesday meeting will consider a minimum wage ordinance.
What’s better than raising the minimum wage? Reducing rents! Why? Because:
(1) When you allow for income tax and withdrawal of welfare, a dollar *saved* is worth much more than a dollar *earned* (google “EMTR” and “cliff effect”).
(2) Nobody says lower rents would force employers to cut staff!
(3) Nobody says lower rents would feed into higher prices for the poor!
(4) By definition, the benefit of lower rents isn’t competed away in higher rents — as a rise in wages would be. Landlords might even try claw back the *gross* increase in wages, not allowing for the EMTR.
(5) Lower rents mean lower barriers to JOB CREATION. Jobs can’t exist unless (a) the employers can afford business accommodation [low *commercial* rents], and (b) the employees can afford housing within reach of their jobs, on wages that employers can pay [low *residential* rents].
And how do we reduce rents? Impose rent control? NO!! That makes it less attractive to supply accommodation. But a tax on vacant lots and unoccupied buildings makes it less attractive NOT to supply accommodation! A vacant-property tax of $X/week makes it $X/week more expensive to fail to get a tenant, and thereby REDUCES, by $X/week, the minimum rent that will persuade the owner to accept a tenant. Better still, the economic activity driven by *avoidance* of that tax would broaden the bases of other taxes, allowing their rates to be reduced, so that the rest of us would pay LESS tax!