News

Supervisors OK county's first living-wage plan

Companies and nonprofits contracting with Santa Clara County must pay employees up to $19 an hour

The Santa Clara County Board of Supervisors today approved its first-ever resolution to require companies and nonprofits with county contracts to pay a living wage as of July 1.

The supervisors voted for the combined ordinance and policy direction to create an hourly wage of $19.06 for employers with county contracts who provide no worker health and retirement benefits and $17.06 for those who do, according to its co-sponsor Supervisor Ken Yeager.

Supervisor Dave Cortese, also a co-sponsor, said at today's meeting that the county's plan would mirror San Jose's living wage policy, with hourly rates reviewed each year and annual cost of living adjustments.

The living wage is needed to help working families meet the high cost of living in the county, where many low-wage earners have to seek county services to meet their basic needs, Yeager and Cortese stated in a joint memo to the board.

Both hourly and salaried employees working for contracted commercial firms and nonprofit groups would receive at least one hour of sick leave per 20 hours worked to a maximum of 12 days earned per year to cover employee sick days or caring for an ill family member.

The living wage would apply to county contracts worth at least $100,000, contractors employing 20 workers or more and individual employees who work at least five hours a week in the contract.

The new rules would take effect on July 1 and during the interim, county staff is directed to study and report on the costs of the higher wages to contractors, specifically how it would impact smaller-budget nonprofit groups that provide county services, according to Yeager.

Cortese said the board has the right to get rid of parts or all of the ordinance should it turn out its costs are too high.

The discussion among board members before the vote was contentious at times, as city officials could not provide an estimate on how much the living wage would actually cost versus the current state minimum wage of $9 per hour.

County Executive Jeffrey Smith said the cost increase based on the higher living wage for the county's for-profit and nonprofit contractors could amount to "the many tens of millions."

Smith said the county has about 2,000 service contracts worth $2.2 billion and if labor costs for just 1,000 of those contracts were to increase by $40,000 due to the higher wage, it would amount to $40 million more for contractors.

The county should not be expected to cover the increased labor costs from the new wage borne by for-profit contractors and will work with the nonprofits until June 30 to help them prepare it, according to Smith.

The new wage rate, based on the experiences of 12 other jurisdictions with a living wage such as San Jose, San Francisco, Oakland and Hayward, would increase the county's contracting costs by just 0.035 percent

of its total budget, Smith said.

For Santa Clara County, with a budget of $4.9 billion, that cost would be $1.7 million, he said.

San Jose enacted its living wage policy in 1998 and has not reported any significant negative impacts since, he said.

Supervisor Joe Simitian said he supported a living wage as a concept but that it did not make sense for the board to approve one without first knowing how much it would cost.

The county should at least set a cap to limit future costs should there be unintended consequences for the county down the road, Simitian said

"I'm worried our board will do the right thing in a wrong way," he said.

The vote for the living wage plan was close, with supervisors Yeager, Cortese and Cindy Chavez for, Supervisor Mike Wasserman against and

Simitian abstaining.

Wasserman said he was concerned that the proposed ordinance had "significant unknowns" as the county prepares to face $120 million in payroll costs next year.

Simitian offered two amendments for the ordinance, one to delay passing it until May to give county staff time to report on how much the higher wages would cost and another to cap the cost of implementing it at $5 million, but both failed by votes of 4 to 1.

— Bay City News Service

Comments

4 people like this
Posted by MAS
a resident of another community
on Dec 10, 2014 at 7:40 am

What is the county thinking? They can't afford to provide services as it is today so they are going to increase the cost of providing the services they do blindly? I appreciate Simitian trying for something rational and can't understand why Wasserman opposed it.


1 person likes this
Posted by A talking cat
a resident of Old Mountain View
on Dec 10, 2014 at 11:02 am

If you can't afford to pay someone a decent wage for their services, then you can't afford their services.


3 people like this
Posted by Robert
a resident of Slater
on Dec 10, 2014 at 2:41 pm

How nice for the County to be so generous with taxpayers dollars. The private sector is accountable to keeping wages at a point that is not going to kill the business that pays them, but the County just raises the taxes, how nice. This reminds me of the Feds who just keep printing money because they can. If I had a printing press or could tax someone else I'd pay $19.00/hr too; hell why not $25.00/hr, who is going to stop us?
Socialism stops when you run out of other peoples money to spend. Margaret Thatcher


2 people like this
Posted by I'm not an economist
a resident of Rengstorff Park
on Dec 12, 2014 at 9:11 am

Excellent points by Robert. The county will just be charged the higher wages for services they contract out to and the taxpayers will foot the bill. A private business would never do this since it would be uncompetitive, but the county has monopoly on some of the services it provides so it can behave inefficiently


2 people like this
Posted by Ignorance
a resident of another community
on Dec 15, 2014 at 12:22 pm

No, you are not an economist. Nor are you educated. Nor are you astute. Really, the list goes on...

If you want to hire people at below living wage rates, nobody is stopping you. Why are you objecting if the community only wants to hire people at rates that allow them to live? That is our right. Don't like it? Vote people in that wish to abuse the workers. Can't get in like-minded greedy people? Then, move away. Go to a state where slave-wage polices have damaged economies--also called "red states". Enjoy!


Like this comment
Posted by I'm not an economist
a resident of Rengstorff Park
on Dec 15, 2014 at 3:43 pm

You are the ignorant one. If you want to pay higher wages then you are free to do so. No one is stopping you. But not with other peoples money. I want government to provide services at the lowest cost and the best quality. You are OK with paying excessive amounts for services which means some services will be cut or not offered because the county is on a fixed budget. No one is abusing workers since all labor is voluntarily offered. If you feel so strong about this you should offer more in taxes to pay for excessive wages.


1 person likes this
Posted by Hmmm
a resident of another community
on Dec 15, 2014 at 4:32 pm

" I want government to provide services at the lowest cost and the best quality."

Lowest cost AND best quality?! Yup! Definitely NOT an economist. People like you vote down every tax possible, yet have your hand out wanting services from the government. How childish!


1 person likes this
Posted by I'm not an economist
a resident of Rengstorff Park
on Dec 15, 2014 at 4:38 pm

At hmmmm

learn some economics and maybe you can make some better arguments .


1 person likes this
Posted by Huh
a resident of another community
on Dec 15, 2014 at 5:02 pm

Well, not-an-economist... Please do instruct us on how the government can provide a service at the highest quality AND the lowest price.

We're waiting...


Like this comment
Posted by I'm not an economist
a resident of Rengstorff Park
on Dec 15, 2014 at 10:46 pm

One way would be to outsource and take competitive bids. It's pretty easy. Of course complicated for the economically illiterate.


2 people like this
Posted by Derp
a resident of Old Mountain View
on Dec 16, 2014 at 2:20 pm

Gee not economist person, Just because the county requires its contractors to pay their employees a living wage, doesn't take away the competitive bidding process.... Don't you understand anything at all?

I'm in favor of this. Most government projects are built for the long term and it's important that the people doing the work are decently compensated.


Like this comment
Posted by @Derp
a resident of Rengstorff Park
on Dec 17, 2014 at 6:24 am

@Derp

"I'm in favor of this. Most government projects are built for the long term and it's important that the people doing the work are decently compensated."

Paying more for services than the private sector only means bureaucrats are overpaid. The process is not competitive since vendors will raise prices for the public sector compared to the private sector.


1 person likes this
Posted by @@Derp
a resident of another community
on Dec 18, 2014 at 5:12 am

"Paying more for services than the private sector only means bureaucrats are overpaid. "

Uhhhh.... Did you even read the article? This new rule would only require that staff at these companies be paid a minimum of $19/hour. Do you really think that the "bureaucrats" at these firms (managers) currently make LESS than $19/hour? That's $38k/year. Ridiculous...they make so much more.

The staff at these firms that are building our bridges, performing tests for toxicity, and other critical functions could be paid minimum wage. Who in their right mind thinks that is a good idea?

Fortunately, the ignorant are being outvoted by the intelligent. Making sound investments in our people and our infrastructure is happening. If you don't like it, there are plenty of dirt-poor "red states" that implemented "business-friendly" policies. Move there and enjoy!


Like this comment
Posted by @derp
a resident of Cuesta Park
on Dec 18, 2014 at 8:53 pm

You miss the point overpaying the low end workers means raises for other workers to keep the relative salary structure. It's easy to say it's ok to waste money when it's not yours,


2 people like this
Posted by @@derp
a resident of another community
on Dec 18, 2014 at 11:01 pm

"You miss the point overpaying the low end workers means raises for other workers to keep the relative salary structure."

No, it does not mean raises for other workers. Or rather, if it does, then that is the company's choice. If they are paying truly competitive wages at the 19/hr and higher then what are those employees going to do? Quit and go to another firm for the same or less money?

Greed AND ignorance is not a good combination to have in a voter. Please skip the election.


Like this comment
Posted by @derp
a resident of Monta Loma
on Dec 19, 2014 at 1:30 pm

You obviously have no clue how the public sector and private sector work. Learn some economics and maybe you could make better arguments. You claim of greed is silly.


2 people like this
Posted by Resident
a resident of The Crossings
on Dec 19, 2014 at 2:19 pm

I'm glad the county is setting this policy. I've seen it done in other areas and it worked out wonderfully. It actually improves the local economy and builds a better community.


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