Special City Council Meeting on Minimum Wage Ordinance Amendment - November 30, 2023

This special meeting of the Half Moon Bay City Council focused on a potential amendment to the local minimum wage ordinance. The Council received an update from staff and heard public testimony. Council members expressed support for increasing the minimum wage to $20 per hour, with some advocating for a phased approach and differentiation by business size. Staff was directed to gather more detailed data on business sizes and industry impacts and return with specific scenarios for a January 2024 meeting.

Public Comments & Testimony

• Kristaline Gee, CEO of the Coastside Chamber of Commerce, presented survey results from 23 Half Moon Bay businesses. She noted that while no employer opposed a living wage, many cited challenges: 17 businesses would need to increase pay, 11 would pass costs to consumers, 6 indicated they would likely close if the minimum wage rose to $19, and entry-level workers (e.g., school kids, seniors) could be priced out. She also stated that a $2 wage increase effectively costs employers about $5 per hour due to taxes and insurance.
• Rabbi Musha, a local faith leader, spoke in favor of raising the minimum wage, citing social justice principles and the need to support low-wage workers.
• Joanne Rakowski spoke in favor of a $19 minimum wage, providing economic context: at $19/hour, a full-time worker earns $39,150 annually (very low income in San Mateo County), while the average one-bedroom rent is over $2,700/month, requiring an income of $94,545 to afford at 30% of income. She supported the increase as a step toward a living wage.

Discussion Items

• Staff Presentation: Lisa Rossi and Bryan Lopez presented research on federal, state, and local minimum wage trends. They noted the federal Raise the Wage Act of 2023 (proposing $17/hour by 2028), California's fast-food minimum wage of $20/hour (effective April 2024), and healthcare worker increases. For Half Moon Bay, the current minimum wage is $17.01 (effective Jan 2024). Staff discussed options: phased increases over time, differentiation by business size, CPI caps with carryover provisions, and immediate implementation. They also referenced a Chamber survey: of 23 respondents, 17 said they would need to raise pay, 11 would pass costs to consumers, 6 would likely close, and 5 reported no impact. No businesses have closed specifically due to the existing minimum wage ordinance.
• Councilmember Rarback supported a $20/hour minimum wage as soon as possible, citing economic justice.
• Vice Mayor Jimenez supported $20/hour, noting that even at $20, a full-time worker earns under $40,000/year, which is below the poverty level for families in San Mateo County. He referenced past opposition to earlier increases that did not materialize (e.g., a large nursery that remained in business).
• Councilmember Brownstone supported at least $19/hour, suggesting a two-stage increase: to $19 quickly (a 10% increase similar to 2020) and then to $20 after six months or a year. He noted that a 10% increase would bring the wage close to $19.
• Councilmember Ruddock supported $20/hour for larger businesses (e.g., 26+ employees) immediately, with a phased path for small businesses (e.g., to $19 or $18.50 then to $20). She emphasized the need to help small Main Street businesses adjust.
• Mayor Penrose favored a minimum of $20/hour, possibly in a two-year step process. She cited research showing minimal impact on inflation and employment, and noted that the survey responses did not indicate widespread business opposition: 11 of 23 would pass costs to consumers, 6 would close, 5 reported no impact, and only 1 would relocate.
• Staff provided business license data: 591 businesses with 0-5 employees, 507 with 1-25 employees, 38 with 11-24, 15 with 26-50, and 2 with 100+. The total number of businesses with 26+ employees is 20. Staff noted that data on part-time vs. full-time was not collected, and industry breakdowns (e.g., farm workers, downtown businesses) were not yet available.

Key Outcomes

• Council directed staff to return with more granular data on business sizes by industry and geography, particularly for downtown Main Street and farm worker communities.
• Staff will prepare several scenarios for a minimum wage increase, likely to $20/hour, with potential differentiation by business size (e.g., larger businesses implementing sooner) and a phased timeline (e.g., up to two years).
• No formal vote was taken; the discussion was a work session to provide direction. Staff will bring back a revised ordinance for consideration in January 2024.