Countless Pasadenans are set to get a raise Wednesday as the city’s minimum wage increases to $15 per hour for larger businesses and $14.25 per hour for smaller ones.
The increase has been in the works for years, and the schedule was set long before a virus that would become known as SARS-Cov-2, or the novel coronavirus, emerged and encircled the globe.
The wage increase was divided into two steps, with different wages depending on the number of workers employed by a business.
The minimum rate for Pasadena businesses with 26 or more employees rose to $14.25 per hour on July 1, 2019. The wage for businesses with 25 or less employees was raised to $13.25.
As of Wednesday, all businesses in the city with 26 or more workers must pay them at least $15 per hour, while smaller businesses are required to provide a $14.25 per hour minimum wage.
Businesses have approached the city and urged officials to hold off on the increase due to the economic hardship brought on by the COVID-19 pandemic in recent months, and activists have countered that the increase is vital for workers. The plan was not altered.
California’s minimum wage is on a similar, but slower, trajectory. Larger companies will be required to pay employees at least $15 per hour by Jan. 1, 2022, while smaller businesses are required to pay a $15 per hour minimum wage by Jan. 1, 2023.
Mayor Terry Tornek said he supports the increase and does not agree with calls to roll it back due to the pandemic.
“I think from business to business, the, the difference between the current wage and what’s supposed to happen July 1st certainly would make a difference for all of them. I don’t know that it’s the definitive difference,” Tornek said in an interview last month.
“We were getting a lot of pressure to roll that back long before the COVID crisis hit. And, frankly, to try to help the businesses is laudable, but to help (them) on the backs of the people who earn the least in our workforce is not the way to go.”
Tornek said the commonly-held idea that minimum wage positions are only starting positions is false.
“For a lot of people, this is the way that they earn. They don’t get beyond the minimum wage and they are trying to get by,” the mayor said. “It’s the lion’s share of people who (will be) earning $15. The starter wage thing is just not true.”
The decision to increase the city’s minimum wage was done with a great deal of community input and research.
“I insisted that we should wait for the city of Los Angeles and the County of Los Angeles to act so that we wouldn’t be isolated and on our own,” he said. Once the minimum wage was increased in the city of L.A. and unincorporated county areas, the timing was right for Pasadena to act.
Not everyone is on board with the plan.
Chamber of Commerce President Paul Little said it’s not a good move, especially amid the current economic climate, and could lead to increased job loss.
“No one is ready for increased costs of any kind,” he said.
Too many businesses are struggling to survive to afford the increased expense, he said. “Right now, every dollar that goes out is a dollar not being used to support businesses that are teetering on insolvency and closure,” Little said.
“Unfortunately, for most small businesses the only way to offset increased costs is through the only line item on their balance sheet that has any give — employee costs,” he said.
“I am afraid we will see more of what has happened since the city council raised the minimum wage the first time — a loss of jobs and a limiting of employment opportunities for the very people the increase was intended to help-minimum wage workers,” according to Little.
Tornek said he was not unsympathetic to the struggles of local businesses.
“Now we have a crisis and businesses are going under and some of them are not going to come back. And so they’re desperate for some relief,” he said. “And if we can give them some kind of relief, we should do it.
The city has already rebated underground utility tax money to businesses, and further ways to help them are under consideration, including raising both public and private funds to help subsidize businesses, Tornek said.
But halting or reversing the minimum wage increase is tantamount to “asking the workers, the lowest-wage workers, to make that contribution. And I don’t think it’s fair,” he said.