As Oakland’s minimum wage rises, a mixed reaction from workers and businesses

A campaign sign promoting Measure FF last October. Photo courtesy of Lift Up Oakland.  Photo by Shira Bezalel.

A campaign sign promoting Measure FF last October. Photo courtesy of Lift Up Oakland. Photo by Shira Bezalel.

Oakland workers earning minimum wage will see an increase on their checks next payday due to a citywide wage increase that took effect Monday. The boost from $9 to $12.25 an hour may sound great to employees, but it wasn’t an easy change for some small business owners.

The minimum wage increase was initiated by a group called Lift Up Oakland, which collected over 33,000 signatures to place Measure FF on the November ballot. It passed with 81 percent of the vote. The measure requires employers to offer an hour of paid sick days for every 30 hours worked and for all service charges at hotels and restaurants to be paid to workers, instead of to management.

Scott Whidden, owner of Fenton’s Creamery and Restaurant located on Piedmont Avenue, said restaurant businesses will need to compensate for the wage increase in other places, like raising prices on the menu. But Whidden is not sure that customers will support higher prices. “The Oakland voters voted for it, therefore they’re going to support it. Are they?” he asked. “We don’t know that. In the business world, you can’t just take anything and everything and throw it on to your menu price and say, ‘Well, that’s where it’s at.’ I can’t sell a scoop of ice cream for eight bucks.”

But Chris Higgenbotham, who’s been an employee at McDonald’s for the past six years, thinks the wage increase is “really good for the workers and for the community.” Before Monday, Higgenbotham was making $9.75 an hour. He was given a $2.50 raise. “It helps us to be able to pay bills on time, it helps people who have children be able to get supplies for them more easily, and to build up our economy in the city,” Higgenbotham said.

Some businesses in Oakland don’t have to worry about the wage increase. Lonna Lopez, an owner at Crimson Horticultural Rarities, a florist and nursery in Temescal Alley, said her business wasn’t affected because they already pay their employees over $12.25 an hour.

At Pegasus Books in the Rockridge district, owner Amy Thomas said they’ve been staying ahead of the minimum wage for several years. But they did raise the pay 25 cents an hour for a few newly hired employees to reach $12.25, even at the chain’s two Berkeley locations, where the minimum wage is $10.00 an hour. “We’re going to be looking at ways to increase that, to stay ahead of the curve,” Thomas said. Even though the wage increase didn’t affect the bookstore drastically, Thomas said, “It’s another way that it’s expensive to run a retail store, so it will have its effects.”

But for customers, the wage increase won’t affect the price of books because they already come at a set price. “We’re just going to try and find ways to increase sales and increase other costs,” Thomas said.

A study released by the UC Berkeley’s Institute for Research on Labor and Economics (IRLE) last summer regarding the Oakland minimum wage hike found that raising the wage would have little impact on business and consumer prices. The study concluded that “operating costs would increase by 0.3 percent for retail businesses and 2.8 percent for restaurants.”

Jennifer Lin, deputy director at the East Bay Alliance for a Sustainable Economy (EBASE), a nonprofit founding member of the Lift Up Oakland Coalition, said many small businesses that EBASE worked with believe the wage increase is the “right thing to do in the long run,” but may be a stretch for the short term. But in the end, it provides minimum wage workers extra money to provide for their families and extra cash to use to go out, she said.

2 Comments

  1. RJack

    I guess when 80% of the voters vote for a substantial cost increase to businesses they had better be prepared to pay substantially more for the goods they produce.
    2.8% increase in operating costs for restaurants?
    Not even close. Expect menu prices to go up 20%

    • Oakland advocate

      Yep, expect prices to go up 20%. But don’t blame the minimum wage or the workers. They’re not getting most of the 20%, and costs aren’t rising 20%.

      Blame the owner, if you’d like, for taking advantage of the opportunity.

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