Minimum wage in Silicon Valley going up in January

The new year will bring a bigger paycheck for those earning minimum wage in Silicon Valley.

San Jose workers will see their hourly rate go from $15.45 to $16.20, while those in Mountain View and Sunnyvale will see theirs bump to $17.10 from $16.30—the highest minimum wage in the region.

Once a national leader in increasing the minimum wage, San Jose continues to fall behind other cities who previously followed its footsteps. After voters approved Measure D to bring wages from $8 to $10 in 2012, six other cities in Santa Clara County also adopted their own increases. A decade later, San Jose is trailing behind all of them—almost $1 less than the highest rate in the region.

“That’s crazy,” Jed Campbell, a barber who works at Hammer & Nails in Willow Glen, told San José Spotlight. He doesn’t rely on a minimum wage job, but his brother does. “Even In-and-Out starts at $18 an hour. I don’t know how people can afford to live with that.”

Palo Alto will hike its minimum wage to $16.45, while Santa Clara, Los Altos and Cupertino all raise the pay floor to $16.40. The cities had a minimum wage of $15.65 in 2020.

Seven other cities in the county— Campbell, Morgan Hill, Gilroy, Monte Sereno, Los Altos Hills, Saratoga and Los Gatos—are lockstep with the state's wage hike, which bumps the $14 hourly rate to $15 at businesses with 25 or more employees.

The wage increase in San Jose reflects city leadership's priorities, said Scott Myers-Lipton, a sociology professor at San Jose State University who successfully led the ballot measure effort with his students in 2012.

"When we passed this, it was such a significant milestone," Myers-Lipton told San José Spotlight. "I didn't think we would fall behind, but we did. I sent most of the City Council our Silicon Valley Pain Index because it includes the (disparities in wages) in there... no one has expressed any interest in revisiting this."

Myers-Lipton said he'll pay his interns in a program he's running the same rate Sunnyvale and Mountain View are implementing.

"If they can do it, why can't we?" he said. "It just doesn't add up."

Even the highest minimum wages in Santa Clara County are still way off from the living wage for the region, which is approximately $27.29 for one adult with no children, according to the Living Wage Calculator designed at the Massachusetts Institute of Technology.

The wage hikes come as the region sees a lopsided economic recovery. Giant tech companies are booming and well-positioned to weather the pandemic, while consumer-facing businesses that mainly rely on minimum wage workers, such as retailers, restaurants and hotels, continue to struggle, reports found.

"There is a concern that (the wage increases) could have a chilling effect on businesses that are already in uneven recovery," Derrick Seaver, head of the San Jose Chamber of Commerce, told San José Spotlight. "And a lot of times, wage increases or increases in business costs overall are simply passed on to consumers, and that tends to impact folks that are on the lower end of the income scale."

The increased rates might help local businesses hire and retain more people, but they could also drive owners and employers to cut positions to accommodate the new expenses, Seaver added.

Faye Garcia is working two minimum wage jobs—at Willow Glen Sweet Shoppe and Vitality Bowls—to support herself through college. She is living with her mom, who also relies on three minimum wage jobs to make ends meet. For them, any little increase helps.

"It's been challenging, especially during the pandemic," Garcia said, adding that sometimes she was told to stay home because of possible COVID exposure and would miss a shift. "Personally, the increase would be very helpful. Everything is super expensive here."

Several doors down from Garcia's gift shop, Wila Tipcharoen at Tarah Thai Kitchen doesn't share the same enthusiasm about the new wage hike. Tipcharoen, also earning minimum wage at the restaurant, worries that the increase in the minimum wage will only drive up prices.

"So even if I get more income, it's not like I will have a bigger savings," she said. "I'd have to spend more on things that are already so expensive."

She was shocked to learn that workers in neighboring cities, especially in Mountain View and Sunnyvale, have been earning more than those who work in San Jose.

"Those cities aren't even that busy," she said, juggling between to-go orders and customers in the restaurant during the lunch rush. "So there's less work there, but people get paid more."