San Jose trails neighbors on minimum wage

Paychecks are increasing in San Jose come Jan. 1, but for some residents it’s barely enough to get by.

The minimum wage in San Jose will go from $16.20 an hour to $17 an hour, but the hike isn’t keeping pace with the rising costs of living in the Bay Area, workers said.

Ahtziri Hernandez, a full-time barista at Voyager Craft Coffee, said living in San Jose on minimum wage is a struggle. At the current wage of $16.20 an hour, employees need to work nearly four jobs to afford a two-bedroom apartment. It’s common for residents, especially the younger generation, to live paycheck to paycheck, the 20-year-old said.

As employees and employers alike work to make ends meet, the price of basic necessities has increased for workers like Hernandez. Bay Area residents saw a 50.1% spike in gas prices this year and a 10.8% jump in food prices.

“(Minimum wage) is going up, but it’s not enough,” Hernandez told San José Spotlight. “I’m not too sure how the future is going to look.”

San Jose was once the minimum wage frontrunner in Santa Clara County. The city significantly increased wages from $8 to $10 in 2012. San Jose workers are now making less than minimum wage workers in about half of the other 15 cities in the county.

Sunnyvale and Mountain View workers top the list, and will make $17.95 and $18.15 an hour next year, respectively. Palo Alto workers will make $17.25 an hour. Cupertino, Santa Clara and Los Altos workers will make $17.20 an hour.

Campbell, Gilroy, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill and Saratoga all have minimum wages that align with state standards, and will increase from $15 an hour to $15.50 for employers with 26 employees or more. Minimum wage in Milpitas already increased this past July from $15.65 an hour to $16.40 an hour. Employers with fewer than 26 employees in these cities will be increasing minimum wage from $14 an hour to $15.50 as well.

Ashley Merz, owner of The Source Zero in San Jose, said she can’t afford to hire additional employees. Her store sells locally made home goods like soap and has two employees who already make more than $17 an hour, she said.

“I’m on the brink of moving out to Silicon Valley because you really have to be making six figures in order to be able to afford to live here,” Merz, 37, said.

Merz said while larger corporations can absorb higher wage costs, small business owners are in desperate need of government programs to keep things afloat.

“(Lawmakers) definitely need to help us out,” Merz told San José Spotlight. “Otherwise they’re only going to have big box name brands.”

San Jose Chamber of Commerce CEO Derrick Seaver said business owners have to juggle budgeting for higher wages while hanging on to consumers as prices increase. Improving the economic health in the region requires a hard look at housing affordability, he added. San Jose’s housing shortage is the worst among major U.S. cities.

“To say that the last two years, three years have been difficult is probably an understatement,” Seaver told San José Spotlight. “What’s driving the cost of employment and expenses for a lot of businesses around here is the cost of housing, and we have to be cognizant of that reality.”

Minimum wage falls short

San Jose is working to provide grants to help small businesses cover rent and other costs, said Nanci Klein, the city’s director of economic development and cultural affairs. But inflation remains a problem, she added.  

“Our responsibility is to support residents and businesses and maximizing the opportunities and quality of life offered by San Jose,” Klein told San José Spotlight. “An $.80 per hour increase in the minimum wage will be a boost to the workers, although unfortunately it won’t change the nature of the region’s high cost of living.” 

Scott Myers-Lipton, a San Jose State University sociology professor who helped lead a successful ballot measure to raise San Jose’s minimum wage in 2012, said the COVID-19 pandemic disproportionately impacted communities of color and small businesses, while Silicon Valley corporations like Apple and Google did well. Corporations need to take on a bigger role in addressing wealth disparity in the region, he added.

The uptick in minimum wage is a small part in addressing wealth disparity, Myers-Lipton said. The region needs long-term solutions like universal basic income programs, he said. Mountain View is starting a basic income program, giving $500 monthly to select low-income families. Santa Clara County is part of a coalition in the Silicon Valley Guaranteed Income Project which recently launched to help 150 families. These families will receive $1,000 per month for two years with no-strings attached. Officials also are working on a program to provide guaranteed income for the county’s unhoused high school seniors.

“We’re the wealthiest country in the world, and we’re the wealthiest area in the wealthiest country,” Myers-Lipton told San José Spotlight. “Shouldn’t there be a basic amount that everyone has if your job doesn’t pay you enough?”

For Hernandez, any outing with friends requires meticulous budgeting depending on how much she wants to save that month. She lives with her parents and shares a home with four other siblings and a nephew. She said moving out is a far-off dream.

“I am concerned,” Hernandez told San José Spotlight. “With the money I’m making right now, I don’t think that I would be able to move out anytime soon.”

Contact Loan-Anh Pham at [email protected] or follow @theLoanAnhLede on Twitter.