Richmond’s Minimum Wage Ordinance

The topic of minimum wage has been under great discussion in the past few years, nationally, regionally, and locally.
On January 14, 2014, the Richmond City Council adopted Resolution No. 05-14, which directed staff to draft three
ordinances to increase the minimum wage in Richmond for Council consideration and subsequent submittal to the voters on
the November 2014 ballot.  Specifically, the ballot measures would implement a phased-in approach to increasing the
minimum wage over a certain number of years, would include inflation indexing for the minimum wage in future years, and would provide for certain exemptions.  The City Council later acted on legislation to increase the minimum wage that would not require a ballot measure.

On March 18, 2014, the City Council approved the introduction (first reading) of an ordinance increasing the local minimum
wage to $12.32 by 2017.  On April 15, 2014, the second reading of the minimum wage ordinance was before City Council
for approval.  After much discussion, a motion was passed requesting the City Manager's Office to conduct an analysis of
the impacts of the proposed ordinance, and to perform outreach to the Richmond business community, before bringing the
item back to City Council for discussion and review on May 6, 2014.

There was limited time to complete the analysis and outreach directed by the City Council.  Nonetheless, staff from the City Manager's and City Attorney's Offices were able to complete some research and gain a working knowledge of the minimum
wage issue, conduct a survey regarding the potential impacts of the ordinance on Richmond businesses [1], conduct a
meeting for the business community to ensure that additional feedback was received and could be provide to City Council,
and prepare a report.

The objectives of this report are to:
  • Provide a brief overview of the minimum wage legislation at the federal and state level;
  • Highlight case studies from San Francisco, CA and San Jose, CA as two California cities that have previously enacted legislation;
  • Provide information concerning consideration of minimum wage legislation in other cities, particularly Oakland, CA and Berkeley, CA, which are currently considering local and regional approaches, respectively, to increasing the minimum wage;
  • Describe the minimum wage landscape in Richmond;
  • Examine the potential impacts of a minimum wage increase on workers, businesses and the Richmond economy;
  • Provide the City Council with feedback from the Richmond business community;
  • Provide recommendations to City Council in areas such as process, language changes and clarification, exemptions and enforcement.
Findings documented n this report include:

  • The majority of research we examined described positive impacts for worker and their families from increases to the minimum wage, with the exception of out who are often less skilled, experience and educated;
  • Research regarding the impacts to the business community and on job loss is more contentious, and there were arguments on both sides as to whether or not there were overall negative impacts to the business community from an increase to the minimum was.  On a macro-level, research showed that job loss due to an increase in the minimum minimum wage was minimal and that the increase in payroll costs to businesses could be offset by small increase in the price of goods and services.  Research also suggested that businesses would enjoy benefits such as increased employee efficiency, less job turnover, reduced training costs, and increased consumer spending.  While the majority of research findings were more  optimistic with respect to business impacts, research was also found and information collected that gives a differing opinion, and concludes that an increase in the minimum was will negatively impact the business community.  Based on research and comments from the Richmond business community, those negative impacts could include reduced employee hours, job loss, relocation, increased prices and even business closures. 
  • Case studies from San Jose and San Francisco provided promising practices in the areas of outreach and education to employees and employees, and regarding enforcement, that should be examined further by Richmond prior to implementation of minimum wage legislation.
  • An increase in the minimum wage can have multiple benefits to the economy, including higher wages for those at or near the minimum wage, increases in consumer spending, and reduced reliance on government assistance programs by some employees currently working minimum wage jobs.
The following items can be found in the Preliminary Report on the Potential Impacts of Richmond's Minimum Wage Ordinance on Workers, Businesses and the Economy
  • Attachment A - Tables regarding current minimum wage legislation from a Institute fro Research on Labor and Employment report entitled, Local Minimum Wage Law: Impacts on Workers, Families and Businesses by Michael Reich, Ken Jacobs, and Annette Bernhardt
  • Attachment B - Comments from Business Meeting on Tuesday, April 29, 2014
  • Attachment C - Copy of the survey that was distributed to the business community from April 24, 2014 - April 30, 2014
  • Attachment D - Results from Business Impact Survey

[1] The data received from Richmond businesses through the meeting on April 29, 2014, and through the survey was not obtained using scientific methods.  Any business that received the notice for the meeting was able to attend and provide feedback and any business that received the notice for the survey was able to respond.  The meeting and survey announcements were provided in English and Spanish.