CC 10-20-2020 Item No. 12 Minimum Wage Update_Staff PresentationOctober 20, 2020Angela Tsui, Economic Development ManagerOrdinance for a One-Time Adjustment to Cupertino 2021 Minimum WageCC 10-20-20 Item No. 12
Background●In April 2016 Governor Brown signed the Minimum Wage Law SB 3, which increases the State minimum wage to $15 by 2022.●Recognizing the higher cost of living in Silicon Valley, the Cities Association recommended cities increase to $15 by 2019.●Key findings in the economic analysis indicated an increase to the minimum wage would significantly increase average earnings of low-wage workers and their families, with relatively minor impacts to businesses and consumers.
Background●In 2016 City Council approved Ordinance 16-2151 and the minimum wage for 2017 was $12 with the intent to reach $15 in 2019.
Background●At that time other South Bay cities adopted similar ordinances.●Cupertino, along with the neighboring cities of Los Altos, Palo Alto, and Santa Clara established a $12 minimum wage rate for 2017.●Annual adjustment amounts for all four cities were the same for 2018 and 2019. ●Cupertino’s minimum wage rate diverged in 2020 due to a calculation difference (rounding down vs. up).
Current Ordinance
Current 2020 Rates in Santa Clara County
Expected Rate Changes for 2021 (partial list):●If no true-up adjustment, Cupertino’s 2021 rate will be $15.60
Calculation Methodology●Using the Bureau of Labor Statistics Bay Area Consumer Price Index (Urban Wage Earners and Clerical Workers, San Francisco-Oakland-San Jose, CA, the August 2020 (293.062) is subtracted from August 2019 (288.514), then divided by August 2019 (288.514).(293.062-288.514)/288.514= .01576 or 1.576% ●2020 rate of $15.35 is multiplied by 1.01576 to determine the effective rate. $15.35* 1.01576= $15.5919●Per the Ordinance the increase should be rounded to the nearest nickel ($.05) = $15.60 per hour effective January 1, 2021.
Recommended Action ●Conduct first reading of Ordinance No. 20-XXXX to set the Cupertino minimum wage for 2021 at $15.65 an hour.