Biggest jump in minimum wage since 2015 in San Francisco

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The San Francisco minimum wage will rise by more than a dollar in July 2023. The jump, the biggest since 2015, is due to the inflation the city experienced last year.

Effective July 1, 2023, San Francisco employers will be required to pay employees at least $18.07 an hour. That’s more than 6% more than the city’s base salary of $16.99 today.

The San Francisco minimum wage is tied to inflation and increases each July based on the consumer price index for workers in the San Francisco-Oakland-San Jose metropolitan areas. Proposition J, an ordinance passed by city voters in 2014, requires annual adjustments to the cost of living.

“I don’t think [the new wage is] will have a particularly strong effect,” Ted Egan, the city’s chief economist, wrote in an email. “In inflation-adjusted dollars, that’s not growth at all.”

Since the recovery from the pandemic began, the market rate for workers who can claim in low-wage industries has risen much faster than inflation, Egan said.

“I think labor shortages are a bigger problem for most businesses these days than raising the minimum wage,” he wrote.

Laurie Thomas, executive director of the Golden Gate Restaurant Association, said she believes high inflation will push the minimum wage even above $18.07 last year. But still, she expects the new rate to have a ripple effect across the city’s businesses.

“Will it put pressure on the whole business? Yes,” Thomas said. “What is going to happen? We’ll have to raise prices.”

On the other hand, she acknowledges that many low-wage workers have themselves struggled with the burden of inflation.

“I’m sure the workers will be delighted. They’ve noticed that their costs are rising,” Thomas said.

Carl Kramer, co-director of the San Francisco Living Wage campaign, welcomed the announcement. The pay increase will help support the many low-wage workers who have been forced to leave San Francisco for cheaper Bay Areas but still face “super-commutations” to work in the city, he said.

When Proposition J was first passed in 2014, the base wage for workers in the city was $10.74. The measure charted a series of pay raises to bring it up to a minimum of $15 before setting a standard for automatic annual increases based on inflation.

The sharp inflation in the US hit the headlines in 2022. While San Francisco was not hit as hard as most of the country, commodity prices were still rising, putting pressure on local businesses and causing a price shock for essential goods such as the cost of basic commodities such as gasoline and bread increased.

While a comprehensive national minimum wage database does not exist, minimum wage data for the nation’s 79 largest cities compiled by SmartAsset suggests that San Francisco’s new minimum wage will place it in the top hourly wage tier in the country. behind only a few select other places. For example, in Seattle, employers must pay at least $18.69 an hour, while Mountain View has a minimum hourly wage of $18.15.

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