Wednesday, March 30, 2016
California’s plan for $15 minimum wage could have huge effect
By Hudson Sangree and Hector Amezcua
A landmark plan to raise the state’s minimum wage to $15 by 2022 could create sweeping changes across the industries that rely on low-wage workers and improve the living standards for millions of Californians employed in farm fields, restaurants and retail stores.
“The expanse of the impacts is huge – a 50 percent increase in wages over five years to more than 40 percent of workers in the Sacramento region alone,” Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton, said after Gov. Jerry Brown announced the plan Monday.
The plan, negotiated by Brown, labor leaders and legislators, could head off a similar ballot measure this November and raise the state’s minimum wage by about $1 per year, making California’s by far the highest statewide basic wage in the nation. It would increase the earnings of a full-time minimum-wage worker from $20,000 a year today to $30,000 per year in 2022.
Brown called the wage increase a matter of “economic justice” at a news conference Monday in the state Capitol.
Some cities, including San Francisco and Los Angeles, have already adopted similar proposals, and Sacramento leaders recently approved an ordinance to raise the city’s minimum wage to $12.50 an hour by 2020.
If the Legislature passes the newly announced plan, as expected, its positive effects could include boosting the living standards of the approximately 6 million Californians who earn the current minimum wage of $10 an hour and giving them more money to spend back into the economy.
The negatives could include fewer hours and fewer jobs for those workers, economists and employers said. Farmers who sell their produce out of state could be at a major disadvantage compared with farmers in states and nations with lower wages. And restaurant prices are likely to rise across the board.
The matter is so complicated, and fraught with unintended consequences, that it’s hard to know if the benefits or drawbacks will prevail, Michael said. Either way, he said, “The economic impacts are going to be enormous.”
Owners and employees of businesses that employ the bulk of minimum wage workers offered reactions this week ranging from outrage to joy, but some of their thoughts went beyond neat clichés.
At Monday’s news conference announcing the minimum-wage deal, longtime Burger King worker and activist Holly Dias, of Humboldt County, hugged the governor after tearfully describing how she struggled to support her infant son at the state’s lowest legal wage, which increased this year from $9 to $10 an hour.
“Today our great nation is watching us as history is made,” Dias said.
Fast food restaurant workers nationwide have participated in a campaign, led by labor unions, to establish a $15 minimum wage across the country.
But some restaurant workers interviewed Tuesday said they weren’t so sure the wage hike would be entirely good.
“They don’t think about how prices are going to go up everywhere else to cope with it,” said Gaerael Debise, 19. The cashier at the Buckhorn Grill restaurant in midtown Sacramento makes $10 an hour and helps support his mother and little sister, while attending classes at Sacramento City College.
His co-worker, Eddie Alcantara, 22, said he had worked his way up from $9 to $12 an hour and is now a supervisor at the restaurant. He said he is proud of his accomplishment and thinks others should have to do the same, and not just be paid higher wages from the start.
“The minimum wage now is OK,” he said.
Lots of business owners, and the political groups that represent them, said the wage increase was sure to lead to a decline in employment and higher consumer costs.
The owner of the medium-sized Buckhorn chain of restaurants – which employs 650 workers mainly in the Sacramento region and Bay Area – said he wasn’t happy with the plan. But he said he grudgingly accepted that it is popular with politicians and will likely pass.
John Pickerel, who co-founded the Buckhorn Steakhouse in Winters in 1980, said instead of bemoaning their fate, restaurant operators will have to adopt better business practices. They can’t just keep pushing prices higher, because customers won’t accept it, he said.
“It’s a game changer,” Pickerel said. “A lot of people would rather complain than be proactive.”
Managers will have to train and retain the most productive employees at higher wages, and mom-and-pop cafes with fewer employees could actually have a competitive edge over chains with large numbers of minimum wage workers, he said.
“It’s about being part of the solution and getting people to buy into productivity and believing people can learn things,” Pickerel said. “We can’t use a lot of warm bodies. There’s no room for error.”
One farmer said paying his workers $15 an hour would further undermine his ability to compete with growers in other states and Mexico.
“We’re already at a disadvantage with Arizona, (where farmers) pay their workers $8.05 an hour and we’re at $10. Any further increase is going to put us at a serious disadvantage,” said Joe Del Bosque, owner of Del Bosque farms in Firebaugh.
His workers are harvesting asparagus now at $10 an hour or more, while workers in Mexico harvest the same crop for $10 a day, he said.
“If we can’t compete with them, we can’t grow some of these crops in California anymore,” Del Bosque said.
Yolo County farmer Duane Chamberlain said his workers, who mostly make well above the minimum wage, are starting to cut alfalfa hay this time of year. He said he wouldn’t mind paying all his workers at least $15 an hour with the exception, perhaps, of those just learning.
“My workers are all worth 15 bucks an hour because they’ve been around,” said Chamberlain, who also sits on the Yolo County Board of Supervisors. “Starting people out, it would be nice to hire kids at lower wages because they’re not worth it. They don’t know what they’re doing.”
One of Chamberlain’s workers said he’s happy with the proposed pay hikes.
“To be able to help my family. For my children’s education. I’m glad my boss agrees with the wage increase,” Isaias Aguirre said as he cut hay with his brother Jose Aguirre on Tuesday. Isaias said he sends about $1,000 a month home to Mexico to help his three children.
There are additional reasons, besides experience levels, that a uniform state wage might not make sense, experts said.
Making $15 an hour in rural Yuba County, where the cost of living is relatively low for California, is much different than making $15 an hour in Santa Clara County, the expensive heart of Silicon Valley.
The Massachusetts Institute of Technology’s Living Wage Calculator estimated that for 2014, a single adult would need to make less than $10 an hour to support themselves in Yuba County, while the same adult living in Santa Clara County would need to make almost $14 an hour to pay for rent, food, transportation and other basic costs.
Oregon recently passed a new minimum wage law that took such differences into account. It will gradually increase the basic pay rate in the pricey Portland area to $14.75 an hour by 2022 while only raising the minimum wage in the most rural parts of the state to $12.50 an hour.
Michael, the UOP economist, said it’s something California lawmakers might consider.
“Connections to the cost of living and the economic structure of the community are both arguments to have regional minimum wages,” he said.
Hudson Sangree: 916-321-1191, @hudson_sangree, email@example.com
Local concerns a missing piece in state minimum-wage discussion
By Marcos Breton
A $15-an-hour minimum wage by 2022 seems inevitable for California. That sounds good in theory because who doesn’t want low-income people to live better? It’s certainly good politics from Gov. Jerry Brown, who cut the $15-an-hour deal – pending legislative approval – before it headed to what surely would have been an expensive ballot fight this fall and an odious campaign of class politics over workers’ wages.
But in practice – and on the ground in Sacramento, a city that passed its own minimum-wage increase in October – the inexorable move toward $15 an hour could have unintended consequences that ultimately undermine the stated goal of helping workers.
The state capital is not San Francisco or San Jose. There is no local tech boom creating wealth, pushing wages higher and resulting in an economy that could absorb raising the minimum wage from $10 an hour to $15 over six years.
Sacramento’s unemployment rate may be at 5.4 percent. The region’s housing market may have strengthened. But Sacramento remains short on higher-wage jobs and a culture of job creation.
Moreover, Sacramento has wrapped its identity in the farm-to-fork movement. Locally grown food costs more, and those costs usually are passed on to the consumer. But you can taste the difference when you eat at Mulvaney’s, Hot Italian, DeVere’s Irish Pub, Ella or any other of the other wondrous restaurants that have helped to transform the city.
As a 26-year-resident of Sacramento, I long ago decided that paying more for quality food was worth it, and I have been lucky enough to be able to do so. Locally sourced food is more flavorful, is better for me and supports area businesses and farms. It also supports a food, wine and beer culture that is a source of civic pride and energy and an economic driver for this region.
How will Sacramento’s growing farm-to-fork movement be affected by a significant spike in the minimum wage? How will restaurant owners across the board handle the increases in payroll, payroll taxes and workers’ comp expenditures?
The truth is, nobody knows right now. But what is also true is that many voices – voices that are important to our local economy and identity – didn’t have a spot at the table when the $15-an-hour deal was being discussed.
Furthermore, to express concern about the potential negative impacts of a higher minimum wage is to be called insensitive to working people.
“Whenever I discuss reality, people say, ‘Oh Henry, are you going over to the dark side?’ ” said Henry DeVere White, proprietor of Devere’s Irish Pub and chairman of Region Restaurants.“When I talk to people about it, they see it a different way.”
Many businesses in Sacramento would be affected by the higher state minimum wage, which, under the current deal, would go to $10.50 an hour next year and then gradually to $15. Nonprofit groups, for example, could have a hard time ultimately paying $15 an hour.
But those increases could hit Sacramento’s restaurant and hospitality industries especially hard. Restaurants in particular live and die on tight margins, and raising menu prices won’t necessarily bridge the gap created by higher wages.
“There are only so many discretionary dollars in Sacramento,” said Josh Wood, executive director of Region Business, the umbrella organization representing several trade organizations in the state capital, who questions the wisdom of $15 per hour statewide largely because the cost of living is not uniform across California.
“In smaller markets like Sacramento, a $15-an-hour wage will be like $20 in other markets,” he said. “(This deal) is terrible, reckless.”
By various measures, the cost of living in San Jose is 30 to 35 percent higher than Sacramento. It’s more than 40 percent higher in San Francisco. When restaurants in those cities pass the cost of higher wages on to consumers, there are more people with more disposable income able to absorb it.
In Sacramento, it could become about hard choices. “I’m already at the top of what I think I can charge for a hamburger,” said Chris Jarosz, owner of Broderick Roadhouse in West Sacramento.
Andrea Lepore, owner of Hot Italian, agrees: “We can’t keep passing costs on to consumers. Our market is not the Bay Area. We have to look at other things, such as doing more with less people.”
Even advocates for a higher minimum wage acknowledge that higher unemployment may be a consequence.
In the end, will we see more counter service at our restaurants? Will we see iPads do away with servers altogether? Will we see more restaurants close? Will the bigger chain restaurants have an even greater advantage over smaller local restaurants because of the way they can control costs to deal with higher employee wages? Will farm-to-fork, often already an expensive endeavor, become even more cost prohibitive?
“I would hope that as we move forward with farm-to-fork that we embrace what that all means,” said Mary Kimball, executive director of the Center for Land-Based Learning, a nonprofit that trains young people for careers in local agriculture. “I would hope that we would decide, ‘Yes, this is what we want.’ It’s going to be a hard choice, and I would hate to see us lose our momentum.”
Local concern about a higher minimum wage is a missing piece of this argument. It’s not about being against workers’ rights. It’s about real concerns being ignored in an issue that is far more complex than advertised.
Marcos Breton: 916-321-1096, firstname.lastname@example.org, @MarcosBreton, email@example.com
San Jose Mercury News
California drought rules likely to be relaxed
By Paul Rogers
With the wettest winter in five years having taken the hard edges off the historic drought and a key Sierra snowpack reading Wednesday expected to show big gains, Californians can look forward to substantial relief from mandatory statewide water restrictions.
“We are likely to ease the rules or lift the rules,” said Felicia Marcus, chairwoman of the State Water Resources Control Board. “We are in better shape.”
The board imposed California’s first statewide water conservation rules last May at the insistence of Gov. Jerry Brown — forcing hundreds of cities to limit lawn watering, ratchet up conservation programs and, in some cases, fine residents for using excessive amounts of water. Brown’s goal was to cut urban water use 25 percent on average from 2013 levels. From June through January, urban residents delivered, cutting 24.8 percent.
But with significant rain and snow in recent months, the drought emergency has softened considerably as it enters its fifth year, particularly in Northern California. The state water board is scheduled to hold a public hearing April 20 in Sacramento and will likely make a final decision May 3 on how much water rationing, if any, Californians should expect this summer, Marcus said.
Among the possible changes: lower conservation targets or perhaps no drought targets at all in parts of Northern California that have high rainfall totals, full reservoirs and healthy groundwater basins, she said. But cities in Southern California — with its lower rainfall totals and depleted reservoirs — could continue to see strict rules, Marcus added.
“We’re not interested in keeping these emergency regulations going any longer than we have to, but we want to be judicious,” she said.
The board also is likely to make permanent the water-wasting rules it imposed statewide last year. Those include prohibitions on hosing off pavement, a requirement that all restaurants ask customers if they want water before serving it and a ban on watering lawns within 48 hours of measurable rainfall.
The change between last winter and this one has been dramatic.
On Wednesday, state surveyors will trudge into a snow-packed Sierra Nevada meadow at Phillips Station near Lake Tahoe with TV crews and reporters in tow. The measurement, taken on or around April 1, provides a headline at the end of every winter of how much snow is in the Sierra, which makes up a third of California’s water supply.
The event, however, is largely a media photo opp. State officials on Tuesday already knew that the Sierra Nevada snowpack was at 87 percent of its historic average because there are more than 200 electronic sensors scattered through the Sierra. That’s up from a shocking 5 percent last April 1, when Phillips Station was a barren meadow.
“It’s been a great year. We could not have roadmapped a better ski season,” said Kevin Cooper, a spokesman for the Heavenly and Kirkwood ski resorts near Lake Tahoe.
Last winter, Kirkwood received 124 inches of snow. This year, that has already more than tripled to 440 inches. Heavenly has enjoyed 340 inches this year, four times the 84 inches that fell last winter.
“We’ve seen a lot of skiers and riders return,” he said. “Businesses have been doing really well.”
Other barometers of California’s hydrologic health also are looking good:
State reservoirs: After drenching storms in March, the two largest reservoirs in California, Shasta Lake and Lake Oroville, are now 88 percent and 86 percent full, respectively. And as snow melts in the next few months, the massive lakes, which are critical to the water supply for farms and cities, are expected to fill to the top.
In early December, Shasta, near Redding, was 29 percent full. Its water level has risen 135 feet since then. Similarly, Oroville, in Butte County, was 27 percent full; it has risen 217 feet. Together in the last four months, they have added 4.8 million acre-feet of water — enough for the needs of 24 million people for a year.
Rainfall: After four dry winters, San Jose through Tuesday was at 100 percent of normal. San Francisco was at 103 percent, Oakland 86 percent, Fresno 135 percent and Salinas 116 percent.
Bay Area reservoirs: All seven reservoirs in Marin County are 100 percent full. Santa Cruz’s main reservoir, Loch Lomond, is 100 percent full. Pardee Reservoir, the main reservoir that serves 1.4 million customers of the East Bay Municipal Utility District, is 99 percent full. Hetch Hetchy Reservoir is 72 percent full. And the 10 reservoirs in Santa Clara County are 67 percent full, up from 49 percent a year ago.
But the El Niño storms that delivered rain and snow mostly hit north of Monterey, leaving Southern California dry.
“Everybody down here is disappointed,” said Bill Patzert, a research scientist and oceanographer at NASA’s Jet Propulsion Laboratory in Pasadena. “The storms were headed for L.A. and made a sharp left for Northern California.”
Scientists still don’t know why, he said. And while the soaking storms all but wiped out droughts in Washington and Oregon, rainfall in Los Angeles is at 50 percent of historic average, Riverside 44 percent and San Diego 76 percent.
Water agencies around the state are waiting for the state water board to give them direction. Together, they have lost hundreds of millions of dollars in revenue from selling less water. So they are pushing hard for relief.
“We’ve got to adjust to the changing conditions. Local leaders should have more flexibility,” said Jennifer Persike, deputy director for the Association of California Water Agencies. “We asked the public to go all hands on deck and cut back, and they did it. Now conditions have changed. It’s very important to retain credibility. The boy crying wolf comes to mind.”
But environmental groups are urging caution, pointing out that groundwater basins in many areas remain seriously overdrawn.
“We’re not opposed to reductions in mandatory targets. But we want them to be conservative,” said Tracy Quinn, a senior policy analyst with the Natural Resources Defense Council. “We don’t know what next year will bring.”
Paul Rogers covers resources and environmental issues. Contact him at 408-920-5045. Follow him at Twitter.com/PaulRogersSJMN., firstname.lastname@example.org
Imperial Valley Press
IID makes decisions regarding fallowing program, solar interconnection agreements
By Edwin Delgado
The Imperial Irrigation District Board of Directors voted to deny two of the six solar interconnections proposed during its meeting on Tuesday.
The two interconnection agreements that were not approved were the two projects presented by SEPV Imperial who presented two 3 Megawatt projects in Seeley.
Ramon Castro from IBEW Local 569 urged the board to decline the interconnection agreement for those projects because the developers and IBEW hadn’t reached an agreement to sign a Project Labor Agreement therefore meaning no guarantees for any local hires for the projects.
The developer said that he had every intention of signing a PLA but said that before they could do that they need the agreement to be approved for them to secure the funding they needed for the project.
After pondering a few options Director for Division 3, James Hanks, suggested that the board should vote to approve the project provided that the developer would sign a PLA.
Hanks along with Division 2 Director is Bruce Kuhn voted in favor of the project falling short of the three votes needed for approval. President of the Board Norma Sierra Galindo voted against, Division 1 Director Matt Dessert abstained and Division 4 Director Stephen Benson wasn’t present at the meeting.
The board also gave direction to legal counsel Ross Simmons to meet with both parties to see if there was an agreement they could come to and report back to the board on the April 12 meeting.
The board was also presented with different options to determine the rate, term and volume targets for the 2016-2017 program.
Water Department Manager Tina Shields presented a few scenarios to the board. She said that the Water Conservation Advisory Board recommended the option to take the 17,000 acre-feet of water stored in Lake Mead to have a lower requirement of volume that needed to be fallowed.
Executive Director for the Imperial County Farm Bureau Linsey Dale also supported that option stating that the water stored isn’t safe since IID could be prevented from using it if Lake Mead’s elevation is low.
“Our concern was that we would not be able to get that water out in the future and the idea was to pull it out now,” Dale said.
Two farmers, Ralph Strong, of Holtville, and Craig Elmore, of Brawley, both supported the option with the target of 128,000 acre-feet of water fallowed and not to be taken out of the Intentionally Created Surplus at Lake Mead.
When asked by the board, General Manager Kevin Kelley also suggested that the option presented as scenario 1 was the best to move forward with.
“I think that at this time getting the water out in the middle of these two historic droughts would send the wrong message even though it is a modest amount of water, IID would be better off leaving it where it is,” Kelley said.
Hanks said that he was satisfied to vote in favor of keeping the same rate of $175 per acre foot and put in place a 12-month term starting on July 1, but asked for the final decision on volume to be brought back to the board at a later date.
The proposal passed with a 4-0 vote and the volume targets are expected to be set on the April 12 meeting.
Staff Writer Edwin Delgado can be reached at email@example.com or 760-337-3440.
MID, TID extend agreement on operating Don Pedro Reservoir
By John Holland
The Modesto and Turlock irrigation districts have added five years to their 1990 agreement on how to manage Don Pedro Reservoir.
The extension will maintain the status quo at the massive Tuolumne River impoundment while it completes the renewal of its federal license, said Wes Monier, strategic issues and planning manager at TID, in a memo to his board.
That process was expected to be complete this year, but will go on for at least a couple more years as flows for fish downstream and other issues are hashed out.
The extension of the agreement, which was to expire April 30, won approval from the TID board Tuesday and MID directors March 8.
The 81-page agreement deals with reservoir releases, hydropower generation, capital improvements and other details at Don Pedro. The districts completed the project in 1971 and later drafted the document “to formalize certain operating policies,” as the preamble puts it.
Acre-feet of water in Don Pedro Reservoir when full
Height of Don Pedro Dam in feet
Megawatts of capacity in hydroelectric plant
The agreement placed day-to-day operations under TID, which is entitled to 68.5 percent of the water and power, but oversight comes from a committee that includes both districts.
The districts were established in 1887 and in 1923 completed a much smaller Don Pedro Dam that is submerged by the reservoir.
The capacity of 2.03 million acre-feet has generally served MID and TID well. The water supply can be much reduced during drought, but it is still cheaper and more reliable than in many other districts. The hydropower no longer is the main source for their electricity customers, but it too is inexpensive.
MID also supplies treated river water to the city of Modesto, reducing its reliance on wells. TID has agreed to supply raw water to a proposed treatment plant for Turlock and Ceres.
Don Pedro has to release certain amounts of water for salmon and other fish downstream, something that could substantially increase with the new license from the Federal Energy Regulatory Commission. State officials also are looking at boosting flows in the lower parts of the Tuolumne, Stanislaus and Merced rivers.
An MID staff report said it is “in the parties’ best interest to extend the agreement rather than negotiate new terms at this time. Such negotiations would add complexity to and draw resources from the relicensing effort.”
John Holland: 209-578-2385, firstname.lastname@example.org
Merced Sun Star
Irrigation water on the way for Merced County farmers
By Brianna Calix
The Merced Irrigation District’s farmers will get more water than they did last year – but some growers worry the price they will pay for that water is too high.
MID’s board of directors voted unanimously Tuesday to allocate 275,000 acre-feet of water from Lake McClure into canals for farmers, essentially using every drop of available water for the upcoming growing season.
An acre-foot is the amount of water it would take to cover an acre of land 1 foot deep, or about 325,900 gallons.
The district will allocate 4 acre-feet per acre for most growers at $66 per acre-foot. Growers can place water orders beginning Monday.
“We’re trying to take every drop of water we can and move it into the system,” said Hicham Eltal, MID’s deputy general manager for water supply.
Eltal said March was a good month for the district in terms of precipitation and weather, but the reservoir still is lower than its historical average, at about 330,000 acre-feet.
Some growers in the audience at Tuesday’s special meeting raised concerns about the cost of water.
“We’ve got to cut corners like you,” said Frenchy Meissonnier, a Merced County rice farmer. “I’m happy to be able to farm, but I can’t go broke doing it.”
The final price was significantly lower than initial recommendations, which put a $100 per acre-foot price tag on irrigation water.
The board in 2014 raised the price from $23.25 per acre-foot to $100.67. The stiff price hike was implemented to help the district close a multimillion-dollar budget shortfall.
Some noted that neighboring irrigation districts, such as Turlock, were offering more competitive prices.
Board director Jeff Marchini said that in the past MID has offered lower rates, “but those days are gone.” Marchini also said water districts south of Merced are in worse shape.
MID officials said staff members took into consideration the mix of crops, debt expenses, groundwater pumping and the cost to relicense New Exchequer Dam when setting a price point for water.
At this time last year, MID said it wouldn’t have any water for farmers.
John Sweigard, MID’s general manager, said farmers should get used to what they’re seeing this season. “This is what a typical year might look like in the future.”
Others in the audience also were concerned that the irrigation allocations would bring Lake McClure down to its minimum storage requirements without any extra water if conditions are dry next winter. MID officials said an extra 100,000 acre-feet of water wouldn’t make much of a difference in a dry season. Sweigard also said the district worried farmers would pump more water if less surface water was made available.
MID will not offer its Supplemental Water Supply Pool Program, which provides growers with groundwater previously recharged by the district.
“It’s been a tough four or five years for all of us,” said Bryan Kelly, MID’s deputy general manager for water resources. “We’re going to be a bit more flexible than a normal year. We want this to be a good year.”
Brianna Calix: 209-385-2477, email@example.com