San Diego lawmakers voted this week to raise the city’s minimum wage to $11.50 per hour by 2017, but business groups vowed to continue their battle to block the measure.

Late Monday, the city council adopted a measure that would increase the local minimum wage from $9 per hour to $9.75 on Jan. 1, 2015, then to $10.50 per hour on Jan. 1, 2016, and $11.50 per hour on Jan. 1, 2017.

Starting in 2019, the wage would also be indexed to inflation. The measure also requires employers to offer five days of paid sick leave per year.

The council approved the measure with a 6-3 vote along party lines, with three Republicans in opposition. A second read is required, which is expected on July 28, before it goes to the mayor’s office.

Mayor Kevin Faulconer has reportedly expressed opposition to the wage hike. However, a vote by at least six council members could potentially override any veto, “and it appears they have that,” said Chris Duggan, director of government affairs for the California Restaurant Association.

The council could also potentially put the proposed ordinance on the November ballot, a move that the city’s lawmakers have proposed in the past.

Alternatively, the small business community could also seek to block the ordinance with a ballot referendum, Duggan said.

“The small business community is weighing its options,” he said.

Todd Gloria, the San Diego city council president who proposed the bill, said the increase will impact about 60 percent of people working in food services, more than any other industry. He estimated that the raises will add $1,400 per year each to the paychecks of low-income workers.

Duggan, however, said restaurants in San Diego will be forced to make tough decisions, including cutting hours, eliminating positions, re-staffing and reworking menus.

“The bottom line is this ordinance is flawed,” he said. “We will continue to oppose it.”

If approved, San Diego’s minimum wage will move higher than that of the state. California’s minimum wage increased to $9 per hour on July 1 as part of a tiered increase that will bring the wage to $10 per hour by 2016.

In a statement Tuesday, Jerry Sanders, chief executive of the city’s Regional Chamber of Commerce, said the group is “seriously discussing with the business community the options available to further oppose the council’s rushed decision that did not give the public adequate time to respond.”

The chamber has lobbied against the local minimum wage increase, saying businesses are already raising prices and cutting jobs in response to the state’s July 1 increase.

“Raising San Diego’s minimum wage and sick leave above and beyond what the state has already mandated puts San Diego at a competitive disadvantage compared to nearby cities,” said Sanders. “The Chamber takes the position that regulations concerning wages should be initiated federally to ensure a level playing field and at a minimum, they should be set at the state level to avoid city-by-city inconsistencies that would put San Diego’s job creators at a competitive disadvantage.”

San Diego is among a number of cities that are moving ahead with minimum wage increases that go beyond state and federal efforts.

San Francisco will vote on a ballot measure in November that would raise the minimum wage there to $15 per hour.

Seattle’s city council voted unanimously to approve a hike to $15 per hour in stages over the next seven years. Lawmakers in Chicago are considering a similar move.

Meanwhile, in April, the Senate blocked a bill that would have raised the national minimum wage from $7.25 to $10.10 per hour.

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout