A Step In The Right Direction: Raising California’s Minimum Wage

Here in the Bay Area where housing costs are prohibitive, even for many highly educated professionals, the minimum wage increase may seem to barely touch on the problem of affordable housing. It can still make a difference, however.

Consider that in the last four years, the state cost of buying a home has jumped 47%. On average, buyers in the Bay Area pay about $920/square foot. These million dollar homes have high ticket rents that trickle down to the renter– the median rent for a one bedroom in San Francisco is just over $3,100/month. This is in the same state where the average minimum wage worker will, after taxes, take home $343 per week (or $1,372 per month). Every pay bump will help close the growing gap between the reality of low wage earners and the increasing value of housing in California.

The minimum wage increase will be more significant for people living in smaller towns, including those who commute to the Bay Area and Silicon Valley for work. It will prove to be a significant step towards closing the economic gap, and securing a lower stress lifestyle for the average wage worker.

As an attorney and investor in startup companies, I understand and am sensitive to the concerns of small business. Not every entrepreneurial endeavor has funding adequate for launching its business to a comfortable profit. The minimum wage increase will, for some,  increase “the cost of doing business.” The economy will shift around the edges. Decades of research have shown that overall, there is no discernible evidence that raising the minimum wage correlates to a rise in business failures. So while models that are not strong enough to support higher payrolls may be affected, the overall cost change will not signal the end of small businesses.

We must accept the costs that help maintain an acceptable standard of living for everyone in our country. Our tax codes have become less and less progressive, with the wealthy pulling away from the middle and lower classes at a fast rate. In the long run, we all benefit if we stop economic polarization- the old cliche that the rich get richer and the poor get poorer. A stronger middle class means higher spending power, a growing economy, and the creation of jobs. More importantly though, we benefit when we have a middle class that has less stress and more dignity. It’s a value decision that will keep us moving forward as a democracy.


RoseAnn Rotandaro is the Founder and Executive Director of the nonprofit organization The Village Link, that is presently launching operations in Sierra Leone, West Africa. The Village Link aims to link under-represented communities world-wide to opportunities and solutions for economic development, education and entrepreneurship.  Rotandaro has also co-founded Cherokee Group LLC, a consulting firm providing specialized business services to entrepreneurs and corporations. The group invests in start-ups, technology and real estate and consult with individuals and entities venturing in these arenas. 

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