>> >> good afternoon. welcome to our rules committee for thursday july 17, 2014. i am supervisors norman yee and i will be chairing this meeting. i'm joined by supervisor katie tang and supervisor campos. the clerk today is lisa miller. the committee would also like to acknowledge the staff of sf gov. tv. san francisco television jessie larson. who record all our meetings and make the transcripts available online. madam clerk, do you have announcements? >> yes, please make sure to

silence all cell phones and electronic devices. please submit any copies and documents should be submitted to the clerk. items acted upon today will appear on the agenda. >> call you call items 1-9. >> items 1-9 involving various lawsuits. >> is there any members of the public who wish to speak on items 1-9? seeing none, public comment is closed. colleagues is there a motion to convene in closed session. with no objection. motion passes. members of the public, we will now be convened in closed session. we will ask you to please leave

>> deputy city attorney john gibner, the committee voted items 1-4, 6-9 for full recommendation. one vote with supervisors campos voting no to vote item 5 with a full board of recommendation. >> thank you. city attorney gibner. can i have a meetings -- motion to not disclose the session? >> so moved. >> can i have a second? no objection. motion is passed. madam clerk, please call item no. 10. city clerk: item 10:

[initiative ordinance - administrative code - minimum wage]14068710.sponsors: mayor; kim, chiu, farrell, breed, yee, wiener, campos, cohen, tang and marmotion ordering submitted to the voters an ordinance amending the administrative code to increase the minimum wage for employees in san francisco to $12.25 per hour on may 1, 2015, with annual increases, reaching $15.00 per hour in 2018, followed thereafter by annual cost-of-living increases; following 2015, provide only for annual cost-of-living increases in the minimum wage for two narrow categories of employees; and include the city government and in-home supportive services public authority as employers subject to the minimum wage ordinance at an election to be held on november 4, 2014. city clerk: item 10: [initiative ordinance - administrative code - minimum wage]14068710.sponsors: mayor; kim, chiu, farrell, breed, yee, wiener, campos, cohen, tang and marmotion ordering submitted to the voters an ordinance amending the administrative code to increase the minimum wage for employees in san francisco to $12.25 per hour on may 1, 2015, with annual increases, reaching $15.00 per hour in 2018, followed thereafter by annual cost-of-living increases; following 2015, provide only for annual cost-of-living increases in the minimum wage for two narrow categories of employees; and include the city government and in-home supportive services public authority as employers subject to the minimum wage ordinance at an election to be held on november 4, 2014. city clerk: item 10: [initiative ordinance - administrative code - minimum wage]14068710.sponsors: mayor; kim, chiu, farrell, breed, yee, wiener, campos, cohen, tang and marmotion ordering submitted to the voters an ordinance amending the administrative code to increase the minimum wage for employees in san francisco to $12.25 per hour on may 1, 2015, with annual increases, reaching $15.00 per hour in 2018, followed thereafter by annual cost-of-living increases; following 2015, provide only for annual cost-of-living increases in the minimum wage for two narrow categories of employees; and include the city government and in-home

supportive services public authority as employers subject to the minimum wage ordinance at an election to be held on november 4, 2014. >> short 1234 shortly we'll be joined by supervisor kim who is going to speak on this item. we'll give her a minute to get here from her office. >> everyone is so quiet. >> you are going to sing a song? >> yes. i'm going to sing a song. >> so, we are joined by supervisor kim to this committee meeting. and we already called item no. 10, which is the minimum wage

item. so, supervisor kim would you like to make your comment and go over this part of the meeting. >>supervisor jane kim: thank you for those that came out of this proposal for the ballot. san francisco is setting the bar for workers right in an economic growth agenda and we are doing it together. i'm proud to stand with the entire of the board of supervisors, mayor, labor, workers, coalition for fair economy and non-profit and chamber of commerce the most progressive and strongest minimum wage proposal in the country. and this proposal all san francisco employers will be paying $15 an hour by 2018. there is no tip credit or -- credit. these are pure wages that workers will be able to take home. despite setting

this precedent in 2003 led actually by a coalition of activist and laborers, in the last two 2 years in particular we are seeing a widening gap between our lowest and highest paid workers. in a time of economic prosperity, no one should be left behind. everyone that works to make a city and economy most successful should benefit from this prosperity. we have to keep in mind when we are talking about minimum wage, we are not just talking about the province of teenagers trying to make more money. in fact 88 percent of those that benefit from minimum wage are ages 20 and older. women are almost half of all minimum wage workers in this country. we are committed to creating more jobs in san francisco. we can't just be about creating any job. we should be

committed to create higher paying jojs jobs and lives wages and allow people to take care of their families and thrive. labor and workers have been clear to initiative and respect the lowest wage workers. labor and workers fought for universal health care in san francisco, put sick day ordinance on the ballot. no one considered these landmark legislation and now others are joining san francisco's rank and implementing the policy. san francisco has a lot to be proud of. we not only push the boundary to respect the work of our workers within our city boundaries, we impact the lives of workers throughout the country. having the strongest minimum wage proposal in the country isn't enough. it has to be effective. we can't work this hard to pay better wages and not pay attention to where the money is going. we want to

ensure it ends up in the pocket of our wage earners. therefore we are presenting this today and the mayor's office and all have worked on to make sure we are highlighting the city's enforcement priority for this minimum wage measure. i have submitted those amendments to the members of the rules committee as well. to be clear about what the ordinance is actually about, this is how we are amending the minimum wage ordinance . one, we are increasing the minimum wage wage to $12.25 on may day, 2015. and then thereafter, every year rising to $13 and and $14 and eventually to $15 with annual increases starting thereafter cord together consumer price index. we krooefd -- created two categories of government employees starting on may day with annual increases

starting july 1, 2016. based on consumer price index. we add the city and san francisco in home supportive services public authority to be included in the definition of employer of minimum wage ordinance. something that we were not able to do 10 years ago. a very important class of workers here in san francisco. we also exempt city employees from recovering monetary penalties. the initiative would of the administrative code of the in home had been authority shall be paid no less than minimum wage in the minimum compensation ordinance and no less than the minimum wage established in the ordinance. so, i do have a couple of amendments and i do want to -- is it appropriate to read them into the record now, chair yee or after public

comment? >> read it in right now. >> okay. there are three amendments. first on page 5, line 18, added section which reads kwoets "it is the policy of city of san francisco to employers be held accountable and the board of supervisors shall study and review the fees ability with state law to enhance the enforcement tool and the city's to combat wage theft and to promote collaboration between all agencies and departments as well as between the city and state and federal labor standards agencies in the enforcement of this chapter. the second maemd 2nd amendment on page 7, line 10. that all city agencies and departments shall cooperate

with revocation or suspension from the agency, the agency being the office of labor and standards enforcement. finally page 10, line 3, change the operative date, that it reads may 1, 2015 and not january 1, 2015. in order to preserve the cpr increase that will preserve the previous minimum wage passed in 2003 that will take place in january. that was just an oversight from us. we have two presentations from our city agencies. the first is the mayor's office. drew is here to present on behalf of the mayor and we have ted eagan, office of the controllers to present the city's economic report. >> thank you supervisor and good afternoon, supervisors, drew from the mayor's office. on behalf of the mayor i wanted to make a few remarks. at his state of the city

address. he wanted to promote the wage increase in san francisco. the mayor met with representative from businesses, non-profit organizations, labor unions and a number of top economist with a goal of setting a minimum wage which is fair to both workers and businesses. i would like to thank all those who participated in this process especially kim for her leadership and supportive of the amendment that supervisor kim has proposed and propose the committee recommend this to the full board. thank you. >>supervisor jane kim: thank you, ms. drew. mr. eagan? >> good afternoon, supervisors. ted eagan from the office of economic analysis. today our office issued and economic impact

report on this item and i would like to walk you through findings and conclusions. it will take me one moment to bring up the powerpoint. >> thank you. as supervisor kim indicated, the minimum wage increase begins on may 2015, at $12. 25 to july 1,

2019, and thereafter receives an annual increase. just to provide an a little bit of background. the minimum wage in san francisco since 1968. both the federal minimum wage and state minimum wage and then the city's minimum wage. the city did have a large minimum wage increase in 2003 and has had the highest minimum wage in the country since then. however even today's minimum wage would not be as high as the minimum wage wage would have been had it kept up with inflation since 1968. in addition since the state action the gap between the state and city's minimum wage will shrink. the states minimum wage has risen $1968. in addition since the state action the gap between the state and city's minimum wage will shrink. the states minimum wage has risen to $9 an hour to $15. that inflation is set on a regional bases,

metropolitan basis and cost in the city for many workers are rising more rapidly. this is a chart that shows median rent paid by san francisco renters and since 2005, the earliest year we have data on rents annual data. rents increase twice the minimum wage in the city. we believe in our office about a maximumch 60,000 workers may earn the minimum wage today in san francisco, about 11 percent of the workforce. they are heavily concentrated in five industries. food services, retail trade, manufacturing, percent -- personal services as well as ihs. that's workers who are counted in a different industry. in terms of our economic impact analysis, the effect of raising the minimum

wage will increase to the extent that it raises wages of workers. it will increase their earnings and their spending in san francisco and to expand the city's economy. however to the extent that their wages will go up will extend the labor cost of businesses. the net nick impact am -- economic impact is the relative importance. we did look in detail about the economic after effects of the 2004 minimum wage increase in the city. despite the fact that people predicted there would be widespread job loses in the wake of that, there was actually very little job loss in 2004. however, we also believe there was relatively little increase in actual wages in san francisco. we think that the state minimum wage which we rose from was so far below which people were

actually making in san francisco that the net effect on wages increases was fairly small. for example, the highway industries in san francisco saw their wages go up not withstanding the minimum wage. so while we think it's worth pointing out there's a very small employment effect in 2004, we don't think that's going to be the case in the future. this is how we are projecting the increase in the minimum wage as an annual increase will translate into higher wages for workers. so 2015 on a calendar year average the proposed minimum wage would lead to a 10 percent increase in the minimum wage. that will range anywhere from about a 3 percent to 8.7 percent increase for wages for workers in different industries. if you combine it over five 5-year period, the 28 percent increase in minimum wage will translate anywhere between 13

percent and 26 percent increase in average wages for workers in these industries for san francisco. this is not only the minimum wage wage workers in the industry, this is the average wage will go up by these industries. what does that mean in terms of how much people will make? we project that the average worker will have an additional $125 a week and about $85 a week and you can see the other industries there. these industries are reflecting both the minimum wage increase and inflation that we naturally expect to happen over the time period. in terms of the employment impact, we do expect that there will be an employment impact associated with raising the minimum wage based on economic motion deling. we believe the city would have more jobs by 2019 compared to the jobs without it. that's about 2 percent of employment in the city. about half of

these jobs in food services and retail trade. the employment impact is whether this city's economy will be growing during this period and whether growth is enough to continue the job expansion into city's economy. to do that we need to look at different projections at the city's employment during that time period. we rely on three sources of employment projections. they are all projecting significant amounts of growth from 27,000 to 59,000 new jobs. what that means even the least optimistic employment projection we have will see the city continue to see 25,000 new jobs even if the effect of the new minimum wage comes into effect. we looked into industry by industry and it's a little less clear. the projections we looked at arrest unanimous -- are

unanimous like the restaurant industry which will continue to grow even with the minimum wage impact. the personal services are a little less clear, some are projecting healthy growth and some are not. the overall story about the employment effect the city's economy will improve. the number of the jobs in the city will still be less than the city will expect to have with natural growth over the last 5 years. the only point of caution we would mention is that none of the projections we have looked at are anticipating a recession in the next 5 years. we may have a recession where the city will naturally lose jobs while the city is raising the

minimum wage. the city may consider to add flexibility to this proposal to the economic event. >> that concludes my presentation. i'm happy to take any questions at this time. >>supervisor jane kim: i just wanted to clarify that i heard correctly. in terms of the employment impact, you are saying the most conservative is that the city would grow 12,000 new jobs per year. on the other hand, about 15,000 of the private sector jobs by 2019, again there may be a reduction by that amount. so essentially, are you saying that the loss in the jobs are not necessarily cutting existing jobs, but it could also come from the projected growth that we anticipate even at the most conservative levels. >> the most conservative

projections we have is 27,000 new jobs and we predict 15,000 so that leaves 12,000 new jobs even with this new creation. >> okay. thank you. >> if there are no further questions, thank you very much. >> thank you. >> so, i just wanted to recognize that supervisor david campos wants to make opening statements as well. >>supervisor david campos: thank you supervisor kim and i want to thank this very broad coalition coming together to support the nation's strongest minimum wage law. and i'm very proud to be a part of that coalition. and i want to thank the mayor's office, supervisor kim and her office and all of my colleagues who have come on board to support this item. i

also and more importantly want to thank the workers and the community members who have come together to share their stories to underscore why this is so important. i don't know what the campaign for this effort will look like. and i don't know to the extent there will be opposition. i see the letter from the california restaurant association that is, i guess, predicting the end of the world if this goes forward. and i really hope that they reconsider their stance. but i guess if there is a place where we will be thrilled to have a discussion about minimum wage and the need to increase it, that will be san francisco. so i look

forward to add discussion. i want to provide some context because as much as the restaurant industry is trying to anticipate a parade of horribles. we have a very successful restaurant industry particularly here in san francisco. there was a report by open table which is the leading provider of online restaurant reservations, they released information last year that actually shows that san francisco leads the way in the country even higher than new york in terms of restaurant visits. and you know, and this is not withstanding the fact that not too long ago when san francisco was talking about increasing minimum wage and increasing protections like the universal health care, at that point, this very industry was sayings that the industry would collapse with those

things going forward in fact the industry has not collapsed and it's doing better than any place in the country. i wanted to provide context as to why this is important and i have been saying this in the last few months that we are the wealthiest city in the country and yet we have the fastest growing inequality in the country. let's provide some context. there was a report issued by the san francisco chronicle. you know it's true if the chronicle reports it. it basically talks about one way of measuring income and equality is to go by, i want to make sure i'm pronouncing it correctly. the guinea coefficient, used by world bank to actually measure national economies throughout the world. and the way that this coefficient works is

that it looks at a region and the region scores a zero if one 1 person holds all the wealth. so if there is complete income inequality and it scores a 1 if there is an even distribution of wealth. so using 2012 figures, which is what the coefficient shows about where we are. so, you have on one end of the spectrum, sweden which scores at 0.25. which has a lot of equality. denmark is better than sweden and it's scoring at 0.24. the united states scores at 0.45. so we are not quite sweden. if you look at

san francisco it's at 0.508. which means that san francisco is doing worse than rwanda. the 1 piece of news certainly for me is having been born in guatemala that we are doing better than guatemala which is at 0.559. the fact that we are doing worse than rwanda tells you there is something happening here and that we as a city have an obligation to make sure that we lift every boat and those who are trying to make enough of a wage to live in san francisco who work very hard, that at least we give them a fighting chance. that's what this is really about. it's about making sure that we address the fact that the inequality puts us in the

company of developing countries. and i just think that san francisco, the wealthiest city in san francisco, has to improve that. thank you. [ applause ] >>supervisor jane kim: chair, seeing no further comments, can we open for public comment? thank you. i do want to recognize that while there are many many folks that were involved in make k minimum wage come before the voters today that of course we want to recognize our fast food workers who helped strike across the country and protest bringing $15 an hour to the forefront. when the mayor announced it, it really began the conversation setting that as a minimum. those that were involved in the discussions and negotiations and i do

want to recognize mike casey, the head of local to hotel workers, shas an lieu with coalition for fair economy and from the mayor's office and steve fields, gail gill man, john sackey and annie chung who represented nonprofit workers. i want to call up jose from workers united and workers alliance to present and i will read a number of comment cards. steve fields, annie chung, samantha higgins, don menendez, amy aguilera, antonio diaz, schiavo and connie ford. >> all right. good afternoon supervisors. first of all

thank you for your work on this as well as many of the community today and laborers on the minimum wage. part of the workers alliance and campaign for fair economy who represents restaurant workers, retail workers and domestic workers and laborers in san francisco. we've all seen that san francisco has had a huge economic increase in the tech industry and real estate development, but that by no means is a measure of economic success. what is a measure of economic success is handout how -- san francisco is going to address the needs of our workers in san francisco. right now we are leading the way in economic inequality. but that's not the legacy we want to lead. the legacy we want is is for san francisco to have the highest minimum wage in the country to give our working families and