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Minimum Wage: A Fair Day’s Pay and a Modest Proposal

This June, voters in San Diego will have a chance to raise the minimum wage in the city to keep up with inflation and the cost of living. The issue divides city council candidates, and the arguments for and against the increase harken back to the original arguments surrounding the first minimum wage.

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In May 1937, President Roosevelt proposed a federal minimum wage that would establish “a fair day’s pay for a fair day’s work.” At the time, wages were as low as 10 cents an hour and one-third of the population was living in poverty.

Nearly 80 years later, families are once again struggling, especially in San Diego, which has become the most unaffordable city in the country because income has not kept up with the cost of living. The minimum wage is now $10 an hour in San Diego, but one-third of the population is having trouble making ends meet.

Proposition I, which is on the June 7 ballot, would raise the local minimum wage the day after the election to $10.50, then to $11.50 on January 1. Although the state increase in the minimum wage will surpass the local increase in 2019, Proposition I would provide immediate relief to an estimated 170,000 minimum-wage workers, allowing them to earn more money to help make ends meet now. It would also provide workers with 5 earned sick days.

When President Roosevelt proposed a minimum wage, the business establishment objected, asserting that the market should set wages. One of the staunchest opponents to raising the wage this June is San Diego city council candidate Scott Sherman, who echoes this objection. Sherman states, “I don’t believe in the power of the government to make your life better,” leading some voters to ask why he is running for public office.

Putting his faith in the market rather than government, Sherman contends, “It’s not for us to decide what your worth is. It’s for you to prove what your worth is.” That may be a hard argument to swallow for workers in San Diego who are proving their worth every day, eight hours a day, five days a week and are still only earning minimum wage, which amounts to little more than $20,000 a year or $400 a week.

Justin DeCesare, the city council candidate challenging Sherman, does not agree. “I fully support raising the minimum wage,” he says. “It’s time we realize that a strong, well-paid workforce is the best way to keep our growing population thriving.”

The question for San Diego voters in June is whether the government or the market should set a new floor for wages. If it was up to DeCesare, it would be the government, and if it was up to Sherman, it would be the market.

If history serves as a guide, it’s worth noting that concerns about the market led Congress to take up President Roosevelt’s proposal and, in 1938, pass the first federal minimum wage, which was 25 cents an hour (15 cents more than what some workers were earning). Proponents of the minimum wage believed that, in the absence of a government edict, competition among businesses would suppress wages and lead to the exploitation of workers, leaving them “ill-nourished, ill-clad, and ill-housed.”

Just like now, opponents in 1938 claimed that an increase in the minimum wage would disrupt the market and eliminate jobs. They asserted that the economic prosperity of the country depended upon businesses, which would be hard-pressed to provide jobs if they were burdened with government mandates. But history proved them wrong. The newly enacted minimum wage lifted millions of people out of poverty, and the middle class grew with workers earning more and spending more to grow the economy.

More recently, cities across the country have been raising the minimum wage and growing their economies with little to no effect on employment. Cities like Los Angeles, Oakland, and San Francisco have already raised the wage, and now proponents like city council candidate DeCesare want to do the same in San Diego.

“The gains that will be seen by individual families affected by the increase will go right back into our local economy,” says DeCesare.

On June 7, voters will have the final say and decide whether to give San Diegans a raise. Click here to read the full text of Proposition I