It's been a little more than a year since San Jose, Calif., increased the city's minimum wage by $2 per hour, with adjustments for inflation. Now at $10.15 an hour, it's one of the state's highest.
Back in 2012, as voters were debating the wage hike, some in the restaurant and hospitality industry warned that an increase would be bad for the sector. It would deter new businesses from opening, they said, and would cause existing businesses to slash hours for employees.
So how are San Jose's businesses faring today? The answer is, it depends.
The vast majority of the 17,000 minimum wage jobs in the city are in the food service and hospitality sectors. After the wage increase, the Pizza My Heart restaurant raised its prices by about 5 percent.
Just a block from San Jose State University, Pizza My Heart gets heavy foot traffic that adds to a line out the door on most days. The restaurant does a brisk business; about 50 pizzas come out of its brick oven every hour.
Like many business owners in downtown, Chuck Hammers fought the ballot initiative and braced for the worst when the law took effect last March.
"There's that little bit of a panic from a business owner, you know, 'Is the sky going to fall?' " Hammers says. "And you're nervous. It's a 20 percent increase in what's really one of your biggest costs" — labor.
"After looking at it, I kind of stepped back and realized, well, it's gonna happen to everyone," Hammers says. "It's going to be a fair playing field. We just need to increase prices a little bit."
So he did. Slices went up by 25 cents, pies by $1. Sales held steady and Hammers says customers didn't seem to notice.
Hammers owns 24 Pizza My Heart shops, a franchise. Only four shops are in San Jose, but he decided to raise everyone's wages at all his stores. Otherwise, he says, he was worried he'd lose workers at his franchises outside the city, where the minimum wage is lower.
"The employees like it, they're sticking around longer," Hammers says. "We're getting very little turnover now in employees, which is really good."
In fact, Hammers is opening more Pizza My Hearts. He still bristles at the suggestion that he's a booster of raising the minimum wage. But at the same time, Hammers says he understands that it's almost impossible to live on $8 an hour in a city where the average two-bedroom apartment goes for more than $2,000 a month.
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