San Jose City Council approves $15 an hour minimum wage

SAN JOSE, Calif. (KTVU) - San Jose City Council voted on Tuesday to increase the minimum wage to $15 an hour by January 1, 2019. 

"Raising the minimum wage will provide a significant boost for the thousands of hard-working families in our community who are struggling to keep up with the extraordinarily high cost of living in Silicon Valley," said Mayor Sam Liccardo. "By moving forward together with many of our neighboring cities, even more residents will benefit from a higher wage and we will create a more level playing field for businesses throughout the region."

Demonstrators gathered outside City Hall on Tuesday to pressure city council members to approve the increase. 

Mayor Liccardo launched the effort last fall to follow the lead of five other cities in Santa Clara County and to come up with a regional approach to raise minimum wage throughout Silicon Valley. 

City statistics show it would mean a $300,000 raise for 115,000 workers. 

"The increases that are scheduled through 2019 are substantially faster than inflation and certainly faster than rent growth," said Mayor Liccardo. 

Some small business owners and non-profits worry raising the minimum wage would reduce their share of the economic pie. The result could either mean service reduction for non profits or price increases for mainstay businesses. 

"We're paying out more money on labor costs. It's an effect that everything goes up. I kind of feel like sometimes feel like the minimum wage increase just leads to prices going up," said Josh McGhie, 4th Street Pizza co-owner. 

The minimum wage will reach $15 an hour by January 1, 2019 in three steps; ($12 in 2017, $13.50 in 2018, and $15 in 2019), with automatic annual cost of living increases (based on the CPI, up to 5%) every year thereafter, according to the mayor's office.