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Berkeley may be poised to adopt the highest “living wage” standard in the country. 

The proposed $11.37 wage – one of several choices the City Council will discuss tonight – would apply to some 50 workers, mostly low-wage workers employed at companies doing a significant amount of business with the city or leasing city land. 

Affected employees include parking garage attendants, janitors, hotel and restaurant workers, and those who work for nonprofit agencies. 

The City Council will evaluate staff recommendations tonight and adopt a Living Wage Ordinance next month. 

City Manager Jim Keene will ask the council to look at two pay standards. A consultant has recommended a third option. 

The standard of $11.37 per hour, or $23,649 per year for a full-time worker, is one of the choices discussed by the manager in his report. 

This includes a $1.62 per hour health differential. So if an employer pays $1.62 per hour for health benefits, the worker would receive $9.75 per hour. This level allows a family of three to slightly exceed the poverty level in the immediate East Bay Area, the manager’s report says. “It would place Berkeley far in front of almost all other communities across the nation in adopted living wage levels,” he notes. 

A lower standard, patterned after that adopted in Oakland, is $10.12 per hour, or $21,049 annually, without benefits or $8.50 per hour when the employer pays $1.62 per hour in health benefits. Oakland has raised its base “living wage” pay to $8.65 and requires $1.25 per hour toward health benefits. 

The $8.50 per hour option “is essentially keeping within the range of surrounding communities while still demonstrating a commitment to the living wage philosophy,” the manager’s report says. 

Berkeley Chamber of Commerce Executive Director Rachel Rupert said her group is concerned about passage of the ordinance. The Chamber would prefer than none is passed, however, it is recommending the lower wage scale. 

Increased salaries mean increased costs to the employer, she said. These costs will be passed along to customers, making Berkeley businesses less competitive, Rupert said. 

The manager’s recommendations excludes consideration of the $11 per hour plus $1.62 in health benefits, recommended by a city consultant. This standard, supported by the Labor and Housing Advisory commissions and the Coalition for a Living Wage, equals $12.62, or $26,249 annually. 

“Given the high cost of living in Berkeley, we think (the council) should look seriously at $11 an hour,” said Amaha Kassa, spokesperson for the Coalition for a Living Wage, which includes the Gray Panthers, Berkeley Citizen’s Action, labor unions and other organizations. “The City Council should be allowed to consider higher wage levels.” 

This rate, equal to the poverty level for a family of four adjusted for the cost of East Bay living, is not sustainable for a city such as Berkeley, the manager’s report says. 

The manager’s proposal targets relatively few people: 

• Individuals working at least 25 percent of their time on a city contract, working for a for-profit business which provides services valued at more than $25,000 annually and having more than five employees. 

• Individuals working for a nonprofit agency, where their positions are funded at 100 percent by the city. Like the for-profit businesses affected, the nonprofits must do more than $25,000 in business with the city annually and have more than five employees. 

• Employees who work 25 percent or more of their time on the premises of employers who lease their property from the city. They will be affected only if the employer has more than five employees and $250,000 in annual gross receipts. 

• Employees who work more than 25 percent of their time on the premises of employers who receive loans or other economic assistance of at least $100,000 annually from the city. 

The manager says that some 43 employees in the for-profit sector would be affected and about nine to 12 employees affected in the nonprofit sector. 

Receipts from leaseholders at the Sather Gate Mall are less than $250,000 annually, so they will not be affected, and negotiations for leases at the Marina come up in 10 to 15 years, so these workers will not be immediately covered by the ordinance, the manager says. 

Staff estimates that the costs of doing business with contractors will increase, costing the city $265,778 if the $8.50 living wage proposal is adopted or $415,489 if the $9.75 per hour standard is adopted. 

Monitoring the ordinance would cost about $85,000, the manager says. 

Rupert argues that the city should not be increasing the cost of city government. The Living Wage Ordinance will have “a budget impact on the city,” she said. 

Kassa argues, however, that the cost to monitor the ordinance will cost half of the city’s estimate. 

Moreover, he believes that the report has overestimated the costs that businesses will pass on to the city. 

“The cost is probably overblown,” he said.