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Minimum Wage Increase To $15/Hour Won't Solve Bay Area's Affordable Housing Crisis

SAN JOSE (KPIX) -- On New Year's Day the minimum wage increased to $15 per hour or more for nearly a dozen Bay Area cities, but experts say it still won't help lower-paid workers get out of the housing crisis.

"We can't continue to be a city where hundreds of people are working full-time and going to sleep in their cars," said San Jose Mayor Sam Liccardo.

Liccardo launched a region-wide effort several years ago with mayors in the Santa Clara county to increase the minimum wage faster than the rest of California.

In 2016, Liccardo and city council members passed a wage hike to get the minimum wage to $15 per hour by 2019.

But small business owners are feeling the pinch, including Wayne Zhang, who owns Taiwan restaurant in Willow Glen.

"It's kind of high, yeah, for small businesses like us," he said. "We try not to increase anything (on the menu) because we've been here almost 36 years."

Zhang said he prides himself at keeping his prices the same, even when the minimum wage increased from $10.30 per hour to $12 per hour in 2017, and then $13.50 last year.

But with the minimum wage now at $15 per hour starting Jan. 1st, he said this time he will be forced to raise menu prices by 10 to 15 percent in order to keep his doors open.

"It's still not enough to pay the rent," said Steven Levy of the Center for Continuing Study for the California Economy. "You really can't do it through minimum wage increases. "You've got to do it with subsidized housing."

Levy said the increase will help many people who are struggling, and it will also help business owners who find it difficult to hire people hesitant to take on a minimum wage job because they know it's not enough to survive in the Bay Area.

"We know that $15 an hour doesn't get anyone out of poverty, but it certainly will help an awful lot more families put more food on the table," Liccardo said.

Besides San Jose, several other cities are also increasing their minimum wage to $15 per hour or more starting Tuesday, including Mountain View, Sunnyvale, Richmond, El Cerrito, Los Altos, Cupertino, Santa Clara and Palo Alto.

Zhang said with the wage hike, he'll likely make a little less profit and work a little more, but he believes his workers deserve the extra pay.

"This is a very expensive area, it's very hard for people to live here," he said. "So $15 I think it's reasonable."

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