HR Strange But True

A Tale of Two Cities—One Mall and Two Minimum Wages

It’s a tale of two cities and the mall that the cities’ boundaries divide. Once upon a time, states had a uniform minimum wage, and then cities began establishing their own. And thus this story of wage woes began.

As the NPR blog explains, the story starts at the upscale Westfield Valley Fair Mall, on the border of San Jose and Santa Clara in California, where shoppers—and workers—walk a few feet to land in a different jurisdiction.

And according to CBS San Francisco, The Gap store was actually in both cities!

In 2012, San Jose voters agreed to raise the city’s minimum wage from $8 to $10 an hour. It’s not surprising that when San Jose made the change, employees quit in droves to work on the San Jose side, and businesses on the Santa Clara side had difficulty recruiting new workers and keeping the good ones.

And while the instant $2 raise was great for workers, it was difficult for employers on the San Jose side. While the chain stores could adjust to the increase, the smaller franchisers in the food court and at kiosks struggled to make the higher payroll. And they couldn’t raise prices very much if their competitors on the Santa Clara side hadn’t.

And, The Gap had the potential problem of tracking how much time its minimum wage workers spent in each part of the store! The CBS station reports the store solved this conundrum by just going to the higher minimum wage.

Wetzel’s Pretzels had another twist on the situation, says News10. It had two stores, one on each side of the mall’s city line. Their solution to the minimum wage dilemma? Rotate employees so they worked equal hours in each store!

Interestingly, the wage disparity in the two cities was lessened in July because Santa Clara’s minimum wage is now $9.00, and San Jose’s is $10.15.

1 thought on “A Tale of Two Cities—One Mall and Two Minimum Wages”

Leave a Reply

Your email address will not be published. Required fields are marked *