Alameda County weighs nation's first $30 minimum wage

ALAMEDA COUNTY, Calif. (KGO) -- Alameda County supervisors voted Tuesday night to study the impacts on a proposal that could make the county the first place in the nation to adopt a $30 minimum wage, setting up a high-stakes debate over affordability for workers and costs for businesses.

The proposal would apply only to unincorporated areas of Alameda County and would be phased in over several years.

Under the plan, larger employers would be required to reach the $30 hourly wage sooner, while smaller businesses would have more than a decade to comply.

The proposal drew competing rallies Tuesday, with supporters arguing that wages have failed to keep pace with the Bay Area's soaring cost of living and opponents warning that higher labor costs could hurt small businesses.

Workers supporting the measure said a higher minimum wage would make it easier to afford basic necessities.

MORE: With 2027 minimum wage increase, Newsom says CA puts 'working families first'

"I would be able to afford rent. I wouldn't have to live with my parents. I could afford a car again," one worker said at a rally backing the proposal.

Opponents, meanwhile, warned the proposal could increase costs for employers at a time when many businesses are already struggling.

"A sudden jump to $30 an hour minimum wage could force them to close their businesses, cut jobs, raise hours, raise prices or close altogether," said Rudy Recile, a Republican candidate for California's 8th Congressional District, who spoke at a news conference opposing the proposal.

One of the central questions in the debate is whether higher wages would ultimately lead to higher prices for consumers.

To explore that question, ABC7 Eyewitness News compared the cost of a Big Mac in cities with varying minimum wages.

MORE: New minimum wage increase starts for CA health care workers this week after months of delay

In New York, where the minimum wage is $17 an hour, the burger costs more than $7.

In the Bay Area, the average price is about $6.87.

Meanwhile, in areas operating under the federal minimum wage of $7.25 an hour, prices ranged from less than $5 in Houston to more than $6 in parts of Pennsylvania.

Michael Reich, an economics professor at UC Berkeley who has studied minimum wage increases, said higher labor costs do not always translate into significant price increases.

"Labor is about 30% of costs in fast food. So that means the employer could pass through the entire cost to consumers with a 3% price increase," Reich said.

MORE: California Panera franchisee to raise minimum wage to $20 after allegations of favoritism by Newsom

On a $7 burger, that would amount to roughly 20 cents.

Still, Reich acknowledged economists continue to debate how far minimum wages can rise before affecting employment.

"I've studied these minimum wages in California going up to $15 an hour, going up to $20 in fast food, and I don't see the negative employment effects yet. That doesn't mean they wouldn't," Reich said.

Supervisors have several options before them. They can adopt the proposal, direct county agencies to conduct a 30-day review of its potential impacts, or place the measure before voters on the November ballot.

Whatever path they choose, the debate unfolding in Alameda County is likely to be watched closely by labor advocates, business groups and policymakers far beyond the Bay Area.