This commentary, written by Kenric Ward, originally appeared in Watchdog on August 6, 2015.
Already mired in $17 billion of debt, the city of San Antonio wants to raise the minimum wage for city workers to $13 an hour.
“Rather than entertaining failed ideas that will push up the price of labor and increase the cost of government, city leaders ought to be looking for ways to lower operating expenses and cut spending,” said James Quintero, director of the Center for Local Governance at the Texas Public Policy Foundation, a free-market research center.
San Antonio’s current minimum wage for municipal employees is $11.47 an hour. The rate for the private sector in Texas is $7.25 an hour.
“The (municipal) rate is based on base pay at the federal Department of Health and Human Services – far removed from reality here,” said Vance Ginn, a staff economist at TPPF’s Center for Fiscal Policy.
City Manager Sheryl Sculley will formally propose the 13.3 percent pay increase Thursday.
“Will residents see a 13.3 percent increase in the value of their city service? Probably not,” Ginn mused.
The city’s finance department predicts the wage hike will boost payroll costs by $2.1 million in the first fiscal year, and $2.8 million in succeeding years.
One of the big drivers of City Hall’s debt is unfunded pension liability. The carrying cost of that debt will get heavier as municipal pay rises.
“San Antonio is not exempt from the laws of economics,” Ginn noted.
“If San Antonio leaders raise the minimum wage, then more resources will be taken from productive private-sector activities and diverted into non-productive public-sector uses, resulting in fewer jobs created and a less productive economy.”
But $13 isn’t enough for the city’s unions. Elsa Caballero, president of the Service Employees International Union, wants a $15 minimum wage.
Mayor Ivy Taylor did not respond to Watchdog’s request for comment by deadline.