San Diego is an incredible place to live, work, and visit. We have a world-class tourism economy, a vibrant downtown, and neighborhoods that are as diverse as they are dynamic. But for far too long, our city has also grappled with a significant challenge: a cost of living that makes it difficult for many families to thrive. Housing, utilities, and transportation all come at a premium, and every San Diegan feels the strain.
It is in this context that the proposal to raise the minimum wage for hospitality workers, event venue staff, and restaurant employees to a staggering $25 per hour has been presented as a solution. While the intentions behind this proposal may be noble, it is a shortsighted policy that will do nothing to solve our affordability crisis. In fact, it will only make it worse — not just for businesses, but for every single person who calls San Diego home.
The advocates of this measure frame it as a targeted fix, a way to ensure that a specific group of workers can afford to live here. But what they fail to acknowledge is the fundamental economic reality that will follow: these costs won’t stay contained within the hospitality sector. They will be passed directly on to consumers placing a new and unsustainable burden on all of us.
We know that San Diego’s overall cost of living is already 45% higher than the national average, with housing costs more than double. This measure would accelerate inflation in an area of our economy that touches almost everyone’s life.
Consider your average San Diego family. A night out at a local restaurant, a trip to Petco Park to watch the Padres, or a family visit to SeaWorld — these are not luxuries for the wealthy; they are part of our community fabric. Under this proposal, the cost of a hot dog, a beer, or a ticket would increase.
It’s simple math for businesses that operate on notoriously thin margins. This is not a theoretical problem. When the price of labor for a specific service rises dramatically, the price of that service must also rise. For a small, family-owned restaurant or rental shop, a sudden and significant increase in labor costs is not something that can be absorbed.
We know this because we’ve seen this story before.
In June 2016, San Diego voters approved a ballot measure to increase the city’s minimum wage above the state amount. The new wage went into effect in July 2016, and included adjustments for inflation. We were told that this would solve San Diego’s affordability problem. Since then, inflation in San Diego increased by over 50%, which is significantly higher than the national average and other similar-sized metropolitan areas.
Perhaps the most telling aspect of this policy is its glaring inconsistency. While the city council is proposing to mandate a $25 wage on private businesses, the city of San Diego has exempted its own employees from this requirement. If the goal is truly to address the high cost of living for our residents, why would city workers who contribute to our community every day be left out? This double standard shows that the proposal is not a comprehensive solution for our city’s affordability crisis, but a selective mandate that creates an unfair playing field.
This proposal offers a stark warning to policymakers: solutions to our city’s affordability challenges cannot fall solely on the backs of San Diego’s small businesses and everyday San Diegans. These local enterprises, from the corner cafe to the family-owned boutique, are the lifeblood of our economy and the heart of our neighborhoods. To truly address our cost of living crisis, we must look for comprehensive solutions that benefit all San Diegans. A thriving economy, one that provides opportunities for everyone, is the only sustainable path forward.
But this minimum wage proposal is a step in the wrong direction, putting a price tag on our community and making it harder for all of us to afford to live in the city we love. True progress on affordability requires innovative, city-wide strategies, not policies that risk dismantling the entrepreneurial spirit that makes San Diego so special.
Chris Cate is president and CEO of the San Diego Regional Chamber of Commerce.
Want more insights? Join Working Title - our career elevating newsletter and get the future of work delivered weekly.
