MCO Wage Increases from the Mayor’s Office

Mayor London Breed released her proposed budget for the 2021-2022 and 2022-2023 fiscal year on June 1st, 2021. The Mayor appropriated $38.2 million to continue the 3% one-time cost-doing-business increase for city-funded nonprofit organizations that was previously appropriated by the Board of Supervisors for the 2020-2021 fiscal year. This also added 3% to the 2021-2022 fiscal year.

Instead of adding separate spending for the Minimum Compensation Ordinance (MCO) wage increase, as was done by the Board of Supervisors for the 2020-2021 fiscal year, the Mayor considers the cost-of-doing-business to cover the wage increases. For the 2020-2021 fiscal year, the MCO increase was for a 3.311% cost-of-living adjustment to the minimum rate to raise it from $16.50 to $17.05 per hour, and wage raises of $0.35 per hour for wage rates between $17.05 and $19.05 and $0.30 per hour for wage rates between $19.05 and $23.05. For the 2021-2022 fiscal year, the minimum rate increased 1.722% from $17.05 to $17.34 per hour. The cost-of-doing business increase is also intended to cover wage increases for the wage rates above the minimum rate. The wage rates for IHSS home care workers increased to $18.00 per hour.

According to provisions in the MCO, the City Controller determines whether the Mayor or the Board of Supervisors put in sufficient funding for city-funded nonprofit organizations to provide wage raises. If the City Controller does not certify that there is sufficient funding, the wage raise is deferred until additional money is added to the city budget for nonprofits. It is considered that for-profit businesses are able to absorb the costs of the increased wages from their profit margin. The MCO wage rates for for-profits increased to $18.55 per hour. For the workers covered by the Quality Standards Program at the Airport, the minimum wage rate increased to $19.05 per hour. These rates are in effect starting July 1st, 2021.

For the 2020-2021 fiscal year, some nonprofit workers did not see wage increases from the 3% cost-of-doing-business increases, because the Supervisors appropriated the funding as a one-time expenditure and nonprofits did not want to be stuck paying increased wages after the funding ended. According to Stanley Edwards, an employee of St. Vincent de Paul at Multi-Service Center South, the City’s largest homeless shelter, “Nonprofits have to provide wage raises or workers will walk out the door…because we have families to provide for.” Nonprofits should be able to implement wage increases with the current funding because the cost-of-doing business increase with roll-over into future years as the base-line.

By Sierra Moore