A federal appeals court in San Francisco on Wednesday upheld Berkeley's authority to require higher minimum wages for some workers, the first appellate ruling in the country on whether local governments have that power.
By a 2-1 ruling, the U.S. 9th Circuit Court of Appeals rejected a lawsuit against the city over its "living wage" ordinance.
Nationwide, 121 localities, including the country's two largest cities, Los Angeles and New York, have passed laws setting minimum wages that exceed the norm.
The wage issue has been pushed by a national movement spearheaded by ACORN, a liberal advocacy group, and strongly backed by labor unions.
In addition to Los Angeles, more than half a dozen other California cities have adopted such laws, including Pasadena, Port Hueneme, Oxnard, Santa Cruz, San Jose, San Francisco and Sacramento.
Berkeley's law, enacted in June 2000, is fairly typical of living wage ordinances adopted nationally. The law mandated minimum hourly wages and employee benefits for certain companies that received financial benefits from the city such as city contracts, leases on city property or certain tax exemptions.
The Berkeley law set a minimum wage of $9.75 plus health benefits for those companies. Firms covered by the law but that did not provide health benefits were required to pay $11.37 an hour. The figures have risen with inflation.
At the time the law was enacted, the federal minimum wage was $5.15 an hour and California's minimum was $5.75. The state minimum wage has since been raised to $6.75.
When the law was passed, the Berkeley City Council issued findings saying "far too many people working in Berkeley ... live below or near the poverty line.... The privilege of using public property to operate a business enterprise should not be granted to parties that will exacerbate the problems associated with inadequate compensation of workers."
The city also found that the absence of employer-sponsored health insurance ultimately led to higher healthcare costs for the city, state and federal governments.
In September 2000, Berkeley amended its law to cover companies in the Berkeley Marina that had six or more workers and annual gross receipts of $350,000 or more. That move represented a new twist on the living wage movement -- targeting businesses in certain parts of a city.
