Why this matters
Officials in San Diego, similar to other communities throughout California, are grappling with an ongoing affordability and housing crisis.
In an attempt to chip away at San Diego’s ongoing affordability crisis, city leaders are weighing a $25 minimum wage for hospitality workers — from hotels to Petco Park to SeaWorld.
Dozens of people filled the City Council chambers in downtown San Diego on Wednesday to speak both in support of and against the proposed wage hike, illustrating both ends of the spectrum with workers and unions all the way to business leaders and industry representatives.
On one side, workers and their advocates said the proposal would provide stability to a struggling workforce. On the other, business owners described the proposal as a reckless job killer that would lead to unintended consequences.
In the end, Councilmember Sean Elo-Rivera responded with a question: “Who does the city of San Diego work for?
“Does it work for billion-dollar corporations who extract wealth from our city, fight to keep wages low and pocket the profits, or does it work for the people who wake up early, bust their ass and make this city run every single day?” he said, chairing Wednesday’s committee meeting.
“San Diego should be the best city in the country, and not just for tourists or shareholders and the ultra-wealthy, but for the workers who built this city and deserve to stay in it.”
The committee voted unanimously to advance the proposal — a $25 minimum wage for workers at amusement parks, event centers, hotels and zoos — to the full City Council. It requires two public meetings and the mayor’s signature for approval, and barring any changes, it would take effect Jan. 1 of next year.
Councilmembers Henry Foster III and Marni von Wilpert both recognized the importance of working through the policy proposal to mitigate unintended consequences, but they also said it just makes sense.
“As much as I like to say that small business is the heartbeat of our economy, if we do not have the workforce, that heartbeat stops,” Foster said.
The hospitality industry is one of San Diego’s largest economic engines — generating more than $14 billion in visitor spending last year alone — while paying some of the lowest wages, according to industry research and city staff.
On Wednesday, Elo-Rivera championed a proposal to help bridge the gap, known as the Hospitality Minimum Wage Ordinance.
The proposal seeks to:
- Establish $25 minimum wage for workers at amusement parks, event centers, and zoos, as defined, as well as hotels with at least 150 guest rooms.
- Match federal and state minimum wages for relevant positions if they exceed the city’s.
The proposal comes in the midst of an ongoing cost-of-living crisis in San Diego. Half of the city’s housing supply consists of rental units that are nearly full. The lack of supply has driven up rents countywide by 25% over a four-year period, according to city staff.
And low wages have a direct impact on people’s ability to find and pay for housing. The number of people falling into homelessness continues to outpace the number of people who move off the streets and into housing.
However, the city’s independent budget analyst highlighted potential impacts of the proposal in a 28-page report. There’s no clear consensus on the proposal, the IBA said, only contrasting viewpoints.
Considering labor costs make up a large portion of total expenses, the proposal could have a seismic impact on employers. That could mean layoffs, reduced services, increased prices and decreased profit margins. The current economic climate — uncertainties about tariffs and declining tax revenues — only emphasizes these impacts.
At the same time, the level of the impact depends largely on how employers respond to the increase in costs. And their response — influenced by the size of the wage increase and speed of implementation — will ultimately determine the proposal’s economic impact.
The IBA also highlighted possible strategies to move forward. Staff could mitigate potential negative impacts by phasing in the wage increase, considering exemptions for small hotels and tipped employees, establishing enforcement mechanisms, and allowing for hardship exemptions.
San Diego’s current $17.25 minimum wage already exceeds both federal and state minimums. If approved, workers currently earning the minimum wage in San Diego would receive a 45% increase in pay.
Elo-Rivera’s office pointed out the current minimum is roughly half of what is needed to live here. Using a living wage calculator, city staff determined a single-person household would need to earn $30.71 per hour of full-time work to support themselves in San Diego County. A family of three with one working adult would need to earn $49.13 an hour.
Dozens of workers and union representatives thanked city leaders for taking up the issue and urged them to set an example across the state.
A woman named Fatima said she is a health care worker who has already received a $25 minimum wage and showed up in support of others.
“Since getting a living wage, I have seen my coworkers afford groceries without stress. It made a big difference. This is what stability looks like — and it should be standard, not privilege,” she said, adding that low wages can lead to poor health.
“Every job deserves respect. It does not matter what industry. If you’re working full time, you should be able to afford living here.”
Dozens of business owners — large and small — spoke to the committee warning of the impacts the proposal could bring.
Diana Puetz, vice president of public affairs for the San Diego Padres, pointed out that the majority of people who attend games live in the county.
“We are opposed to this proposal because it raises serious concerns about affordability, fairness and the long-term impact on the people who live and work in San Diego,” Puetz said. “That means higher prices for families who want to attend a game, buy a hot dog, soda or beer. This increase will directly impact the residents this council was elected to serve.”
Mike Dunn, a representative from SeaWorld, said raising labor costs could negatively impact their ability to provide educational programming or even rescue stranded animals from local waterways and infrastructure.
“We respectfully ask that you please deny this ordinance. It will negatively impact the fragile economy of the tourism industry that our fine city relies upon,” Dunn said.
But Elo-Rivera strongly pushed back. He pointed out that the Padres play in a publicly subsidized ballpark, rely on millions of dollars in city services every season and enjoy a federal antitrust exemption that gives major league franchises “enormous power and privilege.”
“But instead of supporting the workers who clean their ballpark, make concerts possible and maintain their stadium, (Padres officials are) lobbying to keep wages low,” Elo-Rivera said. “Being San Diego’s team means standing with San Diegans — not against them.”
And then he turned to SeaWorld, highlighting that the company “got a sweetheart lease deal on prime public waterfront land” and used it to build a multi-billion dollar corporation.
“And our thank you? For two full years, SeaWorld failed to pay what it owed, even as our city was struggling to fund basic neighborhood services. And now you want to keep San Diego workers living in poverty? How dare you.”
