By Adrian Childress,Staff and Wire Reports

Copyright timesofsandiego

The San Diego City Council agreed Tuesday to raise the minimum wage for some hospitality workers to $25 an hour, in phases that begin next year.

A proposal that initially was intended to institute higher wages for all workers in San Diego’s tourism industry reappeared Tuesday with many carve-outs and the altered timeline.

The council passed it 8-0, with Councilman Raul Campillo absent.

Opposition to the increase came from owners of businesses of all sizes, from multinational hotel chains to small sports rental companies. Officials from those businesses who spoke during the council meeting’s public comment period claimed again and again that the move would cause a crash in the tourism industry and automation that will eliminate workers’ jobs.

Councilman Sean Elo-Rivera, who pushed for the wage increase, said he thought those arguments fell flat, noting that prices of goods and services are already increasing.

“Opponents talked about picking winners and losers,” Elo-Rivera said. “Guess what? There are already winners. They are the billionaires and millionaires. So if we’re forced to choose a winner, you’re damn right I’m choosing the workers.”

The ordinance dictates that workers “at hospitality employers, which include hotels with at least 150 guest rooms, amusement parks, and event centers,” would see a raise from the city’s current minimum wage of $17.25 an hour to a higher wage on July 1, 2026.

The phases for the higher wage depend upon the sector in which the workers are employed.

For event centers, the wage rises to $21.06 next year, then to $22 in 2027, $23 in 2028, $24 in 2029 and finally $25 in 2030.

For hotels and amusement parks, workers will be paid $19 in 2026, $20.50 in 2027, $22 in 2028, $23.50 in 2029 and $25 in 2030.

There are 103 hotels the measure would impact, around 27% of the city’s 385 hotels, motels and bed and breakfasts.

Some opponents believe those numbers will produce dire results.

According to the Employment Policies Institute, the new $25 wage mandate will lead to a 45% increase in operating costs for hospitality businesses.

The institute also has researched the statewide $20 fast food minimum wage, finding that it contributed to the loss of nearly 20,000 jobs in two years, while increasing menu prices and causing some restaurants to close or stop expanding.

“Today, the City Council chose to ignore the local and statewide experience that severe minimum wage hikes have caused tens of thousands of Californians to lose their jobs,” said Rebekah Paxson, research director at the institute, in a news release. “San Diego will be no exception to this trend. Instead of repeating failed policies that put workers at risk, local lawmakers should be heeding the cautionary tales surrounding them.”

The proposal unanimously passed the Select Committee on Addressing Cost of Living in June. Elo-Rivera has had little sympathy for job loss claims during the debate over the plan.

“This is not radical, this is what basic dignity demands,” Elo-Rivera said at the time, before denouncing comments from some of the city’s largest businesses that such a proposal would cost tens of thousands of jobs. “We’ve heard these scare tactics before. Every time they say the sky will fall and every time they are wrong.”

Some of the venues impacted by the proposal include city-owned Petco Park, Pechanga Arena San Diego, the San Diego Convention Center and Civic Theatre, along with large hotels such as the Manchester Grand Hyatt and Marriott Marquis, among others.

But not every entity would have to pay the higher wages. San Diego State University, owned by the state of California, would find itself exempt for Viejas Arena and the Cal Coast Credit Union Amphitheatre.

The San Diego Zoo is exempt from the measure, but SeaWorld San Diego is not.

Councilwoman Vivian Moreno, who supported the motion, argued that it should apply to all workers, including those who work for the city itself. She called the move a step in the right direction, but added that it would have a disproportionate impact on the tourism industry.

Chris Cate, president and CEO of the San Diego Regional Chamber of Commerce and a former city councilman, said while he opposed the action, he did appreciate the fact that it is more expensive to live in San Diego than it used to be.

He said, however, that penalizing the business community was the wrong way to go about fixing that, despite calling the wage rise “well-intentioned.”

“We are deeply disappointed by today’s City Council vote to approve the $25 minimum wage mandate,” he said. “This shortsighted policy will drive up costs for businesses and families alike, adding to the already high cost of living in San Diego without addressing the region’s underlying affordability crisis.”

A report from the city’s Independent Budget Analyst’s office didn’t take a side, noting that while the move could benefit workers, it could also negatively impact the economy as businesses contract to cover higher overhead from labor.

“The current economic environment is particularly uncertain,” a representative from the IBA’s office said. “There is no clear consensus.”

Since the council adopted the Earned Sick Leave and Minimum Wage Ordinance in 2016, the minimum wage within the city’s boundaries has increased from $10.50 to $17.25, higher than California’s $16.50 hourly rate and far higher than the nation’s $7.25 per hour mark.

However, the cost of living in San Diego has increased independently of the minimum wage. According to the Massachusetts Institute of Technology’s Living Wage Calculator, a single person would need to earn $30.71 per hour in San Diego County to support themselves while working full-time.

A two-adult and one-child household would need to earn $49.13 per hour by the same calculator.

Mikey Knab, co-founder of Business For Good, a nonprofit business collective advocating for pro-worker business policies, said he backed the proposal wholeheartedly.

“We know from experience that higher wages strengthen local businesses and neighborhoods,” he said. “A $25 tourism wage keeps money circulating in San Diego and builds shared prosperity for everyone.”

When the idea was pitched earlier this year, one San Diego institution balked at the potential costs. Caroline Perry, chief operating officer of the San Diego Padres, noted that the team pays “the highest mandated wage in Major League Baseball through the city’s Living Wage Ordinance, which adjusts annually for inflation.”

She called the new proposal “too extreme.”

“It would drive up the cost of living, make it harder for San Diegans to attend games, and hurt the local businesses that rely on Petco Park,” she said. “We urge the City Council to reject it.”

The Padres broke their single-season franchise attendance record in 2024, drawing 3,314,593 fans to Petco Park. The franchise is valued at $1.95 billion, more than triple what the late Peter Seidler paid for the team in 2012, according to Forbes.

“Being San Diego’s team means standing with San Diegans, not against them,” Elo-Rivera said.