$15 Dollar Minimum Wage and Free College Education – What’s Going On In San Francisco?
San Francisco city representative Jane Kim tells Paul Jay that she helped lead successful ballot initiatives that won a higher minimum wage, free college for all, and a much higher affordable housing component in new developments; much of this fight has been against corporate Democrats
Paul Jay: Welcome to the Real News Network. I’m Paul Jay in Chicago at the Peoples’ Summit. And now joining me at the Peoples’ Summit is Jane Kim. Jane’s a member of the San Francisco board of supervisors, which is the same thing as being on the city council. Her landmark initiatives include leading San Francisco to be the first city in the country to make community college free for all residents. The Fair Chance act, which removed barriers to employment and stable housing for millions of Californians who have a conviction record, Passing a minimum wage law to increase minimum wage to $15.00 an hour by 2018, fought to increase the affordable housing requirement from 12-25% and has won an unprecedented 40% affordable housing requirement in two major housing projects in her district. Thanks for joining us, Jane.
Jane Kim: Thank you for having me.
Paul Jay: That’s a heck of a record.
Jane Kim: Thank you.
Paul Jay: So, before we get into some of the legislation you’ve passed, because I think it suggests a model for a lot of other cities about what’s possible, a little bit of your backstory politically. You ran for state senate.
Jane Kim: Last year.
Paul Jay: And won the Democratic primary. You wound up losing the election, but it’s an interesting story. Your opponent spent, what was it? $7,000,000 to defeat you?
Jane Kim: So we came in first place in the primary after being outspent two to one in the race.
Paul Jay: And Bernie Sanders campaigned for you.
Jane Kim: Senator Sanders campaigned with me and endorsed me in my race for state senate. And our opponent ended up outspending me almost four to one. He spent 6.75 million dollars in the general election against me.
Paul Jay: And why did they throw so much money to defeat you? And the money came from where?
Jane Kim: Well, this is the first state senate race in San Francis-
Paul Jay: Democrat versus democrat, which is something peculiar about California too.
Jane Kim: Yeah, so San Francisco’s a democratic town. And so all of our elected officials are under the democratic party. But we have a whole range of what it means to be a democrat, similar to the rest of the nation. And what we saw in November was an unprecedented amount of money. It was the first state senate race we had seen, post Citizens United. And so actually, most of that 6.75 million dollars was independent expenditures that came from the realtors, the private charter school movement, Chevron and other private interests.
Paul Jay: So then you were already on the board of supervisors? So you stayed on?
Jane Kim: Yes.
Paul Jay: All right. So let’s get to this wealth tax to start with. Free college tuition for all residents of San Francisco. And how are you paying for it?
Jane Kim: Well, so San Francisco has a crazy luxury housing market, as you probably have heard, one of the highest housing costs in the country. And so we thought, well why not ask those with the most to give just a little bit more to make San Francisco a more equitable city for everybody. San Francisco has the fastest growing income gap in the country according to Brooking’s Institute. And according to our own human services agency data, we have a wealth gap that is akin to the country of Rwanda. In fact, Rwanda shares and distributes its wealth slightly better than San Francisco. And so we thought it was important to put on a progressive, fair share economy package before the voters. And we thought a lot about, “Well, what is the best way for us to spent down that revenue?” And during the time it was-
Paul Jay: How much are we talking about?
Jane Kim: The revenue generates on average $44,000,000 a year.
Paul Jay: 44?
Jane Kim: Yeah. $44,000,000.
Paul Jay: And that’s enough to pay for college for everybody?
Jane Kim: Well, the story was, this was late 2015. Bernie Sanders was campaigning. And he was talking about free college. And we were really inspired by that message. And then the labor council had approached us and said, “What can we do for our community college?” Which, at the time was really faltering and had a declining enrollment. And so, they said, why don’t we make city college free? And so we looked at the numbers, and it actually wasn’t that expensive. It costs the city roughly 10-12 million dollars a year to make community college free. And so we worked on this ballot measure and we went to the voters last November, and we won with 63% of the vote.
Paul Jay: How vigorously was it opposed? How much are we talking about? An average wealthy house is defined as what in San Francisco?
Jane Kim: So we limited the tax to buildings and homes of $5,000,000 and above. And we also created a completely new bracket for homes and buildings of $25,000,000 and above. It was a very modest increase, anywhere from .5 to 1% increase. And it generates a lot of money for the city and county.
Paul Jay: That’s way less than they’re paying their real estate agent.
Jane Kim: Way less.
Paul Jay: Why so modest? If you’re going to do this, why so small?
Jane Kim: Why so small?
Paul Jay: Yeah.
Jane Kim: Which part?
Paul Jay: The percentage. [crosstalk 00:05:03] This is a transfer tax essentially, right? You buy a $10,000,000 house, you have to pay this half a point to a point.
Jane Kim: Well we wanted to win. And we polled, and we just saw what the voters would withstand. And how could we minimize the opposition as much as possible. And so we tried to balance generating enough revenue to make community college free and limiting the tax increase so that the opposition was minimal. And while there was opposition, there wasn’t as much money spent because it was, again, a very modest tax increase.
Paul Jay: And did you get the argument, “You can’t do this. People will move?” Or no ones’s moving out of San Francisco, because they have to pay another point on their house?
Jane Kim: Well, I do a lot of work around affordable housing, as you just mentioned. And initially, I had thought about investing that money in affordable housing. But we looked at the data, and in San Francisco, an individual that has an associates degree from city college, makes on average $11,000-$12,000 more than the same individual with just a high school diploma. And so we thought investing in human capital is a way of putting more money, real money in the pockets of everyday San Franciscans. And I think it’s really important for government to constantly rethink what it means to provide their citizens a foundation to successfully enter into the middle class.
Paul Jay: So this is won by referendum, not by city council vote?
Jane Kim: Right.
Paul Jay: Could you have won in city council vote? Or do you need the city council vote to get it to referendum?
Jane Kim: In California, we have a very unfortunate ballot measure that passed back in 1978 called Proposition 13. And it does require any tax increases to go before the voters.
Paul Jay: Now talk about the minimum wage, because that’s a fight that’s been waging everywhere. We’re headquartered in Baltimore. We just had a situation where the city council passed a very weak $15.00 an hour raise, which I think wouldn’t take full effect until about 2024 or something. And yet, it still got vetoed by the mayor with the argument that, “You can’t have it unless all the surrounding counties have it, because businesses just move and all that.” You must have had the same argument in San Francisco. Why were you able to win that? And that was by city council vote?
Jane Kim: This was also a ballot measure.
Paul Jay: Also a ballot measure.
Jane Kim: Yeah. So in San Francisco, actually back in 2003, San Francisco had passed a modest increase to our minimum wage ahead of the state of California. And all the businesses and employers made this argument. “San Francisco’s going to lose jobs. It’s going to lose jobs.” So in 2014, when we started hearing about the fight for 15 that was going across the country at that time, labor had come and said, “We want to go to the ballot and aggressively move up the minimum wage to $15 an hour.” There was a ton of opposition from the employers and the mayor and many members of the board of supervisors. And our office had come in to help negotiate a deal where we would have a unified approach to the minimum wage ballot. And what we put forward and what passed was raising the minimum wage to $15 an hour for all San Franciscan employees by 2018, with that health credit, tip credits and no carve outs.
Paul Jay: By carve outs, you mean what? No exemption for smaller businesses?
Jane Kim: We didn’t do an exemption for small businesses. And actually, the small businesses said that when minimum wage went up ahead with the larger employers, they ended up having to meet that wage anyway just to be able to compete on the market.
Paul Jay: [crosstalk 00:08:26] the workers.
Jane Kim: Mm-hmm (affirmative).
Paul Jay: to get it on the ballot itself, how do you get it on the ballot? You need so many signatures and then you get it on the ballot?
Jane Kim: Yeah, so there are several ways to get measures on the ballot in San Francisco. One is that you submit it through the board of supervisors, either with four signatures or with six votes of the board. Or you gather signatures amongst the voters.
Paul Jay: So I gather now that the $15 passed and you’re getting close to it implementing, most of the businesses in San Francisco have left the city now.
Jane Kim: That’s right. Our economy-
Paul Jay: Like it’s collapsed. Yeah.
Jane Kim: Dramatically collapsed.
Paul Jay: It’s kind of contradictory, because you want a tax big houses, but they’re all going to leave now because of the $15.
Jane Kim: Right. Well, so minimum wage will rise to $14.00 an hour in a few weeks, July 1st.
Paul Jay: Is there a single business left?
Jane Kim: You know it’s hard to calculate, but we’ve only been growing jobs in San Francisco. And in many ways, we’re very fortunate. I represent a very wealthy city. And so I think one of my responsibilities is to put forward dream policies that other municipalities can’t even afford to fantasize about to show that it can work and what happens when we do those things. So what happens when we raise minimum wage? What happens when we make community college free for all? And not to quote our president, but what it really means to make America great again.
Paul Jay: But you did just quote the president.
Jane Kim: I did just quote the president.
Paul Jay: Okay. Even on development projects to get a 40% affordable housing, I mean take all these measures including a measure I guess you weren’t involved with, and predated you, but you have a virtually a single payer healthcare, of a sort in San Francisco.
Jane Kim: Yeah.
Paul Jay: If you live in San Francisco, you get healthcare, period. Right?
Jane Kim: Yeah.
Paul Jay: Do you think this is applicable to poorer cities, like for example a Baltimore? Any of this stuff, is it applicable?
Jane Kim: Well, I think what makes it applicable, is that we demonstrate that it can work, that a city doesn’t collapse when it happens. That in fact, a city grows economically when we support our citizens, especially the ones that are most vulnerable. And it’s true, certain cities don’t have as much revenue as San Francisco, which is why we try to pilot really progressive policies for the country. But it doesn’t mean that the state can’t implement a universal healthcare system in a city like Baltimore. And by proving that we’re actually saving money in the long term, and growing a stronger economy-
Paul Jay: Maryland, for example is one of the richest states in the country. In fact, apparently there’s more millionaires in Maryland than in any other state in the country.
Jane Kim: I did not know that.
Paul Jay: It’s one of the stats cited. I’m not sure it’s true. The fight for this was also a fight within the democratic party. They went after you on your bid for state senate. And I would assume partly because of your record on city board of supervisors/city council. And take that to where we are at the Peoples’ Summit, which is a lot of the conversation here is about, “If you’re going to fight the oligarchy, that Sanders says is the target here if you want change.” But the oligarchy exists within the democratic party.: And like Baltimore, San Francisco, the fight is all in the democratic party. There’s no republican party to speak of. What do you make of it nationally, as you have experienced locally? Is the democratic party at a national level, is it possible to have wins where at the local level, it seems, yes. Like in a San Francisco, you can actually beat back at a city level, the power of corporate democrats to some extent and pass the kind of legislation. So do you think that’s possible at a national level?
Jane Kim: Well, one of the reasons why I supported Bernie Sanders is because he proved that a independent candidate with really progressive values could capture the attention of Americans and its support. And so, I do think it’s possible, but it’s a movement that we have to grow. It’s in some ways, easier on the local level. When I first ran for the San Francisco board of supervisors, I didn’t have a single endorsement. Democratic party didn’t endorse me. None of the newspapers endorsed me. Labor council, chamber of commerce, but we were able to go door to door. And were able to win that seat.
And even in San Francisco, a city that is viewed as incredibly progressive, I think we’re plagued by the same issues within our democratic party that plagues the democratic party nationally. Everyone in San Francisco is progressive until money’s involved.
Paul Jay: Yeah that’s the same story for Baltimore.
Jane Kim: Right. And so, you won’t find an elected that doesn’t believe in LGBT rights and gay marriage. But when you ask them, “How much are you willing to exact from market re-housing developers? How much are you willing to tax corporations?” Then you start to see a fissure within the democrats in San Francisco. And one of the reasons why I ran for state senate in California is because even though the democrats have a super majority in both houses at Sacramento, we’re seeing an increasing number of these business friendly democrats move up to the capital. And we’re seeing a capital that is increasingly being strangled almost by lobbyists and corporate interests.
Paul Jay: All right, thanks very much for joining us, Jane.
Jane Kim: Yeah. Thank you so much, Paul.
Paul Jay: thank you for joining us on the Real News Network.