The Austin City Council voted Thursday to raise the minimum wage for most city employees to $22 an hour — or for now, as close to that as the city’s budget allows — to combat vacancies as Austin’s cost of living continues to rise.
The council’s resolution calls for the city to adopt a living wage of $22 an hour for all regular staff, sworn employees like firefighters and police officers, temporary employees and those employed through contracts with the city. The only group excluded would be employees in the city’s summer youth program.
If the city manager finds that a $22-an-hour wage is not financially feasible this year, the budget will include the most significant wage increase possible. The city manager will also provide a plan and timeline for eventually reaching $27 an hour for city employees, according to the resolution.
City Council Member Vanessa Fuentes proposed the resolution and Council Members Ann Kitchen, Chito Vela, Kathie Tovo, Pio Renteria all co-sponsored it.
The item was approved as part of the consent agenda with little discussion. The resolution says the city needs to pay employees more, noting that average rents in Austin have increased 35% in the last year, appraised market values for homes have increased 56% since last year, and the nation is experiencing high rates of inflation.
It is unclear how much it would cost the city to raise all employees up to $22 an hour. The city’s Living Wage Working Group — which was created by the council — issued a memo in April with a preliminary estimate of between $18.2 million and $22.8 million for the raises in the next fiscal year.
The resolution says current data are not sufficient for the council to make an informed decision on this issue and the possible financial trade-offs it might require, but acknowledges that the city is in a dire staffing crisis.
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Aiming to stay competitive with higher minimum wage
Fuentes told the American-Statesman that raising wages for city employees is a priority because the longer the city waits to take action, the more workers it will lose and the bigger wage gap it will have to close.
“This isn’t just unique to the city of Austin. Many industries are feeling the labor shortage. And so what we need to do as a city to ensure that we remain competitive is to raise the wage,” Fuentes said.
Vela said $22 an hour is probably unrealistic for this budget cycle, but he said he is committed to raising the lowest-paid employees in the city and working to raise the wage overall.
“I basically want every extra dollar that the city has to raise wages at the lower end. We’ve got to get our $16-an-hour, $17-an-hour employees up to as high as we can,” Vela said. “I think that has to be a start for basically a steady rise to get everybody above $20 an hour and hopefully to $22 an hour as soon as possible. But I think that’s going to be more like a two- to three-year process.”
The council last voted to raise minimum city pay in 2015, when it authorized an increase from $11.39 to $16.83 an hour, to be phased in over five years. The city reached $15 an hour in 2018. But, partly because of the financial impacts of the coronavirus pandemic, the city hasn’t raised the minimum staff wage beyond $15 an hour, though it did improve benefits for temporary staff and offer COVID-19 bonuses.
Since 2014, the state minimum wage has stayed at $7.25 an hour, the same as the federal minimum wage.
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The city is experiencing a record high 17% vacancy rate across all staff positions, and the Living Wage Working Group recommended Austin raise the base pay to $22 an hour to both help employees and to fill empty roles.
Carol Guthrie, head of Austin’s employee union and a member of the working group, told the council during a June 7 work session that the city is losing employees to private businesses because of pay and the demands of public sector jobs.
“We know that the employees are doing more with less; we know they are working mandatory overtime; we know that we have employees working out of their classification. We have admin staff still taking 911 nonemergency calls. We have park rangers providing support to the youth programs,” she said. “We cannot do anything about inflation; we can’t do anything about what it costs to fill up your car. But the one thing you can do, you can give your employees the wages needed to survive in this economy.”
Jeremy Hendricks, a representative of the Southwest Laborers’ District Council, said if the city raises the staff minimum wage it will have a ripple effect on other low-wage workers.
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City Manager Spencer Cronk said during the working group session that it is difficult for the city to raise wages because of a property tax limit the state passed in 2021. This cap prevents cities from levying taxes that would result in collections 3.5% greater than the previous year, not including new properties built, without voter approval.
Cronk told the council last week that he planned to present a wage proposal that includes information about increasing staff to $22 an hour, across-the-board wage increases and other compensation recommendations. He said he planned to present a draft budget in July; the budget has to be approved in August because it sets the tax rate for residents.
Fuentes said raising wages is both a practical step to address low staffing and an obligation the city has to be a good employer.
“By raising the floor and lifting our starting wages for all of our city employees, it would make a big difference,” Fuentes said. “It would ensure that our city of Austin employees know that we are hearing that we are seeing that the city is becoming less affordable, and that we have to do more for our city and our workers.”