BERKELEY -- The city's lowest-paid workers could get an almost $3 per hour wage boost if a minimum wage ordinance proposed by a Labor Commission subcommittee Wednesday wins City Council approval.

The proposal "ensures that we will eventually have a wage that allows people who work in Berkeley to live in Berkeley," Angus Teter, chair of the Minimum Wage Subcommittee, told the commission and some three dozen members of the public.

The proposal raises the base hourly wage from the state's $8 per hour minimum to $10.74 per hour and would add $2.22 per hour for medical benefits, if the employer doesn't already provide them. The minimum wage would rise annually with the cost of living.

Additionally, beginning midyear in 2015, the minimum wage would increase annually by 55 cents per hour until it reaches Berkeley's "living wage" rate, the hourly wage the city requires its contractors and suppliers to pay their workers. The living wage, tied to cost-of-living increases, is now about $2 higher than the proposed minimum wage.

The additional 55 cents per hour would allow the minimum wage, over four or five years, to catch up to the living wage, which, Teter said, "gives businesses time to implement changes without the full shock of the adjustment coming all at once."

The Berkeley Restaurant Alliance and State Restaurant Association are the ordinance's most vocal critics.

David Rowe, representing Jupiter and Triple Rock beer houses, told the commission that Berkeley should stick by the state's minimum wage, slated to grow to $9 per hour in July, 2014 and to $10 per hour in January, 2016.

Alternatively, he said a regional minimum wage is acceptable. "For Berkeley to have its own minimum wage ordinance which is higher than the state, really puts Berkeley at a competitive disadvantage from its surrounding neighbors," Rowe said, citing increases in supplies and vendors as well as labor.

"We don't really want to start raising prices," he said.

Rowe further argued that it isn't fair for tipped servers to get the same mandated minimum wage as dishwashers and cooks. (A number of states and cities permit lower minimum wages for tipped workers.)

Most of the public speakers favored the proposed ordinance, although Chamber of Commerce Executive Director Polly Armstrong said many business owners fear speaking out, believing their businesses might face a boycott.

Proponents contended that increased wages would stimulate the economy and provide a stable workforce.

Ned Perlstein, retired economics instructor at Laney College, argued for the inclusion of tipped workers, saying that many restaurant jobs are part-time and don't include vacations, sick days or medical benefits.

"We believe in the mythology that small businesses generate a lot of jobs, (but) they generate a lot of crappy jobs," he said.

Retired social worker Carol Brill addressed the consequences of poverty for the community at large. (Census figures show 18 percent of Berkeley residents live in poverty, though the figure may be skewed by students supported by families.)

"We see (low-wage workers) in social services and we see them on the streets of our city," Brill said. "It's not acceptable for the richest country in the world not to be able to take care of its people."

Cities across the country are addressing poverty wages (the federal minimum is $7.25 per hour -- $15,080 per year) by enacting their own standards.

In November, voters in SeaTac, Wash. hiked the minimum wage to $15 and some elected officials in neighboring Seattle want to follow suit.

Leaders in the District of Columbia recently passed an $11.50 per hour phased in minimum wage.

San Francisco's minimum wage will be at $10.74 as of Jan. 1 and Mayor Ed Lee is calling on voters to raise it to $15. San Jose has a minimum wage of $10.15.

Berkeley labor commissioners didn't vote on the ordinance Wednesday, but asked the subcommittee to add a higher minimum wage for corporations with more than 1,000 employees in addition to the basic proposal.

They also asked that the ordinance, or accompanying resolution, ask the council to address issues to help small business owners face higher payrolls, including support for a regionwide minimum wage, for single-payer health care and for the establishment of commercial rent control, not currently legal under state law.

The proposal will come back to the committee in January for at least one more hearing before a recommendation is made to the council.