What started as a San Jose State sociology class project could add San Jose to a handful of cities nationwide to set its own minimum wage.

Measure D on the Nov. 6 ballot would establish a San Jose minimum wage starting at $10 an hour -- $2 higher than the current statewide minimum -- with automatic future increases pegged to inflation.

San Jose voters also will decide, with Measure E, whether to allow the city's two cardrooms to increase the number of gaming tables.

Minimum-wage hike backers, including labor unions, are calling Measure D a moral necessity in pricey Silicon Valley.

"If you work hard and play by the rules, you should get a decent wage," said Scott Myers-Lipton, the San Jose State sociology professor whose students hatched the idea for a city minimum wage.

Businesses groups are spending heavily to defeat the wage hike, which they say will only lead to fewer jobs in a city still struggling to kick its economy into gear.

"Some people will get higher income, but others will lose their jobs or have their hours cut back," said Vic Ajlouny, a consultant for the opposition including the San Jose Silicon Valley Chamber of Commerce.

There's little dispute that San Jose, which bills itself as the Capital of Silicon Valley, is an expensive place to live. The Council for Community and Economic Research ranks San Jose behind only New York, San Francisco and Honolulu as the most expensive U.S. urban areas based on an index of costs for housing, utilities, grocery items, transportation, health care and other goods and services.


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But there's much debate over whether having San Jose establish its own higher minimum wage would do more good than harm.

Both opponents and supporters of a San Jose minimum wage point to various studies to bolster their argument that raising minimum wages either reduces jobs or has no measurable effect on employment.

California is among 18 states with hourly minimum wages higher than the $7.25 federal requirement; the state last raised its minimum wage in 2008 from $7.50 to $8 an hour.

Many states don't allow individual cities to set minimum wages, and only a handful -- San Francisco, Santa Fe and Albuquerque, N.M., and Washington, D.C. -- have adopted them, said Jen Kerns, a minimum wage law advocate with Washington, D.C.'s National Employment Law Project.

Measure D would set the minimum wage at $10 for employees who work two or more hours a week with increases based on the Consumer Price Index starting in 2014. The city would be required to administer and enforce its provisions, something opponents say would create a costly bureaucracy.

Teresa Nguyen, who owns downtown San Jose's Motif Restaurant & Lounge, said that if Measure D passes she'll have to let half her servers go.

"If I have to raise the wage, I'd probably cut half of them, up to six," Nguyen said. She noted that her servers make most of their money in customer gratuities rather than employer wages, which if raised would eat into her bottom line. And she fears that passing the wage hike on to customers by raising prices would make them seek out alternatives at Santana Row or nearby suburban towns like Los Gatos.

But while most business groups share Nguyen's concerns and oppose the measure, not every shopkeeper is against raising the wage.

Robyn Levine, who owns Willow Glen apparel store Details, is voting for Measure D and plans to keep her part-time student clerk if it passes, even though it will require that she pay her $10 an hour instead of $8.

"People need to make a fair living and there needs to be a correction," Levine said, likening the impact of the forced wage hike to an uptick in the price of gasoline. "You just have to make adjustments."

The debate over minimum wage has eclipsed talk about expanding gambling. Measure E, sponsored by the Bay 101 cardroom, has its critics, who argue that revenues from increased gambling are overstated and won't cover the added enforcement burden on city police. But Measure E has yet to draw a formal opposition campaign.

The Measure E campaign has pointed to San Jose's deficit-plagued budget and recent layoffs, including police officers, to argue that adding more gamblers will deliver an additional $5 million in revenue from the 15 percent tax on cardroom operations, which currently generates $15 million a year.

Voters in 2010 raised the cardroom tax from 13 percent to 15 percent and allowed the cardrooms to each expand from 40 to 49 playing tables. Measure E would allow each cardroom to expand from 49 to 79 tables over two years.

Contact John Woolfolk at 408-975-9346. Follow him at Twitter.com/johnwoolfolk1.

San Jose Ballot Measures
Measure D: Establishes the minimum wage in San Jose at $10 per hour with an annual increase, if any, based on the Consumer Price Index beginning Jan. 1, 2014, and city enforcement through fines, penalties, civil actions.
Minimum wage facts:
California is among 18 states with hourly minimum wages higher than the $7.25 federal requirement. The state of Washington has the highest requirement at $9.04 an hour. California last raised its minimum wage in 2008 from $7.50 to $8 an hour.
San Francisco, Santa Fe and Albuquerque, N.M., and Washington, D.C., have citywide minimum wages. San Jose and many other cities have "living wage" laws that apply only to city-hired contractors. San Jose's living wage last year was $13.59 an hour with health benefits and $14.84 without.
Measure E: Allows each of San Jose's two cardrooms to increase the number of gaming tables from 49 to 79 by 2014, and would allow without additional voter approval slot machines or other gambling devices if they become legal in California.
San Jose cardroom facts:
San Jose allows two cardrooms, currently operating as Bay 101 Casino and Casino M8trix. They do a combined $100 million a year in business and generate $15 million a year in taxes.
San Jose voters in June 2010 approved Measure K increasing the cardroom tax from 13 percent to 15 percent and allowing an increase of nine tables each, from 40 to 49.