The wonky policy tweak comes in response to warnings from labor advocates and others that a faulty formula has been\u00a0shortchanging workers<\/a>\u00a0for years. Last year, San Jose\u2019s living wage level did not increase at all.<\/p>\n \u201cIt was a positive outcome for families that are really struggling right now,\u201d South Bay Labor Council Executive Officer Jean Cohen told San Jos\u00e9 Spotlight.<\/p>\n The change means workers covered by the living wage policy will see a larger pay increase than they otherwise would have on July 1, the day when the wage floor is adjusted each year. City officials estimate the pay bump will result in about an extra dollar per hour for workers by the time of their next contract negotiations. The city will not grant back pay to compensate workers retroactively for the sluggish wage growth of prior years.<\/p>\n \u201cWe\u2019re hoping that what happened on Tuesday is a reset and a reminder about the responsibility to ensure that the contracts that the city has with people are reflective of our values,\u201d Cohen said.<\/p>\n Advocates noted at Tuesday\u2019s meeting that while Bay Area residents faced a 20% increase in the prices of daily necessities over the past six years, San Jose\u2019s living wage has gone up just 14.7% \u2014 reaching $26.73 per hour without health benefits this year.<\/p>\n San Jose\u2019s minimum wage<\/a>, which covers all workers in the city who are not employed by companies with city service contracts, is set at $18.45 per hour.<\/p>\n The living wage policy, first put in place in 1998, covers hundreds of city contracts with companies providing a wide variety of services, such as parking lot management, automotive repair, facility maintenance, food services and pest control. A similar policy using a somewhat different methodology also covers workers employed by companies operating at San Jose Mineta International Airport.<\/p>\n The living wage hourly pay rate, adjusted each year, is based on a combination of two factors: federal poverty metrics and local figures intended to capture the\u00a0cost of living in San Jose<\/a>.<\/p>\n To derive these local figures \u2014 which take into account daily expenses such as transportation, health services and housing \u2014 San Jose has relied on data provided by a third-party vendor. However, officials said the vendor recently changed how it compiles the numbers, leading to inconsistencies with prior reports.<\/p>\n \u201cWe started digging into it in the last couple of years, and their change of methodology became really not understandable and unclear to all of us,\u201d Public Works Director Matt Loesch said during the meeting. \u201cSo we wanted to make it clear and make it transparent.\u201d<\/p>\n After reviewing similar living wage policies adopted elsewhere in California, San Jose officials proposed to jettison the dubious proprietary data set and instead rely on the federal government\u2019s consumer price index for the Bay Area, a measure of inflation in the region. This is the same approach that has long been used to set living wage levels for airport workers, such as those who work at concession stands.<\/p>\n Loesch suggested the impact of the policy change on the city budget will be minimal, noting that workers covered by the city\u2019s largest contracts \u2014 janitorial and security services \u2014 are already paid well above the new rates and will therefore not be affected.<\/p>\n While speaking in favor of the formula adjustment, labor advocates urged the city to follow it up with a pay increase for airport workers. The discrepancy between the living wage formula for these workers and others\u00a0in the city<\/a>\u00a0has meant significantly lower pay increases for employees at SJC. This year, airport workers covered by the living wage policy were paid $21.34 an hour before benefits, roughly $5 less than their counterparts elsewhere in the city.<\/p>\n Martha Adame, among the airport workers who spoke during the meeting, said this level of compensation makes it difficult for her to\u00a0afford rent and other necessities<\/a>.<\/p>\n \u201cI feel so frustrated because I got a feeling the airport employees \u2014 we are not important,\u201d she said.<\/p>\n Contact Keith Menconi at\u00a0keith@sanjosespotlight.com\u00a0or @KeithMenconi on X.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1777568951_232_LNM-20250616-SJSPOTLIGHTLOGO-01.jpg\")
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