Minimum Wages Rising In Silicon Valley Cities Next Year

LOS ALTOS, CA -- To those trying to make ends meet in the high-priced Silicon Valley, there's good news and bad news on the horizon next year.

The good news: Minimum wage rates are going up from $13.50 an hour in most cities to $15.

The bad news: You'll still be living out of your car or in someone's closet at that rate -- unless you have the sweetest deal ever.

The cities of Los Altos, Mountain View, Redwood City, Palo Alto, Cupertino and Santa Clara are hiking the wage rates to $15 on Jan. 1, up from $13.50 at the current level. San Jose's is now at $13.

For a metropolitan area where the median price of a home is $1.2 million, that $31,200-a-year income pales in comparison to what a worker would need to make to pay for the average amount of expenses.

"I think everybody already pays that," Los Altos Chamber of Commerce President Pat Kapp said. "The bottom line is, at $15, it stings if someone's not complying with it."

The Economic Policy Institute based in Washington, D.C. has implemented a budget calculator that surmises a family of four consisting of two adults and two children living in Santa Clara County would need a household income of $129,092. Expenses that are factored in include: food, child care, transportation, health care, taxes and other necessities -- as well as the obvious housing. The $2,522 a month figured to pay for a roof over the family's head is just shy of the total, gross monthly amount a worker with a $31,200 annual income would make. Essentially, at $15 an hour, all the family's income would go toward housing with one breadwinner.

The issue gets far worse as the worker travels north to live. Residents of San Mateo County require an annual income of $156,292.

"I would say that, first of all, getting people closer to an adequate standard of living is an improvement over the position low income families were in before," Economic Policy Institute researcher Zane Mokhiber said in addressing whether the wage increase is for nothing.

"While wages are a very important piece of the puzzle, there are also other policy solutions that can directly supplement some of our budget categories," Mokhiber added.

He listed subsidized child care, better health care coverage (whether through the ACA, Medicare/Medicaid or other potential healthcare policy solutions) and investments in public transportation reducing the need for people to own cars, as examples of other policy avenues that can have a direct and positive impact on alleviating some of the pressures low-income families face.

One other thing to keep in mind, the calculation falls almost $100,000 short if only one parent is working. Still, households often end up "with a whole host of things people pay for," Mokhiber reminded.

The problem is so pervasive in the South Bay and San Francisco that waiters are joining a trending gig economy, which consists of independent contractors assigned to several tasks within their industry. An Intuit study predicts that 40 percent of the American workforce will fall into this category by 2020.

The key here is time management. How does a worker get the most money in an infinite amount of time spent not sleeping?

--Image via Shutterstock