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San Jose adopts Bay Area CPI for living‑wage adjustments; labor urges one‑time catch‑up
Summary
The City Council changed the living‑wage methodology to use the Bay Area CPI effective July 1, 2026, to simplify administration. Labor and community groups asked for a one‑time catch‑up raise to make up for a zero adjustment in the prior cycle and urged parity with the airport living‑wage standard.
The San Jose City Council voted unanimously to change its living‑wage adjustment methodology to the Bay Area Consumer Price Index (CPI), aligning the city’s approach with the airport policy and easing administration, effective July 1.
City staff told the council the change replaces an opaque vendor‑derived geographic assessment that produced a zero adjustment for the most recent year and that switching to a CPI‑based formula restores predictability and transparency.
Labor groups and community advocates urged the council to adopt a one‑time catch‑up adjustment to recover pay lost while the previous methodology yielded no increase. Mary Louise Auerhahn of Working Partnerships cited the cost‑of‑living pressures faced by contract workers and urged the council to include a make‑up adjustment so the baseline wage is not permanently reduced.
Staff said the living‑wage rate under the new formula is $26.73 per hour (current calculation) and that the change will primarily affect the floor for future contract negotiations; staff noted most large existing contracts already pay above the proposed floor. Councilmembers said the change corrects an administrative problem and asked staff to return with details if the Bureau of Labor Statistics discontinues the Bay Area CPI series.
What’s next: the methodology change is effective July 1; staff will implement the new formula and the council asked for a staff memorandum addressing the one‑time catch‑up mechanism and potential airport parity in a follow‑up action.
