SAN JOSE (CBS SF) — Businesses at the Westfield Valley Fair Mall which straddles the San Jose – Santa Clara border are finding out workers are gravitating toward businesses on the San Jose side because of differences in each city’s minimum wage.

In 2012, businesses in the western portion of the mall in Santa Clara paid a minimum wage of $8 an hour, but beginning that year those on the eastern side in San Jose began paying a $10 an hour minimum wage.

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Philip Sandigo, the manager of a shoe store, told NPR that when San Jose raised its minimum wage, he lost about half his staff to stores on the other side of the mall that paid $2 an hour more.

They went to the stores on the side of the mall that paid $2 an hour more and Sandigo said to this day it’s a struggle to find new hires.

“We get the bottom of the barrel here,” Sandigo told NPR. “Not really focused. … One guy came in high the other day.”

The Gap store at the mall sits exactly on the city line and faced documenting how long its lowest-paid employees spent on each side in order to pay them accordingly.

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Instead, the store decided to pay all its minimum wage workers the higher wage.

There are two Wetzel’s Pretzels stores, each on opposite ends of the mall, with those on the Santa Clara side earning the lower minimum wage.

Franchise owner Yvonne Ryzak told the Wall Street Journal she rotates employees between each store. “That way, I don’t have employees who are resentful that their colleagues get paid more than them,” she told the WSJ.

Ryzak also had to account for the 25 percent higher wages she was paying. Ryzak has raised some of her prices but told WSJ she also gives employees up to 20 percent of her stores’ profits each year – bonuses she predicts will shrink as the rising wages chip away at her bottom line.

Since the 2012 hike, minimum wage rates have changed again wth Santa Clara at $9/hour and San Jose at $10.15/hour.

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