Normally, it wouldn’t be a huge deal to have one mall that sits on the border between two cities. There might be some small differences in laws or sales tax, but at the Westfield Valley Fair Mall in California, there’s a huge difference. It sits on the border between the cities of San Jose and Santa Clara, and San Jose recently raised the citywide minimum wage by $2.

Yes, the minimum wage law does apply to the mall, and management knows exactly where the border between stores is. For example, it runs down the middle of the mall’s Gap store. One pretzel store with multiple locations in the mall rotates employees through its two stores, which are in different cities within the mall. As NPR’s Planet Money team learned, it gets complicated.

Managers find that the best candidates for jobs tend to accept positions on the San Jose side, where the minimum wage is $10 per hour. This problem isn’t very complicated. Store owners really have two choices: on the Santa Clara side, they could pay their employees more than the minimum wage of $8 to start. Maybe they could even match the $10 per hour minimum wage on the San Jose side. Instead of doing that, store owners simply keep starting pay to the local minimum and deal with the consequences.

“We get the bottom of the barrel here,” the manager of one shoe store told NPR, presumably confident that his employees aren’t big public radio listeners.

A Mall With Two Minimum Wages [NPR]
Episode 562: A Mall Divided [NPR]

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