Westfield Valley Fair Mall: A Tale of Two Cities

When I was growing up in San Jose, there were two outdoor malls essentially across the street from one another (although there were a few houses in between--see photo to right): one where Macy's was the primary store, and one where The Emporium was. Eventually, these two malls were combined into one, enclosed, and renamed Valley Fair (see the photo below and to the right).

Valley Fair still exists although the Westfield chain bought it out a few years ago. If you walk around the mall, it would probably strike you as a typical mall. It includes "standard" department stores (Macy's, Nordstrom's), a number of specialty stores (e.g., Apple, Sport's Authority), and a food court. What isn't at all obvious (not that it should) is that the current mall lies in two cities. One part lies in the city of San Jose; the other in the city of Santa Clara.

This generally isn't a major issue, but in 2012, San Jose raised its minimum wage from $8 an hour to $10 an hour. This change created two economic worlds within a single building. This meant that employees working in different locations in the mall but doing essentially the same work were sometimes paid different wages, and one store, The Gap, actually lies in both cities, which raises the interesting issue as to what wage the employees should be paid. This unique situation is the subject of a recent Planet Money podcast ("A Mall Divided"), which you can download from iTunes or listen to at the Planet Money website.