Raising the federal minimum wage from its present $7.25 hourly to $9.80 over the next two years would create 100,000 new jobs.
The proposed six-year contract contains many improvements over previous offers.
The trouble started when the city responded to budget deficits with pay and benefit cuts for city workers.
A lively crowd of around 200 labor and community activists, gathering at IBEW Local 232 headquarters, kicked off a campaign to raise the minimum wage in San Jose.
"It's not just about CWA and IBEW any more - it's about one union fighting a greedy company."
The company forced a strike with a draconian contract offer that would slash wages, increase health care costs and demolish pensions. Workers rejected the offer by a vote of 504-116.