Millions of California workers will ring in the New Year with a pay raise as the Golden State raises its minimum wage by a dollar to $10 an hour starting Jan. 1.
The scheduled wage hike will bring California workers’ minimum wage up more than $2 over the $7.25 federal minimum wage. California joins 12 other states in raising wages for its workers in the coming year.
While the wage increase is a benefit to employees, some businesses are not on board with increasing wages.
Bob Sutherland, owner of four McDonald’s franchises in Chula Vista and 10 throughout the county, said the minimum wage hike will force him to cut 50 to 60 part-time employees to make ends meet.
“Minimum wage is not designed as anything more than an entry level position into the workforce to train people for skills that they’re going to use later in life,” he said. “We’ve employed about 85,000 young people in my 45 years (in business) and every single time you raise minimum wage we eliminate jobs, raise prices and buy less labor-intensive equipment.”
Sutherland said despite what lawmakers think, an increase to minim wage does not level the playing field for employers and employees.
“It forces you to compress the wage scale and eliminates the ability to give higher wages to the people who have been there longer and deserve them because you’re bringing people in who know nothing about the obligation they’re being asked to perform and they are being forced to start at a higher cost.”
Assemblywoman Shirley Weber, who represents the 79th Assembly District which encompasses portions of San Diego, Chula Vista and National City, said she supported the increase two years ago because it’s a way to try to lift people out of poverty.
She also said the claim that minimum wage increases eliminate jobs isn’t entirely accurate.
“It hasn’t proven necessarily to be true in some cities,” she said. “San Francisco has had high minimum wage for years and they attracted more jobs because you end up with a workforce that’s more interested in staying in the same job, not just using this job to move around.”
Ivan Arabo, store manager at Wrigley’s Supermarket in National City, said with the exception of two recent hires, his 35 employees make above minimum wage. Now that an increase is in effect it makes a small business like Wrigley’s surviving in a highly-competitive industry difficult going against grocery giants.
“Any increase in cost is not always good for the employer or for the business,” he said. “It’s really hard on the business.”
Wrigley’s employees who make $10 an hour, which was above minimum wage last year, will receive a pay raise so they can remain above the minimum, Arabo said.
Arabo’s family has owned Wrigley’s since 1979. The minimum wage increase means his family will spend more time at the store. He said his family usually puts in 80 to 90 hours a week; now with the wage increase means they’ll have to put in longer hours while employees may have to work fewer hours.
Arabo said the store will make some changes to remain competitive.
“With prices going up, expenses going up, there has to be a way to keep generating a profit,” he said. “We will be raising some prices a little bit, just enough to compensate for the difference.”
He anticipates food costs in its kitchen will go up about 50 to 75 cents
While Sutherland plans to cut more than two dozen jobs, Arabo insists that his employees’ job status remains secure, although they may work fewer hours than before.
Several big cities like Los Angeles and San Francisco are expected to raise minimum wage by more than the state mandated level. Both cities will have their workers making $15 over the course of several years. Workers in Los Angeles are expected to get the citywide increase by 2021. In November 2014, San Francisco voters passed Prop. J, which raises the minimum wage gradually to $15 an hour by 2018.
However the South Bay isn’t jumping on the $15 an hour bandwagon.
“The population of Chula Vista is only 10 percent of the county, so I think it wouldn’t make any sense for Chula Vista to go beyond the minimum unless San Diego city does and San Diego County does as well,” said Chula Vista Councilwoman Pat Aguilar.
Aguilar said raising the wage more than the minimum will put Chula Vista businesses at a disadvantage because as businesses have to increase their costs on products to combat the wage hike, consumers will look for products at a cheaper rate in surrounding cities.
