California Businesses and Workers Split on Minimum Wage Increase

As a father of three earning $8 an hour, Bakersfield resident Adula Harris may well benefit if Gov. Jerry Brown signs a bill that would raise California’s minimum hourly wage to $9 in July and then to $10 in January 2016.

But when asked for his thoughts about the bill, the 30-year-old desanitizer at the Bolthouse Farms plant on East Brundage Lane sounded more interested in how it would help others.

Working college students would have an easier time saving up for tuition, he said, and low-wage employees would find it easier to keep up with their bills.

“It’s gonna make a big difference,” said Harris, a former in-home caregiver who is able to make ends meet only because his unemployed wife receives welfare.

There is, of course, another side to the debate over raising the state’s minimum wage. Business owners and their supporters in the state Legislature fear the bill will backfire.

“In order to maintain their costs, businesses have two choices when the minimum wage is increased,” Sen. Jean Fuller, R-Bakersfield, wrote in an email Friday, a day after voting against the measure. “They can lay off employees or cut overall hours. Neither of those options is good for the employees.”

On Thursday, both houses of the state Legislature approved the bill, known as AB 10. It calls for raising California’s minimum wage for the first time since 2008. Gov. Brown has indicated that he will sign the measure.

The increase would put California above Washington state, which leads the nation currently with an inflation-pegged $9.19 an hour minimm wage.

The question now is, what happens next? Will boosting the pay of California’s lowest-paid workers inject more money into the economy, as the bill’s supporters hope — or will it force cutbacks by employers that cannot afford to pay more?

There are studies to support both conclusions.

The California chapter of the National Federation of Independent Business cited research suggesting that 52,000 jobs would be lost if the state’s minimum wage jumps the full 25 percent to $10 an hour. It said this would cost the state nearly $6 billion in lost economic output over 10 years.

Not so, according to AB 10’s author, Assemblyman Luis Alejo, D-Salinas. He pointed to a study by economics professors at three colleges, including the University of California, Berkeley, asserting that raising the minimum wage does not kill jobs in the near or the long term.

Neither is there consensus among managers at Bakersfield workplaces.

Mya Wilkins, a supervisor at the Mrs. Fields cookie store at Valley Plaza mall, has watched product prices rise because of shipping and other expenses unrelated to labor. She said payroll is a relatively small expense at the store.

“I don’t think it’ll hurt the business,” she said.

But over at the mall’s Ryderz clothing store, Assistant Manager David Sanchez predicted a domino effect of wage increases that would trickle upward, resulting in higher costs that would lead to reduced work hours and even layoffs.

Although Sanchez makes more than minimum wage, he said he’s holding out for a raise if his subordinates get one.

“If minimum wage is raised, shouldn’t I get a raise, too?” he asked.

That same scenario worries Darrell Feil, co-owner of Abate-A-Weed on Rosedale Highway. He hires entry-level workers with the understanding that he will raise their pay as their performance improves.

If he were forced to give raises to his four minimum-wage earners, the company’s other 21 workers would want more money as well. He said that would force him to mark up his products, which could possibly jeopardize his expansion plans.

“I think this is just a more burdensome cost that we have that really kind of … squeezes our desire to grow,” Feil said.

The same point is made by state Sen. Andy Vidak, R-Hanford, who represents parts of Kern County. He voted against the bill.

“Increases (in) the minimum wage now only jeopardizes the chance of new jobs being created in the Central Valley,” Vidak wrote in an email Friday.

Another local opponent of AB 10, Assemblywoman Shannon Grove, R-Bakersfield, suggested establishing different minimum wages for different industries. She proposed differentiating between the lowest allowable pay for manufacturing jobs and restaurant positions, for example.

For all the debate, 22-year-old Jas Kaur is pleased with the bill. She makes $8.50 an hour preparing food and running a cash register at Vests Market on Chester Avenue in downtown Bakersfield.

Her pay is certainly better than the $8 an hour she started at in April. But even though she works six hours a day, six days a week, it’s still a struggle saving up for a downpayment on a car.

“It’s not really making ends meet,” she said.

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Staff writer Theo Douglas and the Associated Press contributed to this report.