California Minimum Wage Going Up:

As you may know, the California Fair Wage Act of 2016, which increases the minimum wage from $10.00 per hour to $15.00 per hour by 2022, went into effect on January 1, 2016. The hourly minimum wage will increase from the current $10 to $10.50 on Jan. 1, 2017, then to $11 the following year, and increase by $1 annually until it reaches $15.00 in the year 2022. Economists have estimated that under this measure, nearly six million, more than one-third the state’s workforce, will receive a raise.

We’ve considered the impact of this legislation on our operating budget, and it extends beyond those now making the $10 per hour minimum wage. Increases to our entry-level employees creates upward pressure on wages across the board. All hourly worker wage ranges will need to be raised, creating a 10-15% increase to our labor costs. As a result, our labor prices will increase annually in parallel with the wage adjustment schedule outlined in the legislation.

There’s no shortage of controversy over the new legislation. How will it affect employment? Does increased minimum wage fight poverty? Will it drive companies out of California? Will it lead to jobs being sent overseas?

Jobs in our industry can’t be offshored, and only time will tell how we are all impacted by the new law. In short term, we are happy for our employees and the opportunities this creates in their lives, and appreciate the understanding of our customers as we increase prices to accommodate these new costs.

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