BAKERSFIELD, Calif. (KERO) — Lots of changes happen when the calendar rolls over, and one of the biggest in California is going to be the minimum wage hike.
The federal minimum wage is $7.25 per hour. The last time the minimum wage in California was close to that was 2007, when the state minimum wage was $7.50. In the years since, California's minimum wage has been increased, becoming $10.00 an hour in 2016, and as of 2022, $14.00 an hour. Beginning January 1, 2023, the state's minimum wage will be raised again to $15.50 per hour.
For workers, the increase in pay will be a big benefit, but some small business owners say paying the new wages will be a serious financial burden. Michelle Cooper, manager at the Antique Mall and Busy Bee in downtown Bakersfield, says she understands why people need a wage increase, but that this is coming at a hard time for business owners.
"Candy prices shooting up like crazy, so yeah, we also have to increase prices on the candy just to make sure that we are making the money back," said Cooper.
Rebecca Hall, manager at Tacos las Salsas in Bakersfield, says rising prices have already taken a toll on the business, and this wage increase will add to that burden.
"It's going to have a huge impact for us because we have less than 26 employees. Our California minimum wage has been $14.00 an hour for the year of 2022, so now with it jumping, it doesn't jump to $15.00. It's not a dollar increase like it has been the last five years. It's jumping to $15.50," said Hall.
Under the state's minimum wage provisions, businesses with 25 employees or less will see the highest increase in minimum wage because they had been permitted to keep their minimum wages lower than businesses with 26 or more employees. This year, they will have to catch up.
Cooper understands why people need higher pay, but says she doesn't believe raising the minimum wage is the answer for improving the economy.
"I can understand where they're coming from, but increasing it is really hard for the owners, especially with small business," said Cooper.
Richard Gearhart, an economic professor at California State University Bakersfield, says that while owners may be struggling to prepare for the wage increase, the benefits to workers are clear.
"It will help low-income workers in a number of ways," said Gearhart. "It should provide a little more income in their check which will allow them to spend more, save more, maybe send the kids to childcare, daycare."
Gearhart says more parents will be able to send their children to daycare and childcare programs, which will have a huge impact on child development.
"It allows for socialization and the acquisition of other skills. They can maybe hire tutors or extra help for their kids," said Gearhart.
While there are benefits to workers, Gearhart does acknowledge the downsides for businesses and business owners.
"From the 2022 level that's a big jump, an extra dollar fifty an hour," said Gearhart. "Just one extra worker, that's $60 extra dollars a week, so $3,000 extra dollars a year."
That extra pay in a year can add up quickly for small businesses like Tacos las Salsas and managers like Hall, meaning they'll be faced with raising prices or cutting employee hours.
"This location has been closing at 5:00 now instead of at 9:00 because the cost of having he employees here was too. much for the nights that we were losing money," said Hall.
Hall says she's having trouble hiring staff because they're already expecting more in pay than the business is able to support, but not all businesses are having that problem. Cristian Ramirez, manager at Express Employment Professionals, a staffing agency, says he expects the increase in pay will translate into an increase in job satisfaction and performance.
"For the people that will be coming in, you know, new associates that will be getting paid $15.50, i think for them they will be happy about it," said Ramirez.
While staffing services may see an uptick in jobseekers due to the wage increase, Hall says offering more pay is not the answer.
"It's just extra money that we are throwing out the door," said Hall, but she added, "To get quality employees, it's worth it."
