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Meanwhile, hoped-for startups will never start up because the cost of staffing will be too steep. Increased labor costs will leave some existing companies no choice but to shelve expansion plans. None of these is advantageous to those the higher minimum wage is supposed to help.įurther harm will come to workers through the rising minimum wage’s impact on job creation. In far too many instances, the owner’s only options are: letting one of the workers go to keep the cost of labor affordable, cutting everyone’s hours for the same reason, or going out of business because neither of the first two options is feasible. It will have to add nearly the equivalent of an 11th full-time employee without receiving the benefits of the added productivity that a flesh-and-blood worker would bring. Think of a small business getting by by paying 10 workers $12 an hour.

When wages are forced up by decree, employment goes down.

Minimum wage laws, simply put, are not worker-friendly. “I have never seen worse economic judgment being brought to bear on key policy issues than what economic policymakers are doing in California right now,” says economist Lee Ohanian, a Hoover Institution senior fellow and UCLA professor. Unemployment is expected to remain in double digits through next year, and might still be as high as 8.5% in the first quarter of 2022, more than twice the rate recorded just before the lockdowns were begun earlier this year. The jobless rate for June was 15%, a slightly better showing over the 16.4% rate of May.īut the improved numbers shouldn’t be taken as a sign that the next increases, which are on the way to $15 an hour for the larger companies in 2022 and the smaller ones in 2023, should take effect as scheduled. 1, California’s minimum wage is scheduled to grow to $13 per hour from $12 for businesses with 25 or fewer employees, an 8.3% increase, and to $14 per hour from its current $13 for those with more than 25 employees, a 7.7% rise. But it means nothing for those who won’t get a “raise” because their job disappears, either because their employer can no longer afford their services, or the employer goes out of business because the draining combination of the lockdown AB5, intended to strip businesses of their right to use independent contractors rather than hired workers and the new minimum wage will be too much to overcome. “Not allowing this increase to go forward will only make life harder for those Californians who have already borne a disproportionate share of the economic hardship caused by this pandemic,” said the governor. On the final day of July, with lockdown 2.0 leaving owners and managers who made it through the governor’s first shelter-in-place orders with uncomfortable questions about their future, Newsom announced he would not “use his authority to suspend the scheduled minimum wage increase in 2021.” He wants to be sure “that Californians will get the raise they deserve.” The small businesses that worked hard enough to survive 2020’s downturn might be broken in 2021 by the governor’s obstinacy. Gavin Newsom has declined to put off the state’s coming minimum-wage hike. Note: It is recommended that employers review their current related pay rates and compliance practices, both for applicable state and local minimum wage rates as local minimum wage rates may vary by municipality.Just as he rejected pleas to suspend the execrable Assembly Bill 5 to ease the financial squeeze caused by the pandemic lockdowns, Gov. Included below are City minimum wage increases:

Therefore, each year as the minimum wage goes up, so does the minimum amount an exempt employee must be paid. The yearly minimum salary for properly classified exempt employees in California is twice the minimum wage x 2080 hours per year.