Ag Today January 3, 2017

Minimum wage set to go up – at what price?

By Rachel Rosenbaum | Updated 3 days ago

Many businesses and their employees will have a jump in payroll starting with New Year’s Day — the minimum wage in California will step up by 50 cents.

The increase is one step in a series in the process of raising the state’s minimum hourly wage from $10 to $15 by 2022. Legislation was signed by Gov. Jerry Brown in April.

“Not all businesses will be impacted by the increase in minimum wage from $10 to $10.50,” the Yuba-Sutter Chamber of Commerce noted in an email. “Only businesses with 26 employees or more will need to increase wages to $10.50 starting on January 1, 2017.”

Businesses with fewer than 26 employees will have until Jan. 1, 2018, to increase the minimum wage 50 cents.

Brynda Stranix, president of Yuba-Sutter Economic Development Corp., said the wage increase may not have a positive effect on local businesses.

“I’m fearful that employers will suffer, trying to not only pay the minimum wage, but in trying to fairly compensate their other employees as well. In effect, raising everyone’s wages,” Stranix said. “In my small office of four, it would amount to a total of $20 per hour over the last couple years.”

Davin Norene is a walnut farmer in Sutter and Yuba counties with between 13 and 17 employees, not including management. He said most employees in agriculture make $15 or more, so the minimum wage isn’t what he is worried about; it’s an overtime bill that was recently signed.

“In brief, I think this hastens what has already become reality — the ag industry is going to be competing with a lot more industries for the same workforce,” Norene said. “But (the minimum wage increase) will not affect us as much as overtime. That’s the game-changer: It’s the 40-hour per week threshold that’s going to kill ag.”

Norene said he tries to maintain work year-round for his employees, and most got a $1 per hour increase in wages already this year.

“Rural California … is being subjected to the ideologies of people that live in urban (legislative districts) that want to create legislation for urban constituents,” Norene said, “it has no impact on their constituents, but it’s having a huge impact on our culture, our lives, our work.”

Ed Ritchie, former president of the Marysville Labor Council and challenger against Assemblymember James Gallagher, said he has been in favor of the minimum wage increase, more specifically the exemptions the law gives to hourly overtime.

“Nobody is more pro-business than the people working for those businesses,” Ritchie said Friday. “If you look at minimum wage and where it was years ago, had it just been tied to inflation, this is where we would be anyway… It’s very significant and important for working people.”

Local Assemblyman James Gallagher agrees with Norene’s take.

“It will drastically increase costs because you raise not only entry level worker costs but those who are mid-level would also need to be increased to account for their responsibilities,” Gallagher said in a text message. “For most small businesses it cannot be sustained with their current workforce…At the end of the day a business owner has no other choice but to layoff workers, cut hours, and delay hiring of new, part-time or seasonal workers.

Bottom line: It means less jobs. And that is something our region cannot afford.”

Here is the minimum wage increase schedule for the next several years, as passed by the Legislature:

  • Jan. 1, 2017: Minimum wage for employers with 25 employees or fewer: $10.00/hour; with 26 employees or more: $10.50/hour.
  • Jan. 1, 2018: $10.50/hour; $11/hour.
  • Jan. 1, 2019: $11/hour; $12/hour.
  • Jan. 1, 2020: $12/hour; $13/hour.
  • Jan. 1, 2021: $13/hour; $14/hour.
  • Jan. 1, 2022: $14/hour; $15/hour.
  • Jan. 1, 2023: All: $15/hour.