Minimum-wage raises have hidden costs

A follow up to Chamber of Commerce President Al Smith’s letter regarding the minimum wage law in California (Jan. 30): Last year, our bighearted Sacramento lawmakers’ decided that on Jan. 1 it would be in the best interest of all that the minimum wage be increased a dollar an hour.

Now that doesn’t sound like much. After all, it’s only a dollar. However, a dollar an hour increase does not include the additional workman’s compensation insurance premiums and other associated taxes and fees that also increased.

To make matters worse, all state employers were assessed a Federal Unemployment Tax Act tax in mid-January. For those that have never signed the front of paycheck, FUTA is a tax that was collected to pay back for the extended unemployment benefits that our magnanimous political leadership generously provided to the unemployed during the Great Recession.

The fact of the matter, a $1 dollar increase amounts to over a 15 percent increase in a small business’ wage budget.

It’s no wonder why small business are shuttering their doors in California.

If it keeps going this direction, only the government will be employing people. Then ask yourself, how that is going to work out for you?

This story was originally published February 4, 2016 at 5:40 AM with the headline "Minimum-wage raises have hidden costs."