There are times as a business advocate in California where I find myself taking off my glasses, rubbing my eyes and wondering if this state has finally reached the bottom of the barrel when it comes to anti-business sentiment. This week proved to be one of those times, and I wonder if we’ll ever reach that bottom of the barrel.
On Thursday, the Legislature passed SB 3 by Sen. Mark Leno of San Francisco. The bill looks to incrementally increase California’s minimum wage to $15 an hour by 2022. Gov. Jerry Brown has announced he plans to sign the bill Monday. A raise of this magnitude this quickly represents a devastating blow to California’s businesses and employers. I’m certain we will all be witness to more businesses being lost and many jobs moving to surrounding states that have more business-friendly climates.
As the leader of one of the Valley’s largest business advocacy organizations, I’ve had the opportunity to interact and hear from business leaders in different industries. Almost to a person their opinion on this issue is the same, and it’s one of real fear the impact that a wage increase of this size will have on their businesses and ability to provide jobs. With unemployment in Fresno County at over 10 percent and our region slowly climbing out of the recession, this will further hurt our progress out of the last economic downturn.
Industries that will be the hardest hit are those looking to provide jobs to Californians who need jobs the most. We’ve heard from several restaurant members in Fresno – longtime establishments in our community – who will find their entire business model changing as a result of this.
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You may see sit-down restaurants converted to fast-casual eateries, or switching to a no-tip model, which results in higher costs for everyone. That’s what you may see – you’re certain to see reduced hours or worse, layoffs or jobs going unfilled.
What is the benefit to a higher minimum wage when you lose your job, or the cost of everything you buy goes up in order for your employer to pay these wages?
Farmers in the Valley, who feed the world and are the economic engine of our area, will also be placed in the difficult position of hiring fewer employees due to rising labor costs coupled with the unavailability of federal surface water. They’ll have to shift away from producing labor- and water-intensive crops and move toward crops that are cheaper to produce. This shift signifies that we will become less competitive with foreign markets in trading, and we will become more dependent on them when it comes to producing what we eat.
Restaurants and farms obviously aren’t the only industries impacted here. According to the Los Angeles Times, the impact to the bottom line to California state workers alone is $1.2 billion. This is to say nothing of the increased costs of child care, housing, transportation and other necessities that will surely result.
The minimum wage in California increased to $10 just over three months ago. There is no way to quantify the impact of that increase in such a short time – making a move now to drastically raise the wage again is reckless.
Time is running out. The majority in Sacramento proved again this week that employers, small businesses and job creators across California are the enemy. It’s now up to Brown to reconsider his position and veto this legislation. He needs to give the newly implemented wage increase time to work.
Allow job creators across California the resources to put people to work. Give businesses in the state a fighting chance to keep their doors open and keep people employed.
The American Dream is not dead. All of us have the opportunity through education and hard work to provide for our families. I urge Fresnans, business owners and citizens alike, to take a stand and urge the governor to veto this bill.
Nathan Ahle is president and chief executive officer of the Fresno Chamber of Commerce.