As of Monday, April 1st, California's state minimum wage jumps from 16 dollars per hour to 20 dollars per hour putting California at the top spot in terms of state minimum wage.
For some, this is a great step in the right direction of making minimum wage more live-able, but for others it means potential loss. This article focuses on Mr. Bynum, a franchise owner of a small barbeque restaurant in Southern California. For him, this jump in minimum wage means a huge increase in monthly expenses and an inevitable increase in his prices which he has found in the past few years has significantly dropped the amount of customers.
Restaurant owners are not the only ones concerned. An employee of the Californian barbeque joint shared his concerns of a more competitive job market as the minimum wage rises.
The billion dollar Fast Food Industry can afford this raise according to the article, and it appears that it will be beneficial for many people. But the small businesses and employees of those small businesses will suffer. Some owners may have to cut costs, reduce employee's hours or even shut down because they cannot budget for thousands of dollars more in wages a month.
A Professor of Economics at University of California, Irvine remarked that while the higher minimum wage creates winners, it also creates losers. Many appreciate the higher wage and it will improve their industry, but for others, it raises the cost of living and just isn't sustainable.
https://www.nytimes.com/2024/03/28/business/economy/fast-food-minimum-wage-california.html
ReplyDeleteThis would be a significant step in California's fast-food industry. The cost of living in California is high, making this change necessary for employees. On the other hand, this decision may cause many people to lose their jobs.
I remember in class we briefly touched on how with increased inflation, there have been increased prices and to balance this, an increase in wages paid to workers. Does this inflationary period relate to the reason as to why the minimum wage was raised or are there other reasons for this? Ultimately, we said that the increases did not cause a significant shift of standard of living because all factors are increasing by similar amounts.
ReplyDeleteIt's clear that California's substantial increase in minimum wage is a double-edged sword. While it aims to improve living standards for many, it poses significant challenges for small business owners like Mr. Bynum, potentially leading to increased prices and decreased customer traffic.
ReplyDeleteAs a Californian, I think this is great but onyl for large corporate or franchise companies. Like Zoran mentioned in his comment, smaller businesses get the short end of the stick as they now have an increased salaries payable with the same revenue coming in. For larger companies, it's taking a mere charge to their millions of dollars of profit. For people running a smaller company, that $4-5 dollar increase could lead to layoffs and reduced hours as they manage paying their employees more money.
ReplyDelete