It is sure to be a welcome boost for millions of entry-level workers July 1 when, for the first time in six years, the minimum wage in California increases.
Minimum wage is set go from $8 to $9 in July, with another bump a year and a half later to $10 in January 2016, under legislation signed by Gov. Jerry Brown in September 2013. Labeled a “job killer” by many Republicans and most chambers of commerce, the impact on employers remains to be seen.
Occupational employment statistics provided by the California Economic Development Department show that on average in Riverside County, fast food workers were already earning, on average, at least $9 per hour in 2013. But at least one local employer, the Boys & Girls Clubs of Southwest County, believes the hike will definitely have an impact.
“Raising minimum wage for everyone sounds good in theory,” said Maryann Edwards, president and CEO of BGCSWC. “Records show that for those who are able to keep their jobs, it provides a small boost to their income. For some that may mean the difference between independence and staying at home with mom and dad, or being able to pay the rent each month for that single mom.
“But unfortunately, statistics also show that it negatively impacts more than it helps due to job losses as companies lay people off to try and make up for the added costs of mandated salary increases and the resulting payroll tax increases.”
BGCSWC has about 75 employees amongst its non-profit, affordable clubhouses in Temecula, Murrieta and Lake Elsinore. Many of its newly hired youth development professionals are right out of high school or college and enter the clubs’ YDP Mentoring Program at minimum wage, she said.
“The new minimum wage requirements will have a terrible impact on our ability to continue to serve at our current high level of staffing and training,” Edwards said. “It will directly impact our staffing as well as our mentoring of high school and college graduates seeking to strengthen their youth development skills before entering the job market in their chosen specialized field.”
In an effort to continue its mission, the non-profit organization charges a membership fee of $25 a year for a child aged 6-18 to attend a clubhouse after school. To offset the impacts of higher payroll costs, Edwards said the local Boys & Girls Club will have to increase its requests for donations and applications for grants.
“If you push on one side of the balloon, it will have to bulge out to make room for the displaced mass on the side that was compressed,” Edwards said.
Other area businesses will also likely need to make some payroll adjustments, according to Patrick Ellis, president and CEO of the Murrieta Chamber of Commerce.
“For some people it may cost an employee or two, or it might force people to reevaluate how they structure their employees and the time usage,” Ellis said. “It’s not a fun thing for businesses right now, but they don’t have a choice in the matter.”
Come July 1, employers should be prepared to post the revised minimum wage order at their job site, according to a spokesperson for the California Department of Industrial Relations.
Any employee whom feels like they are not being paid what they are owed should report it, said DIR Spokesperson Greg Siggins. He explained that the labor commissioner’s office then investigates claims and if necessary, issues citations and orders the employer to pay back pay to the employee. “We are here to enforce the laws and make sure workers are paid what they work for,” Siggins said.
Employers should also be aware that because salaries for certain exempt (from overtime) employees must be at least two times the amount of minimum wage: $37,440 as of July 1 and $41,600 as of Jan. 1, 2016.
The minimum wage increases also affect certain commissioned salespersons; they must earn $13.50 per hour as of July 1 and $15 per hour effective Jan. 1, 2016.
Meanwhile, the mean hourly wage in the Riverside County-San Bernardino-Ontario Metropolitan area, according to the latest statistics available for the first quarter of 2013, was $21.48 across all occupations, from lawyers to waiters and waitresses.
This is compared to a statewide mean hourly wage of $25.47. In the San Francisco-San Mateo-Redwood City Metropolitan area, the mean wage was $32.14; in San Diego County, $24.69; in Los Angeles, $25.36; and in Orange County, $25.11.
The federal minimum wage remains at $7.25 per hour amid an international push by fast-food workers calling for $15 per hour.