Not only Americans, but local Glendora restaurants are suffering from the new passed law regarding the federal minimum wage policy. The new law became effective January 1, 2016.
Senator Bernie Sanders’ intentions of passing the minimum wage law is that he believes Americans should be getting paid more than the average wage. He thinks Americans are long overdue for a raise and deserve one.
According to Sanders’ campaign page, he says, “We must ensure that no full-time worker lives in poverty.” He continues saying, “The current federal minimum wage is starvation pay and must become a living wage. We must increase it to $15 an hour over the next several years.
With only being two months into the 2016-year, the new law has left bittersweet responses to Americans, especially in Glendora, California.
“This increase in the minimum wage is California’s second increase in 18 months,” said California Labor Commissioner Julie Su in a news release.
The first raise in California took place in July of 2014 by Governor Jerry Brown. This passing law was to increase the minimum wage to $9 per hour.
Before this first law was passed in 2014, the hourly minimum wage in California was not increased since January of 2008.
Some cities in California have already established minimum wages that are higher than the California minimum wage. These cities include: San Francisco, Oakland, Emeryville. They all have a minimum wage of $12 or higher, according to the Legislative Analyst’s Office.
The Fair Labor Standards Act (FLSA) that was created in 1938 was designed to limit the number of hours that the people work in a workweek. Thirty years later in 1968, the FLSA had lost its power. In 1968, the minimum wage in the United States was $1.60. If the United States had continued with the inflation calculator for minimum wage, than the minimum wage today would be more than $12.
Sanders’ says that Americans are long overdue for a raise. “In the year of 2015, jobs must lift workers out of poverty, not keep them in it,” said Sanders.
With the minimum wage being so low in the past, Sanders said that there is more public assistance from the federal government in order to maintain a living for Americans.
According to the Economic Policy Institute, “raising the minimum wage by just a few dollars would cause 1.7 million Americans to no longer rely on public assistance and it would reduce government expenditures on current income-support programs by $7.6 billion per year.”
The increase of minimum wage is hurting small businesses more than anything. Small businesses account over 70 percent of all operating businesses in the United States. With this raise, small businesses had to decide how they are going to mandate their business expenses.
While speaking to several small restaurant businesses in Glendora, Calif., the common theme with them all was the increasing in menu prices in the restaurants.
“Every vendor that I work with every single item that I buy has gone up because everyone has to compensate for that extra dollar with the increase,” said T Phillips Alehouse and Grill owner Jennifer Kerzie.
According to the Public Affairs Council though it says it would be good for small businesses to raise there prices and help increase consumer demands. The restaurant owners in Glendora seem to disagree.
“It has created not only extra expense for the wages but payroll taxes,” said Domencios owner Marie Vatante. “It really hurts us in payroll taxes. I did not think a dollar would make a difference, but it did which is why we had to open back up on Mondays.”
The increase in minimum wage for the local restaurants has caused them to raise the menu prices. The costs of supply for the restaurants such as food and cleaning products have raised just as much.
“The increase of pay has added an extra $2,000 to our payroll per month, so it added quite a bit,” said Frisella’s Roastery owner David Frisella.
This new law is already causing concern for the business owners on how they are going to keep doors open. They do not want to cut back on employees, but if the minimum wage continues to increase, getting rid of employees is the next step or even worse closing their doors.
The disheartening thing about the 2016 increase is that it is not going to stop. Within the next five years, California is planning to add a dollar to the minimum wage each year until minimum wage is $15.
“Costs have gone up and has cost us more money,” said Plaza Produce owner Clay Edwards. “I try not to have a problem with, but I need to understand that wages go up, then prices go up and people need to understand that as well.”
Minimum wage was intended for people to live fully off of, but that is what seems to be happening. It seems to be the solution for people to stop relying on public expenses. California’s governor Jerry Brown also agrees with this.
Brown is strongly against the increasing wage and believes it could hurt the poor people even more. Also, that it will put the poor people out of work. Brown does not mind the $10 per hour right now, but does not think it needs to go any higher than that.
The $10 minimum wage has already cost California $250 million. If the wage increases a dollar per year until it becomes $15, it would add an additional $4 billion annually by the year 2021.
According to the California Department of Finance, they long for the state to not go above $10 an hour. Since the restaurants are apart of small businesses, a lot of them do not have the profits to handle the increase of minimum wage. There are not many options to solve this solution, they either raise prices in menus or close completely.
If you look at the federal minimum wage it is $7.25 an hour and as of right now there is no state that has passed the increasing minimum wage of $15. California could be the first to do so, even with Brown doing everything in his power not to pass it.
“I think the minimum wage position is designed for entry level positions for people who are going to school full time, people who work in the hospitality industry and no one else,” said Kerzie.
The small businesses restaurants are completely suffering. Some of the owners of these resaurants mentioned that their employees would rather not have the increase because they are lucky they have a job right now.
“I know that the younger kids that I talk to here at Domenicos that they did not even care if they got a raise,” said Vatante. “They understand that they do not have car payments, house payments, and they were happy with that.”
So the answer to why the minimum wage is increasing and most likely will continue to increase leaves the restaurant owners in Glendora still confused. They do not want to close their doors over something that they cannot help.
“Everyone thinks minimum wage is good and yes it is good for the individuals, but I also think on the flip side increasing minimum wage does not matter because like for us for example we just increase the cost of our food,” said Frisella. “It is like a teeter tooter affect, you get more, but have to pay more for that same item now, so I think it is a wash anyways.”