By Brendan Fretwell
There are several positive and negative outcomes of the recent minimum wage change in California
For the past decade, the idea of increasing the minimum wage has been a constant talking point among politicians both at the state and national levels. California has taken the initiative to increase the minimum wage, which is tied for the third highest among all states.
Effective on Jan. 1, 2018, the California minimum wage increased by fifty cents from $10.50 to $11 per hour. From now on, the minimum wage will increase one dollar every year on Jan. 1 until it reaches a $15 per hour plateau in 2022.
This has an effect on both small and large businesses, since many of them rely on the services of minimum wage labor. Many businesses are staffed by a majority of minimum wage-earning workers. Over 2.2 million people in the U.S. earn minimum wage, which is roughly 2.7 percent of all hourly paid workers, according to the Bureau of Labor Statistics.
“I think it would be damaging,” said freshman journalism major Candelario Plascencia. “Small businesses rely on very tight resources to take care of everything in their businesses and that includes paying their employees.”
One of the positives of this increase is that minimum wage workers will earn a much higher annual income. This allows for the job market to look more enticing to teenagers and unemployed people who are just looking for a minimum wage job.
Additionally, a gradual increase in minimum wage could potentially reduce the poverty level.
If people earning minimum wage can afford to explore buying options rather than just getting what is cheapest or free, more money and business will be put back into the economy.
As there are two sides to every situation, there are also negatives to a minimum wage increase. If businesses, especially small businesses, have to pay their workers more, they will have to bring more money in somewhere else which usually means raising prices.
If raising prices is the solution, then the economy will still be stuck, because people will have to pay more for everyday goods that used to cost less.
Another negative aspect to the increase is that if a business doesn’t want to raise their prices to match their income being put towards salary, they might be forced to layoff employees or reduce their hours.
This is a very complicated and convoluted issue that involves a great deal of economics and predictive thinking. Either way, it seems as if the country is beginning to turn towards a higher minimum wage.
A total of 18 states have increased their minimum wage as of Jan. 1. The new minimum wages vary from $7.85 in Missouri to $11.50 in Washington.
California will see its minimum wage increase one dollar each year until 2022 when it hits $15. This is a big win for the “Fight for $15” movement that began six years ago in New York City.
This new wage increase even effects APU’s own Dining Services. Workers there will be part of the wage increase. Some students are wondering if this will change prices, hours of operation and maybe even the amount of hours student workers are able to take.
“The hours of operation are still the same,” said junior English major Emily Benedetta who works at Mexicali Grill. “So the same number of students will be required to fill in for the same number of hours. I can’t imagine anyone’s hours being cut down because of the new minimum wage.”
It is unclear at this point if the prices will go up at dining venues on campus.
“I really don’t know being a regular employee, but any decisions on pricing will probably be made in the future,” Benedetta said.
The main question regarding this new minimum wage increase is whether or not it will really be beneficial to those who are earning minimum wage.
“It is a start but it doesn’t help drastically,” junior English major Megan Agler said. “I think we will have to wait until this completely unfolds in 2022 to see whether or not the new minimum wage has a positive effect.”
The new minimum wage of $11 per hour is only the beginning in a long journey towards a $15 minimum wage. It is difficult to tell what kind of effect this will have in the long run, because for now the minimum wage has only increased by fifty cents.