Small businesses fear minimum wage hikes


NEIL: THE MINIMUM WAGE IS UP, UP AND AWAY BUT IT MAY BE FORCING ONE BUSINESS TO CHARGE 20 BUCKS FOR A BURGER BECAUSE THE COST OF KEEPING THE HELP IS GETTING OUT OF CONTROL. ROBERT GRAY IS IN EMORYVILLE, CALIFORNIA WITH THAT STORY. REPORTER: WE ARE DOWN THE STREET FROM PIXAR STUDIOS. THIS IS A VERY SMALL CITY, 2.1 SQUARE MILES, ABOUT 12,000 RESIDENTS HERE. WE ARE DEFINITELY SEEING THIS PLAY OUT, THE BALANCE BETWEEN PAYING WORKERS MORE IN A VERY HIGH COST OF LIVING CITY WITH SMALL BUSINESSES, 55 OR FEWER EMPLOYEES, IN THIS CASE, IN KEEPING THEIR PROFIT MARGINS HEALTHY ENOUGH TO KEEP SUSTAINING ITSELF. YOU ARE LOOKING AT AN AREA WHERE WE KNOW HOUSING IS EXTREMELY EXPENSIVE, UTILITIES ARE, AND SO IS FOOD AS WELL. IN FACT, THE HIGHEST MINIMUM WAGE AFTER JULY 1st WENT UP TO $16.30 AN HOUR, MORE THAN TWICE THE FEDERAL NUMBER AND TWO BUCKS HIGHER THAN CALIFORNIA AS WELL AT $15 AN HOUR. THE DEMAND HAS ALWAYS BEEN THE HIGHEST MINIMUM WAGE CLEARLY HELPS THE EMPLOYEES WHO ARE MAKING IT BUT IT COULD LEAD TO LAYOFFS AND FEWER HOURS. THAT IS THE JUGGLING ACT GOING ON RIGHT NOW AS PEOPLE ARE ADJUSTING. IT’S HITTING RESTAURANTS PARTICULARLY HARD BECAUSE THEY HAVE NARROW PROFIT MARGINS. TIPPED EMPLOYEES IN CALIFORNIA CANNOT MAKE LESS THAN THE MINIMUM WAGE. IN MOST OTHER STATES, THEY K IN MOST OTHER STATES, THEY CAN. RESTAURANT OWNERS SAY THEY DEFINITELY SUPPORT PAYING THEIR WORKERS MORE BUT ARE CONCERNED THE NEW LAW COULD DIG INTO THEIR PROFIT MARGIN AND THAT MAY FORCE THEM TO RAISE PRICES.>>WE CONTINUE TO GO UP AND UP AND UP AND THE CHEESEBURGER THAT WAS $13 TODAY IS $20 IN TWO YEARS, I’M NOT SURE ALL THAT TRANSLATES INTO OUR REVENUE ON A MONTHLY BASIS. WE HAVE TO BE CAREFUL BECAUSE PEOPLE ARE PRICE SENSITIVE. REPORTER: AS I MENTIONED, IT’S A VERY SMALL FOOTPRINT. IN A COUPLE MINUTES’ TIME YOU COULD BE IN OAKLAND OR BERKELEY. CUSTOMERS CAN CHOOSE TO GO ELSEWHERE IF PRICES GO TOO HIGH. THE CITY COUNCIL ORIGINALLY PASSED A PAUSE IN THE HIKE FROM $15 TO $16.30 FOR RESTAURANTS, THEN THEY OVERTURNED THAT. THEY WERE GOING TO GIVE THEM TIME TO ADJUST. THAT’S SINCE BEEN OVERTURNED. AND THE MINIMUM WAGE COULD GO EVEN HIGHER NEXT YEAR. IT’S INDEXED TO THE LOCAL CPI, IF YOU WILL. ONE OWNER TOLD ME HE’S TOO BUSY RUNNING HIS BUSINESS TO KEEP UP WITH THAT. THE LAST THING I WILL SAY, THEY WOULD LIKE A LITTLE HELP FROM THE TAX MAN.

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