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Some say increasing minimum wage could result in loss of jobs, closure of businesses

“It has a ripple effect, it's not just raising one number and that's it.“
Posted at 11:02 PM, Feb 24, 2021
and last updated 2021-02-25 17:25:46-05

BAKERSFIELD, Calif. — The current federal minimum wage is $7.25, here in California it’s $14.00 an hour, meanwhile, president Biden is pushing for $15.00 an hour, this comes as many people have to work multiple jobs to pay their bills under the current federal minimum wage, but others say that increasing it would result in a loss of jobs and businesses.

"On the surface, you'd go well you give people more money an hour, they're gonna have more money, that's going to help them in life, we're all better off for it. If it were that simple that would be great.”

However, it's much more complex than that according to financial advisor Dave Anderson, who is also the co-owner of Moneywise Wealth Management in Bakersfield.

“It has a ripple effect, it's not just raising one number and that's it.“

Anderson says a minimum wage increase would likely result in a loss of jobs and businesses.

“You raise that wage up that impacts taxes, anytime you're increasing the cost of something, that's going to be felt throughout the economy.“

But a lot of Democrats have been in favor of a minimum wage hike in addition to president Biden.

“The notion that we have people working for $7.25 an hour, which is the current federal minimum wage is egregious,” said Rep. Hakeem Jeffries.

California Governor Gavin Newsom has also tweeted previously in support of a minimum wage hike, and former assembly candidate Julie Solis tweeted Wednesday saying “interesting that no one ever talks about how McDonald's CEO making $8,653 an hour will drive up the price of a burger and fries."

But other restaurant owners feel differently.

“It's very frustrating, it's going to hurt the business it's going to slow things down.”

Michael Earhart owner of Tiki’s in southwest Bakersfield says he would feel that impact.

He says that in turn his employees would also be affected, as he would have to raise his prices to keep up with inflation, which would force him to make some cuts around the restaurant to offset the costs.

“Everybody's gonna raise prices. That check that's $50 that's going up to $60, nobody's gonna make more money on the deal, its basic economics.”

While the federal minimum wage is $7.25, that number would more than double for some businesses with the new proposal, and while California would only see a $1 increase an hour, Earhart says it adds up.

“If you look at the amount that dollar makes, cause I mean you pay the servers more you pay everybody more, it runs about $400-$4,500 a month that I have to offset.”

$15.00 an hour isn't the only amount being considered at this point; this week Republican senators have put forth a smaller minimum wage plan of $10 an hour.