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California to Adopt a $15 State Minimum Wage? Restaurants Feel Pressure to Trim Staff

flickr/Clotee Allochuku

Lawmakers in California have reached a tentative agreement to raise the state minimum wage from $13.32 (US$10) to $19.98 (US$15) an hour by 2022. California legislators and labour unions’ move would make for the largest statewide minimum wage in the country till now.

If the deal is approved, California would become the first state to adopt a $19.98 per hour minimum wage.

Sen. Mark Leno, D-San Francisco said, “This is not a done deal. Everyone’s been operating in good faith and we hope to get it through the Legislature.”

Under the tentative agreement, the wage will increase incrementally over the next six years.  Small businesses would be given an extra year to comply with the agreement. The announcement of the deal will be on Monday. Notably, the wage was raised to $13.32 an hour on January 1, reported The New York Times.

Supporters of higher wages cheered the California legislation calling it a major victory. Paul K. Sonn, the general counsel to the National Employment Law Project, commented, “This is a very big deal. It would mean a raise for one of every three workers in the state.”

The deal has gained some footing in several other cities including San Francisco, Seattle and Los Angeles. In Washington, the mayor proposed a plan to raise the minimum wage to $19.98 by 2020. The Governor of New York Andrew Cuomo is fighting for $19.98 minimum wage in New York City. Oregano, on the other hand, approved a new legislature this month which will raise the state wage to nearly $19.98 in urban areas over 6 years, reported The Seattle Times.

However, some companies in the service industry have expressed concern over the agreement. They argued that raising the minimum wage would mean an increase in the expenses for employers.  They would then be forced to increase their prices. Some workers also said that this could lead to fewer customer and lower tips.

Michelle Mellon, a server at Du-Par’s Restaurant in Studio City said, “I think it would be detrimental to the serving business if it was adopted statewide.”

He added, “People rely on their tips a lot, probably more so than their checks.”

Some business owners fear that the wage increase would hurt bottom lines as reported by Los Angeles Times.

Selwyn Yosslowitz, president of the Marmalade Café, said, “First, you have to raise prices, otherwise you’ll be out of business.”

He further stated, “We will try to re-engineer the labour force. Maybe try to reduce the number of busboys and ask servers to bus tables.”

Last month, New Zealand announced a similar wage raise in the country.

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