“Nine dollars is a tough pill to swallow for businesses that are facing unprecedented cost pressures from every direction,” CRA President + CEO Jot Condie said. “Considering another local wage hike in the midst of California’s record setting two-year phase-in is irresponsible and shows a complete lack of appreciation for those who are providing jobs and trying to keep the business running. Most elected officials who’ve signed the front of a paycheck would understand this.”
Many tipped employees earn substantially more than the state minimum wage. The state should join 43 other states to recognize this fact by establishing a tipped wage structure that never dips below the state’s existing minimum wage, but focuses future minimum wage increases on non-tipped employees – the intended beneficiaries of a wage hike. The federal government - including proposals supported by President Obama - the Internal Revenue Service, the Social Security Administration and 43 other states in the nation consider tips as part of an employee’s income.
Compounding the wage hike, restaurants also are facing major cost increases in the shape of:
- higher commodity prices across the board, due to the drought and other factors
- Affordable Care Act employer requirement enforcement deadline Jan. 1, 2015
- higher taxes under Proposition 30
- escalating worker’s compensation rates
- ncreased federal unemployment insurance taxes.
Drastic increases in the minimum wage will ensure that fewer workers will find entry-level jobs – a problem so massive nationally that Hillary Clinton last week launched the Job One initiative compelling corporations to recruit young people ages 16 to 24 into their first jobs.
About the California Restaurant Association: The California Restaurant Association is the definitive voice of the California restaurant and hospitality industry and has served to protect and promote its success since 1906. The restaurant industry is one of the largest private employers in California, representing more than 1.4 million jobs. Restaurants produce more than $58 billion in sales annually and generate more than $4.5 billion in sales tax for the state.