January 19, 2016
The CRA Joins A Broad Coalition Opposing Drastic Minimum Wage Hike Measure
(Sacramento, CA) – Today, the California Restaurant Association joins a broad coalition of parents, seniors, farmers and small business owners in opposing SEIU-UHW’s dramatic minimum wage increase initiative.
In 2008 California's minimum wage went up to $8 per hour. It rose again to $9 per hour in July 2014 and increased to $10 per hour in January 2016. As proposed by SEIU-UHW, The Fair Wage Act of 2016 would implement yet another raise to $15 by 2021 and mandates that wages be automatically adjusted with inflation each following year. This initiative would signify a 180 percent increase in the minimum wage, and would create far-reaching consequences for communities throughout the state.
“While we know voters support some increase, this proposal to nearly double the minimum wage goes too far,” said Jot Condie, President and CEO of the California Restaurant Association. “Not only does it threaten small family-run businesses like restaurants, it will also have devastating impacts to education, seniors, services for the disabled, working families and more.”
While unveiling his 2016-17 spending plan, Governor Brown recently warned reporters that a minimum wage increase to $15 would deliver a devastating blow to California by creating additional costs to the state totaling $4 billion annually by 2021. “Raise the minimum wage too much and you put a lot of poor people out of work,” said Brown. “There won’t be a lot of jobs. It’s a matter of balance.”
A proposal of this magnitude would create unintended consequences for the very workers it seeks to help. A recent study found that less than one in four dollars from a minimum wage increase actually benefits low income households, and that blanket minimum wage increases have little impact, if any, on poverty. Not only would this initiative provide less opportunity at increased costs, it would also create sweeping financial burden for those who need the most help, such as seniors living on fixed incomes, working families, disabled Californians who must pay for care, and many other communities.
This abrupt wage increase would also deliver an overwhelming blow to small family-run businesses like restaurants, the majority of which are woman and minority owned. These businesses are still adjusting to the latest wage increase and the costs that are associated with it, including costs in taxes, benefits and insurance. It also leaves small business to face undesirable options in an effort to keep business running, such as cutting hours, raising prices, automation and laying off staff.
“Small businesses want to fight for their employees, not against them,” said Condie. “Ensuring that wage increases are slow, steady and predictable will help California’s economy, jobs and small businesses survive. This minimum wage proposal is not going to solve the core problems it seeks to address - it is too much, too soon, with too many consequences.” There needs to be a balance between the needs of workers and sustainability of California's small, main-street business.
About the California Restaurant Association: The California Restaurant Association provides ultimate access to the resources and support restaurant professionals need to lead thriving businesses, while serving as conscientious, contributing members of an unparalleled industry. California is home to more than 90,000 eating and drinking places that ring up more than $72 billion in sales and employ more than 1.6 million workers, making restaurants an indisputable driving force in the state’s economy.