AB 10 (Alejo) proposes to raise the minimum wage to $10 – or a $2 increase over 18 months. This would be the largest increase in the history of the California minimum wage.
“The state mandating a 25% pay increase over an 18-month period is a back breaker for many in our industry,” CRA President + CEO Jot Condie said. “Contrast that to the state negotiating with its largest union a 4.5% increase over three years that the Governor called ‘a fair proposal.’ The private sector is no different. Given the economics in our industry, where restaurants operate at very thin profit margins, a 25% increase in labor costs will result in fewer job opportunities for Californians looking to get back on their feet.”
In the restaurant industry, the minimum wage is a starting point. The vast majority of workers earning minimum wage are either teenagers or servers who earn tips on top of the minimum wage. According to the Bureau of Labor Statistics, 46% of restaurant workers are younger than age 20, and 80% of restaurant minimum-wage employees work part time. A 25% increase in the minimum wage ensures that fewer workers will find entry-level jobs.
The California economy continues to languish, with the largest number of unemployed adults in the nation. Businesses also are in the midst of preparing for immense cost increases that come with implementation of the Affordable Care Act, compounding the fact that 2014-2015 is the most inopportune time for the state to mandate additional massive labor cost increases.