In June yet another “job killer” bill advanced in the legislature. John Kabateck, Executive Director for California’s chapter of the National Federation of Independent Businesses (NFIB) summed it up best when he said, “Small-business owners at a minimum get a double-whammy on January 1st”. Kabateck is referring to Assembly Bill 10 (Alejo; D-Salinas) which imposes an automatic $2 increase in minimum wage over the next five years. This means that by 2018 the minimum wage will rest at $10 per hour.
While seemingly innocuous, this bill has far-reaching implications for California employers and job seekers by increasing business costs regardless of other mitigating factors such as inflation, the Affordable Care Act, and other tax increases approved under Proposition 30. This large and indiscriminate increase does not accurately reflect the current economic situation our state faces.
With California’s 8.6% unemployment rate and slowly recovering economy, passage of this bill could mean significant job loss and higher prices for consumers. Opponents of this bill cite a study conducted by the NFIB which estimates that enacting this bill could result in 46,000 to 68,000 lost jobs in California by 2023 and a reduction in real output between $4.7-5.7 billion.
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In order to better care for those most economically vulnerable in California, we must have strong businesses that can support a larger workforce, not businesses stymied by ever-increasing costs. This issue has been similarly raised by five proposed bills in recent years. While four of those proposals were shot-down, Assembly Bill 1835 passed in 2006 which increased minimum wage to our current rate of $8.00 per hour. It certainly has not helped our economy. The decision to improve the Californian economy does not and cannot begin with the decision to harm the businesses that fuel the fire of development.
