California raises the minimum wage

Photo courtesy Sac Biz Journal via iStock

California’s minimum wage debate ramped up quickly last month.  As municipalities across the state were taking a closer look at raising the wage locally, legislators struck a deal with the governor to raise the statewide minimum wage to $15 an hour by 2022. Signed into law on April 4, 2016, increases will begin Jan. 1, 2017 with a raise to $10.50 an hour, then $11 an hour in 2018 and followed by annual $1 an hour increases until 2022. Businesses with 25 or fewer employees would have an extra year to comply and the governor could delay increases in times of budgetary or economic downturns.

California is the first state to adopt a statewide $15 an hour minimum wage – an 87 percent increase since January 2016. How will this significant spike in the minimum wage affect downtown businesses?

DSP shares concerns expressed by the California Downtown Association, this legislation could have serious and counterproductive consequences. While it is intriguing to think that raising the minimum wage can have a large upside with little negative impact, the reality is raising the minimum wage threatens to undermine the vitality of our small businesses. Looking ahead, we will continue to work with the business community to keep you informed.