The true cost of California’s minimum wage hikes

California has been on a minimum wage hike tear.  The Golden State's minimum wage has risen by 29% since 2007.  By 2022, just 4.5 years from now, the minimum wage will skyrocket to $15/hr., an additional 30% increase from its current rate, or exactly double its 2007 rate!

Since my company is levered to low-end pay scales, that means my gross labor expenditures will have doubled in that short amount of time.  Meanwhile, sales certainly have not, nor do I expect they will.

So where exactly will the difference be made up?

Why, on the most productive, of course!  Since minimum wage hikes are essentially a tax on the productive, that means they come out of everyone else's pocket who is not at minimum wage level.

At every payroll, just before I submit, I briefly audit the checks to make sure there are no mistakes.  While glancing across the screen again this week, I was reminded of this sad truth.  As wages have eroded profitability, our company has been forced to stagnate wages for everyone else.  Everyone slightly above minimum wage has been on hold for any wage advancements.  The only time they now receive a wage increase isn't because they're doing a good job; rather, it's when the state annually raises rates again.  We don't reward productivity any longer.  We can't afford to.  

Even more perversely, the owners, myself included, have been forced to take massive wage reductions.  We have given ourselves all very expensive haircuts.  Not a small trim, either.  I hear bald is in these days.  

Even more perverse than this, we have had to pull credit cards.  And worse than that, we have had to go into our retirement accounts and borrow on our 401(k)s.  Our homes are already leveraged out to the maximum.  We are subsidizing with our life's savings the state's crazy ideas of how the economy is supposed to work.  For them, it's easy.  They just pass a law and then go home and congratulate themselves on what a fine job they did.  The rest of us, as consumers and business owners, are looking for a way to escape.

This is no hyperbole.  We are, in fact, looking – right now – for just that.  A way to escape, for good, at least from California, permanently.  

I would suggest, if you live here in California, and choose to remain here, you write your senators and send this article to them.  I already have many times.  It doesn't appear to do much good, but at least you can, in the end, tell them you told them so.

California has been on a minimum wage hike tear.  The Golden State's minimum wage has risen by 29% since 2007.  By 2022, just 4.5 years from now, the minimum wage will skyrocket to $15/hr., an additional 30% increase from its current rate, or exactly double its 2007 rate!

Since my company is levered to low-end pay scales, that means my gross labor expenditures will have doubled in that short amount of time.  Meanwhile, sales certainly have not, nor do I expect they will.

So where exactly will the difference be made up?

Why, on the most productive, of course!  Since minimum wage hikes are essentially a tax on the productive, that means they come out of everyone else's pocket who is not at minimum wage level.

At every payroll, just before I submit, I briefly audit the checks to make sure there are no mistakes.  While glancing across the screen again this week, I was reminded of this sad truth.  As wages have eroded profitability, our company has been forced to stagnate wages for everyone else.  Everyone slightly above minimum wage has been on hold for any wage advancements.  The only time they now receive a wage increase isn't because they're doing a good job; rather, it's when the state annually raises rates again.  We don't reward productivity any longer.  We can't afford to.  

Even more perversely, the owners, myself included, have been forced to take massive wage reductions.  We have given ourselves all very expensive haircuts.  Not a small trim, either.  I hear bald is in these days.  

Even more perverse than this, we have had to pull credit cards.  And worse than that, we have had to go into our retirement accounts and borrow on our 401(k)s.  Our homes are already leveraged out to the maximum.  We are subsidizing with our life's savings the state's crazy ideas of how the economy is supposed to work.  For them, it's easy.  They just pass a law and then go home and congratulate themselves on what a fine job they did.  The rest of us, as consumers and business owners, are looking for a way to escape.

This is no hyperbole.  We are, in fact, looking – right now – for just that.  A way to escape, for good, at least from California, permanently.  

I would suggest, if you live here in California, and choose to remain here, you write your senators and send this article to them.  I already have many times.  It doesn't appear to do much good, but at least you can, in the end, tell them you told them so.