Napa County workers who earn minimum wage got good news on Tuesday. The state’s minimum wage rose to $9 an hour, the first such increase since the recession hit in 2008.
That amount will increase again to $10 an hour starting on Jan. 1, 2016, under Assembly Bill 10 (AB10), which Gov. Jerry Brown signed into law last fall.
“This first modest increase will help put more money in the pockets of hardworking Californians to provide food, clothes and housing for their families,” Assemblyman Luis Alejo, D-Salinas, said in a statement.
The increase may be a benefit to workers but employers face higher labor costs as a result.
“It’s a double-edged sword,” said Robert Eyler, professor of economics and director of the Center for Regional Economic Analysis at Sonoma State University.
“You might see a situation where certain employers already on the margin will cut some folks loose because of the immediate higher costs,” said Eyler. Such a raise can affect the number of people hired at minimum wage, he said.
Other employers are able to absorb the wage increase but “that bites into the margin,” he said. Some can pass along the increase to the customer, for example, in the form of higher restaurant meal prices or increased hotel room rates, he said.
However, “My guess is the average wage in Napa is already higher than (minimum wage) to retain workers,” he said. However, “There could be a small impact on Napa employment,” said Eyler, particularly for hospitality and restaurant workers making minimum wage.
Jim Mahoney, business development manager at Bolt Staffing in American Canyon, likened the wage increase to “a case of the rising tide lifting all boats. If the minimum wage goes up $1, eventually everyone will see their wages adjust appropriately,” he predicted.
At the same time, the increase could hurt entry-level employees or others facing hiring hurdles such as language skills, said Mahoney. “The people that need work the most need those minimum wage jobs to get going. They are the ones that get hurt.”
In addition, “If the employee doesn’t bring more value than cost, either we find better employees or we find a way to automate the job or we eliminate the job altogether,” he said.
The wage increase can cause employers to rethink positions or reshuffle the tasks. “It’s just economics,” he said. “That’s the unfortunate part of it.”
Mahoney said he thought the increase could affect Napa County’s employment rate. But because the economy is on an upswing, the impact might not be noticed.
California’s minimum wage increase comes amid a national debate about low-wage workers who have seen their purchasing power decline in recent years.
President Barack Obama has pushed Congress to raise the federal minimum wage to $10.10 an hour, but the proposal hasn’t gained much traction. Instead, he has encouraged cities and states to raise those wages on their own.
New York City, Chicago, San Francisco and Oklahoma City are among the municipalities debating minimum wage increases. In early June, the Seattle City Council voted to raise the minimum wage within the city to $15 an hour, starting next April and phasing in over several years.
Currently, the highest minimum wage in the country is in SeaTac, a Washington state town of about 25,000 that is home to Seattle-Tacoma International Airport. The $15-an-hour minimum wage approved by voters took effect in January for workers at major hotels and parking lots, and the state Supreme Court will decide whether it also applies to workers at the airport, which is run by a separate authority.
Washington has the highest minimum wage of any state at $9.32 an hour.
In California, a bill that would have raised the state’s minimum wage even higher and tied it to inflation failed in the Legislature this year.
The AP contributed to this story.