New minimum wage affects Napa workers and employers

2014-07-01T19:45:00Z 2014-07-01T21:50:05Z New minimum wage affects Napa workers and employersJENNIFER HUFFMAN Napa Valley Register

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.

Copyright 2015 Napa Valley Register. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(11) Comments

  1. James Hinton for Congress
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    James Hinton for Congress - July 01, 2014 8:25 pm
    You wouldn't know it from reading this newspaper, but I won the primary for Congress and will face Mike Thompson in the Nov.4th election. My platform- Tax Wall St 1%- simplify the tax code and eliminate red tape on the small businessman- Living wage of at least 4 gallons of gas per hour. Before Mike Thompson got elected a making $6/hr. could buy 5 gallons of gas. Usury has destroyed this economy. The bottom 98% are hurting, meanwhile the 1% have increased their wealth by 4 times. Thanks a lot Mikey.
  2. James Hinton for Congress
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    James Hinton for Congress - July 01, 2014 8:26 pm
    Also part of my platform. Stand with the NRA!
  3. AShannon
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    AShannon - July 01, 2014 9:52 pm
    Most employers aren't rich ... this only helps big corporates as they have better cost structures and unions who take from the government. The little guy loses, as do our youth who get laid off first.
  4. TheNapaOG
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    TheNapaOG - July 02, 2014 7:03 am
    Thompson>Hinton all day! Every day! Twice as much on Election Day! Take your NRA platform to Arizona or Alabama!
  5. Napa62
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    Napa62 - July 02, 2014 8:10 am
    How do you define you won the primary for congress when Mike Thompson had 80.4% of the votes and you had 11.1%?
  6. Madison Jay Hamilton
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    Madison Jay Hamilton - July 02, 2014 10:04 am
    Given current economic conditions, raising the minimum wage will not reduce the number of so-called "entry level jobs" available to workers. Due to the multiplier effect, increased take-home pay of workers will increase spending at local businesses. The only businesses that have an interest in keeping wages very low are those based out-of-town/county/state. Alas, corporate interests too often trump those of locals, and too many uninformed citizens parrot the rhetoric disseminated through mass media. Workers must seek out alternative sources of information and support worker-friendly organizations so that they may be better equipped to function as citizens living in communities they understand and wish to improve. The minimum wage is too low!
  7. Grits56
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    Grits56 - July 02, 2014 11:08 am
    Plenty of California born and bred NRA folks right here.........why should they leave their home simply because you don't agree with them? With the state of things HERE, you appear to look down on other states with your comment - I wouldn't if I were you...I've lived in California for 30 years ( in addition to every corner of this great nation before that, due to my military service), and believe me, there is no reason for those of us here to look down on others anywhere else in America..
  8. corvid
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    corvid - July 02, 2014 1:21 pm
    $10.00 an hour by 2016 wow, how generous!!
    I wonder what a loaf of bread and some peanut butter will cost by 2016? By the current rates of inflation and legal price gouging, it will exceed $10.00 you cannot live a legal, functional life on $1,500 a month! $15.00 an hour is a living wage, and would boost the economy significantly if it were more the norm.
    Low wages are just legal slavery.
  9. Crosscountrykid
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    Crosscountrykid - July 02, 2014 6:41 pm
    I was disappointed with this article. It followed the decades-common template of reporting the facts, then interviewing someone who's against it, citing the usual cliches, and then interview someone's who for it, again citing the conventional platitudes. I've been reading or viewing this style of reporting for decades, from the national news organizations down to the local level. Would have been nice to read some the academic research done on the minimum wage over the years. The NVR can do better.
    Truth is, politics has long ago hijacked the minimum wage issue, almost obviating any real economic discussions. Pundits from both the left and right cherry-pick the partial facts they like to support their respective views. Fact: two locales with the highest minimum wage laws, the SF Bay Area and the State of WA, have some of the highest job growths in the nation. Go figure. Fact: most teenagers who will benefit come from solid middle class homes, not poverty. Go figure.
    Eric Vaughan
  10. NapaMark15
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    NapaMark15 - July 02, 2014 8:42 pm

    And you decided that $15/hr was a living wage how exactly?
  11. ValleySwag
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    ValleySwag - July 03, 2014 2:13 am
    In 2012 the minimum wage was $8 and the living wage for Napa county was $11.25 according to this study from MIT. -
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