On January 1, 2016 the California minimum wage went into effect. For business with 26 or more employees, the new minimum wage is $10.50 with a 50 cent increase occurring on January 1, 2018. The hourly wage increases $1 per year thereafter until 2022 when the minimum wage will reach $15. For companies with less than 26 employees, the $15 wage occurs in 2023.
On January 17th the Campbell City Council heard, what we hope was the last discussion on minimum wage in the city of Campbell. This topic has been debated and reviewed by city staff, council members and business owners in Campbell for the past two years. Although most of the public testimony at the meeting was from the restaurateurs, there was some representation from broad base employers. For most, this issue felt like a forced requirement to pay the $15 hourly wage to unskilled workers and first-time employed workers. For others, the minimum wage issue means yet another bureaucracy to deal with when trying to run a business.
It is getting very expensive to own a business. I personally know employers getting paid less than their employees. Why would they do that? For many with an entrepreneurial spirit, owning a business is a dream. They work hard with hopes that their business will turn a healthy profit over time. According to the Small Business Administration, one of every three small business in the United States fails within the first two years. Bringing it closer to home, in California according to Dunn & Bradstreet, three out of four small businesses will fail in their first two years.
This brings us back to the topic of Campbell’s minimum wage. To have local wage laws for multi-location owners of businesses is an accounting nightmare. As mentioned earlier, California already has a minimum wage law that guides the increase to $15 over a six-year period. This allows companies time to adjust their business plan to accommodate the increase in cost. Many individual cities, such as Campbell, were trying to get a jump-start on the increase, speeding up the state’s timeline to achieve $15 per hour by three years. I understand what they are trying to achieve. The Bay Area is a very expensive place in which to live. Business owners and employers all know this because they live here, too. Most employers in our area will pay more to their workers if they can afford it. They want their employees to be able to live comfortably and to feel like they are compensated for what they do. Businesses don’t need city government to force them to make a choice of paying higher wages to their employees or go out of business.
We the business community, are grateful that the city of Campbell chose NOT to go along with the other six cities in the county to speed up the mandatory minimum wage. This will allow businesses to continue to give youth a chance at earning a wage and experience in the work force while enabling the businesses themselves to grow and hopefully thrive.
Carl San Miguel
Member of the Campbell Chamber Board of Directors