Last week, California Governor Jerry Brown signed a bill that will increase the statewide minimum wage to $15 per hour by 2022. I reached out to a few California operators to see how this would affect them and was surprised to hear how varied their answers were.
One operator located near San Diego expressed that he was concerned that the increase could mean companies may leave California, resulting in him losing customers. And, he continued that with an entry level employee making $15 per hour he will need to increase salaries across the board.
A second operator located near Los Angeles, however, wasn’t as concerned, and expressed that he didn’t anticipate any impact on his business or customer base; that the state legislature was, in fact, just trying to catch the state up with other larger cities that had already passed minimum wage bills.
Both operators agreed that with the gradual introduction of the increased wage, most businesses would be able to plan for any impact.
The editorial staff at VendingMarketWatch.com has always looked closely at minimum wages across the board, because minimum wage affects those who own and operate a business (small or large). But we began asking ourselves, “Should we care about minimum wage increases?”
What it means for operators
Minimum wage increases seem to be happening everywhere these days. In fact, the federal minimum wage of $7.25 per hour, which has been in effect since 2009, has come under fire in recent years for being low; 29 states plus D.C. have set their minimum wage above the federal level. Not to mention the countless cities across the U.S. that have taken it upon themselves to raise the minimum wage. Efforts to increase the federal minimum wage have stalled repeatedly throughout the years.
On the surface of the national debate are, those in favor of increasing the minimum wage argue that the federal minimum wage is at the threshold of poverty for a single person and is far from being adjusted for inflation. The arguments against raising the minimum wage include a potential loss of jobs and negative impact on small businesses who have a harder time absorbing costs.
Minimum wage increases, either statewide or federally, will affect those in the vending, OCS and micro market business, whether your company is an advocate for or against increases. A higher minimum wage means a few things, including increasing prices and the cost of service. Luckily, as the California operators noted, many minimum wage increases are incremental and will allow operators to plan ahead. Some also give smaller businesses with fewer employees a longer time period to meet the laws.
As more states and cities take the issue of increasing minimum wage into their own hands, operators will be tasked with responding and acting on this issue. Is it something you are prepared for? Will it affect your business? Let me know via email at [email protected] or send me a tweet @VMW_Zimmer.
Adrienne Klein | Contributing Editor
Adrienne Zimmer Klein is a freelance writer with a background in the vending, micro market and office coffee service industry. She worked as an associate editor and managing editor at Automatic Merchandiser and VendingMarketWatch.com from 2013 until 2017. She is a regular contributing writer at Automatic Merchandiser.
