Posted on July 7th, 2022
Find below a complete transcript of this video
What’s up fellow entrepreneurs today. I want to talk about an $18 per hour minimum wage. But first I’m an attorney, but I’m not your attorney.
So please seek out competent legal advice for your specific legal needs. So after years of navigating California’s jungle of labor regulation, an $18 minimum wage would be kicking companies while they’re down.
California became the first date to reach a $15 minimum wage this year. But even before hitting that mark a ballot measure was already filed to raise it again to $18 an hour and keep raising it annually without having to consult voters.
This isn’t just political. It’s personal for so many businesses that will get slammed by this on top of California’s constantly changing labor laws.
In addition to the highest state minimum wage, the golden state notoriously has one of the most complex labor codes in the country. Regulations ranging from break documentation, bathroom signs and temperature controls.
Keep employers stuck focusing on a 1100 page labor law digest instead of plans to grow the business such complex regulations come with their own costs.
Employers are required to pay into various funds based on the number of employees they have and the levies increase every year. So for example, every employer pays an occupational safety and health fund surcharge based on employees compensation.
And the rate went up more than 255 this year, compared to last January, another fee for labor enforcement and compliance soared by 212%. This year as a minimum wage wages have increased every year. The dollar amount employers owe in regulatory fees has skyrocketed.
The cost keeps stacking up and now another wage hike is on their horizon with each increase. The financial risk of keeping current employees or hiring new people is rising too. The situation is so dire companies headquartered in California have been increasingly fleeing the state in recent years.
The Hoover institution documented twice as many companies on average left every month in 2021. Then in the year prior while this is a herring indicator of the increasingly toxic business environment, California has created it bodes even worse for companies that are forced to stay as operation costs ramp up on all sides.
An $18 an hour wage mandate would be yet another gut punch businesses will be forced to adapt their bottom lines to stay in operation. Increasing auto automat automation is one solution to make a onetime investment technology to consolidate duties done by several hourly paid employees.
But California’s past increases have already forced a shift to automation and many can’t afford to do much more.
The other alternative is to reduce the number of positions, a business offers by slowing down hiring or the number of hours or jobs they currently have at a plant. For example, in recent months, we’ve seen how important it is to have products made here rather than somewhere where a shipping jam or a war can disrupt supply.
But California is pricing its workers out of jobs to put out an ideal number and require all businesses to pay up. May sound good in theory, but activists fail to consider the rising tides businesses are facing.
Pushing the minimum wage even higher could be the final straw that puts California businesses underwater.
Unfortunately there’s no end to this.
Until next time, be productive.
