The minimum wage in California is supposed to increase to 50¢ by January 1st, 2018. The ultimate goal is to reach $15 an hour by 2023. While this is good news, it can also decrease job availability. Some small businesses are already planning to charge customers more and layoff many employees. These are some hard decisions to make but the only solution for businesses that are struggling. Recent studies by the Employment Policy Institute suggest that by 2020 California’s workforce will shrink significantly.
The minimum wage is a controversial topic among economists. Increasing the federal minimum wage will definitely help reduce poverty among many American families and lower the use of public assistance. It also encourages consumer spending, which can boost the economy as well as the standard of living. According to evidence gathered from other nations, when minimum wages are increased, the economy improves significantly.
By January 1, 2018, about 18 states will raise their minimum wage. This is good news for many low-income families who struggle to make ends meet. Many families across the nation complain that they can’t save money. Between paying bills, doctor visits, and other responsibilities, it is difficult to stay afloat when your finances are drowning. By 2022, California, New York, and many other cities will increase their minimum wage to $15.
A lot of academic research proves that raising income will not result in job losses. Raising the minimum only affects workers in some specific jobs and positions. According to some recent analysis, the majority of the states raising the minimum wage actually saw an increase in job availability. So if unemployment rates decline why not increase the minimum rate?
Some small businesses simply can’t afford to pay their employees more so they may close and lay off employees, which means fewer job opportunities. This is particularly difficult for workers without sufficient skills or experience, who may struggle in today’s competitive job market. Some reports by Forbes show that the increase of minimum wage has actually led to the closing of many stores, including Walmart.
Since young people make over 50% of minimum wage workers, they are probably going to be affected by the new changes. In other words, teenage employment may be lower.
Countless workers throughout California rely on a decent wage to get by. If you have not been paid your wages, you can discuss your legal options with an attorney and recover lost income. For a free consultation, contact us today and schedule an initial case evaluation with a Sherman Oaks wage and hour lawyer.