Merced business owner David Murtos quickly piled pickles onto a pastrami sandwich Friday afternoon, working shoulder to shoulder with his employees to keep up with the lunch crowd.
The only thing worrying Murtos was news of the state’s plan to increase the minimum wage.
California's minimum wage would rise to $10 an hour within three years under a bill passed Thursday by the state Legislature, making it one of the highest rates in the nation. Gov. Jerry Brown indicated earlier this week that he would sign the bill, calling it an overdue piece of legislation that would help working-class families.
Opponents, however, say businesses would suffer because owners also face voter-approved increases in sales and income taxes, and because of the uncertain costs of the federal Affordable Care Act.
“Of course it’s going to be harder and more challenging,” said Murtos, a franchisee of Port of Subs on East Yosemite Avenue. “It’s already hard running a small business in California with everyone in government from the local level to the federal sticking their hands in the pockets of small business owners.”
Robert Morris, director of the Merced County Workforce Investment program, sees the issue differently. Morris said the additional cash would assist workers struggling to make ends meet. “It would absolutely help people in the Central Valley with the basics, like food, housing and transportation,” Morris said.
Some small business owners such as Murtos also worry the pay boost would have unintended and costly ripple effects. “I already try not to keep my people at minimum wage, but $10 is a big jump from $8 and it means bumping up managers and others, too,” he said.
Murtos, who employs up to eight people at times, does not believe he will resort to layoffs, but said he may have to cut hours for some employees. “It probably means I’ll end up working more myself, coming in earlier and staying longer, but, either way, something’s going to have to give,” Murtos said. “I understand it’s hard living on minimum wage, but it would be nice for small business owners to get a little tax relief, too.”
Kevin McCarthy, owner of Kevin’s Bikes in Merced, said he too may also have to occasionally cut hours for some employees but that he was not overly concerned with the wage hike. “We’re talking, what, an extra $16 a day for an eight-hour day?” McCarthy said. “If you have employees you don’t think are worth that, then maybe you shouldn’t have those employees.”
A $10 minimum wage would increase earnings for a projected 2 million Californians by $4,000 a year and put $2.6 billion into the economy, Assembly Speaker John Pérez, D-Los Angeles, estimated in a statement supporting the increase.
Assemblyman Adam Gray, D-Merced, supported the wage increase, but Sen. Anthony Canella, R-Ceres, voted against the legislation, according to the Office of Legislative Counsel.
In a prepared statement, Gray said he initially opposed the bill because early drafts called for automatic annual increases in unspecified amounts. Gray supported the final version, he said, because it calls for specific increases in 2014 and 2016.
“This gives our lowest paid workers a pay raise while at the same time giving businesses clarity and certainty on what pay levels will be over the next (three) years,” Gray said in the statement.
Canella’s office did not return a phone call Friday seeking comment.
Merced’s Steven McGuire, 40, said the proposed raise would not affect him and doubted it would make much of a difference for anybody.
“With the cost of renting an apartment and of just living always going up it would be nice to see it go up more, maybe to $12,” McGuire said. “But with all the politics going on it’s hard to know if even that would help anybody. I guess we’ll just have to see what happens next.”