Will a $15.50 minimum wage hurt or help California's economy?

Phillip Molnar, The San Diego Union-Tribune on

Published in Business News

California's minimum wage is likely to rise to $15.50 an hour in January because of inflation, said Gov. Gavin Newsom on Thursday.

Some business leaders have argued they are struggling with rising costs and can't handle another 50 cents an hour. Worker advocates say the increase is needed to combat rising prices. Other advocates argue the increase isn't enough.

The change — the result of a 2016 law signed by then-Gov. Jerry Brown — requires that any inflation growth above 7 percent triggers an even higher minimum wage.

The minimum wage was set to increase to $15 an hour for all employers in January 2023. Today, the minimum wage is $15 per hour for companies with 25 or more workers and $14 per hour for companies with 25 or fewer employees.

Q: Will a $15.50 minimum wage hurt or help California's economy?

Chris Van Gorder, Scripps Health


HELP: Maybe. Rising wages contribute to higher inflation and higher inflation drives higher wages in times of full employment. The Fed is trying to manage this by raising interest rates to tame inflation while maintaining a low unemployment level. If the Fed is successful, the increase in minimum wage should help. But, if it's not, California and the rest of the country will be faced with either a recession or runaway inflation.

Jamie Moraga, IntelliSolutions

HURT: Any additional costs that small businesses must incur come from an already strained bottom line. As a result, small business must reduce costs in other areas (layoffs or automation) or pass on the increased costs to consumers for goods and services. Small-business owners are still trying to recover from the economic effects of the pandemic as well as supply chain issues, rising inflation, and labor shortages. Increasing labor costs could mean that some small businesses may either decide to close their doors or move to a more business-friendly state.

David Ely, San Diego State University


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