Minimum Wage Hikes Have Businesses Raising Prices

The minimum wage in California will increase to $9 an hour next week

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    NEWSLETTERS

    California's minimum wage increase to $9 an hour has some employers saying they'll lose business with an increased cost of labor causing them to hike up their prices. Vikki Vargas reports for NBC4 News at 5 p.m. from Orange County Thursday, June 26, 2014. (Published Thursday, Jun 26, 2014)

    While workers across California will soon get a wage hike when the new minimum wage kicks in, businesses are worried they’ll lose customers to price increases.

    Alejandro Enciso works two jobs, 40 hours a week as a janitor and 20 more hours a week cleaning carpets, to support his family.

    When the statewide minimum wage increase takes effect July 1, part of Enciso's pay will go up from $8 to $9 an hour. It will be the first time California's minimum wage has gone up in six years.

    But Enciso's boss Tom Myers, of Myers Building Service in Tustin, said that with 50 employees, the wage hike adds up. Myers plans to charge his customers more to make up for it.

    "We want the janitors to be paid fair wages and they deserve the $9 an hour," Myers said. "But the fact is we have to pass it on and we just live with it."

    NBC4 learned about this trickle-down cost upon receiving a notice from Myers that the charge to clean NBC4's Orange County bureau would be going up from $304 a month to $330. Myers said he is worried he will lose customers.

    Business owners who pay the new minimum wage are concerned for the future -- the minimum wage is set to go up to $10 an hour in 2016.

    Steve Bridge, manager of part-restaurant, part-vitamin store Ivy's Bridge to Health, pays his workers $9 an hour now.

    "If it was mandated higher, we would have to cut back because labor costs a lot," Bridge said.

    Waitress Viridiana Lopez said things are getting expensive, and every dollar makes a difference.

    "Sometimes when you get $8 an hour, it's not enough," she said.

    California is one of 23 states, including the Washington D.C., to have a higher minimum wages than the federal standard of $7.25 an hour.

    Washington state has the country's highest state requirement at $9.32 an hour, but San Francisco has the country's highest minimum wage, $10.74 an hour.

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