Dear State Legislators, Can You Do The Math?

January 12, 2017

Let’s say we have 20 employees (actually we have 22 full and part time employees at this time).
Each time the state increases the minimum wage by $1 and hour, its costs the company $20,000 a year. (20 employees at an average of $1,000 a year per employee.)
Note, the state has already increased the minimum wage by $2.50 in the last three years, costing our company and additional $50,000 a year and this was during the recession.
Without any increase in the number of employees, the state demands that we increase the minimum pay by another $4.50 to $15 an hour. Now there is no way that we would increase the pay of the employee at the lowest wage level in the company without increasing the wage for all the other employees who make more than the minimum wage.
This means by the time we reach the $15 an hour level, our business will have an added $140,000 a year in wage expense.
Our company only had a gross income of $750,000 in 2016, and one third of that was spent on wages. In order to increase the wages by $140,000 the company will have to generate $420,000 more business.
Where does this come from?
One alternative is to mechanize, however, that will actually costs jobs. So how does that benefit our employees? We could raise the prices for our product which is LOCAL NEWS; not something which people are forced to buy, however, it becomes more important as we see the Internet now being faced with Fake News.
The State Legislators, in their wisdom, failed to take into account the different levels of income in different areas of the state. While the $15 an hour minimum wage may not be outrageous in San Francisco, there is a world of difference in the pay scale in Merced and Stanislaus Counties and the big cities of California.
We see as the problem, the State Legislators, in most cases, have not spent one day running a business. If they had, then their solution to increasing wages in California would be different.
Instead of attracting industrial jobs to the state, they force the industries to move out of state so those industries can be competitive.
Big business doesn’t care where it locates. We have seen that in the drift of so many big businesses to build plants overseas or over borders.
What benefits does the State of California offer for doing business in this state?
The problem affects small businesses most, because they are the ones who employ the most people. They are also the ones who will feel the brunt of the increase in minimum wage.
From what we have seen, oftentimes the employer will just put in more hours, himself or herself, to survive. When a business increases the wage and reduces the number of hours their employees work, the net gain for the employees is zero.
For those employers unwilling to make the sacrifice, there is one final alternative and that is shut the door.
Macy’s has shown us how that is done.
Now we ask one more time: “Legislators, Can You Do The Math?”

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