California Minimum Wage Is Going Up And So Will Prices

The California minimum wage is going up making it one of the highest in the nation. The increase means that we'll be paying more at stores and restaurants.

The current minimum wage is $8 an hour it will go up to $9 an hour in July 2014 and then increase to $10 an hour in January 2016.

"Mac's Tire Service" owner Rodney McKinney says whenever the minimum wage goes up he has to increase the prices at his Clovis tire shop. McKinney says he pays his workers more than the California minimum. However, with the increase he'll still have to raise his employees pay.

"This is hard work, so they're going to go someplace else if they can get more money," says McKinney.

Dennis Simonian also pays more than the minimum wage. The owner of "Simonian Farms" says the agriculture industry will be hit hard by the increase.

"Your costs are going to go up and they can't pass that cost onto the consumer, because it's all about perishable items," says Simonian.

Dr. William E. Rice says raising the minimum wage usually has a negative impact on the economy. The Fresno State professor says larger restaurants and stores lay off employees, because they can't afford to pay them.

Rice says raising the minimum wage by $1 is a lot for small business with minimum wage workers to absorb at on time. He says it would be better to do incremental increases by raising the minimum wage by a quarter every few months can help the businesses out.

"When I get a big lump at one time I can't adjust all my prices," adds Dr. Rice, "I can't adjust all my inputs, because people are going to pass costs onto me as well."

Rice says on the plus side raising the minimum wage does help struggling families who are barely getting by on $8 an hour. It also helps college students who often work minimum wage jobs.