New year brings minimum wage hike for Tulare County workers

For thousands of Central Valley workers, their first 2018 paycheck will see a much-anticipated increase. 

As of Jan.1, California’s minimum wage for businesses with more than 26 employees increased by $0.50 to $11 per hour. The increase is reflective of 2016 legislation that increases the state's minimum wage by $1 a year until it reaches $15 an hour by 2022. 

For businesses with 25 employees or less, minimum wage will increase to $10.50 per hour. 

"This is about economic justice, it's about people," said California Governor Edmund G. Brown after signing the legislation in April 2016. "This is an important day, it's not the end of the struggle but it's a very important step forward."

Now, two years later, local businesses are dealing with the increase head-on. 

"The minimum wage increase is tough. For a lot of local businesses, it's a double-edged sword," said Gail Zurek, Visalia Chamber of Commerce CEO. "It's difficult for business owners to step forward and say they don't want to [increase] the minimum wage."

Most business owners want to invest in their employees, but some cannot afford it, Zurek said.

"There's this popular notion that business owners have a lot of spending income and are living life in this luxury fairy tale," she added. "Most business owners have to make tough decisions every day about where they invest. They work extremely hard to keep their business open."

As a result, consumers may begin to see an increase in the prices.

"The reality is some businesses have to increase the price of their goods or services," Zurek said. "Not everyone can afford to pay for a hamburger going from $3 to $4. It reduces our ability of choice as consumers."

Businesses aren't the only ones feeling the sting. Local nonprofit organizations must also adapt to the increase, Zurek said. 

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"Nonprofits are unduly hit," she said. "They're reliant on donations and grants. Those dollars haven't increased just because minimum wage has." 

Because of the increase, Visalia Rescue Mission will see a $300,000 - $400,000 deficit in 2018, said Executive Director Al Oliver. 

"The minimum wage increase for businesses is a matter of raising prices," Oliver said. "For us, we're not a business, we can't raise our prices — we don't sell anything. Quite frankly, I'm not sure what we're going to do."

Oliver called the increase a "vicious cycle."

"When the state passed it, they were not thinking of nonprofits at all," he added. "We have to go out and raise additional funds not to do anything new but to be able to continue the services we're already offering."

California is one of 21 states raising the minimum wage in the new year. 

Proponents say the initiatives can help narrow a widening income gap between the wealthy and poor. Business advocates say they’re already leading to restaurant closings and layoffs.

The pay hikes have been linked, at least in part, to nationwide fast-food worker demonstrations and demands for a $15 wage since 2012. Those pleas were initially deemed far-fetched. But now California, New York and more than a dozen cities are moving toward that standard by 2022 in a wave that will cover one in five U.S. workers.

The Employment Policies Institute, using California employment data from 1990 to the present, estimates that a 10 percent increase in minimum wage would lead to a 4.5 percent reduction in employment in a sector in which half of its workers earn low wages. 

The institute’s study concludes that 400,000 jobs would be lost by 2022 when minimum wage lands at $15 an hour.

"Our fear is with more regulations, businesses will say it's cheaper to work for someone else or, worse for us, leave the state," Zurek said. "We want everyone to have a living wage, but what that looks like in Tulare County is different from what that looks like in Sacramento, San Fransisco and Los Angeles. Unfortunately, the state views it from those standpoints. We do things differently in Tulare County."

In Tulare County, unemployment rates teetered between eight and 12 percent throughout 2017, according to the United States Department of Labor Bureau of Labor Statistics. The most recent data, available for October, shows the county’s unemployment rate at 9.4 percent, down from the year’s high of 12.5 percent in January 2017. 

In 2016, Tulare County had one of the highest unemployment rate in the state — 11 percent — coming in second only after Colusa County at 15.5 percent. 

To help facilitate a decrease in the county's unemployment rate in 2018, Visalia Economic Development Corporation will hold a job fair from 8 to 11 a.m. on Tuesday at Fresno Pacific University. 

Participating employers include County of Tulare, VWR, Fresno Pacific University, VF, Electric Motor Shop, Visalia Ceramic Tile, Seals Construction, Jostens, the Visalia Marriott, USA Staffing and California Water.

“The Visalia Economic Development Corporation launched its first job fair in April 2017. It was a success, so we now plan to offer job fairs twice a year – once in the winter and once in the summer," said Carlos Garcia, executive director. "Our mission to help employers find quality staff members is part of the VEDC's focus on employer retention. We are hopeful that these job fairs will allow the unemployed and underemployed find work, and strengthen our local economy.”

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