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Is a higher minimum wage a double-edged sword for Alhambra?

Thanks to the new minimum wage law, over five million workers in California will receive higher wages by 2022. However, it might be a “double-edged sword” to some business owners—and maybe even employees— in Alhambra.

The minimum wage hike will take effect over a period of six years statewide. UC Berkeley released a report estimating that 5.6 million workers will see an average annual increase of $3,700. Some have argued that, while the new law will result in an increase of pay, it will also lead to a decrease of jobs, especially for small businesses.

Evie Jeang works behind her computer in her law firm“Alhambra and the SGV are filled with small business owners that came here as immigrants,” said Evie Jeang, a litigator who specializes in family law and labor law. She is also the founder of Ideal Legal Group in Alhambra. She is supportive to the wage hike, but she also has concerns about the legal efficiency. She believes some immigrant small business owners may be prone to violating the new law, because they may not have access to the resources that will educate them about the new guidelines. “They might try to pay employees under the table with cash" to bypass the laws, said Jeang. That would lead to serious penalties.

Researchers from UC Berkeley, however, said that the hike will have limited impact on the number of available jobs. They also maintained that the law will help alleviate income inequality. “We expect the proposed law to have large positive effects on living standards for a large number of California workers and very small effects on employment,” said Ken Jacobs, chair of the Labor Center at UC Berkeley.

Miguel stands in the barber shop

Some employees worry that a higher inflation rate could be one of the consequences that stem from the wage hike. “I am happy to see people get higher pay, but the customer is going to pay for it,” said Madina Miguel, who works in a barber shop on Valley Blvd. He thinks business owners will raise prices to mitigate the wage hike. “It is a double-edged sword,” he said.

Amy Tse, who works at the Belly Buster sandwich shop in Alhambra, shares similar concerns with Miguel. “First, we may have to raise the prices. Then we have to deal with customers. It will be very difficult,” she said. She is worried that other businesses will follow in the same vein. “Of course, I am happy to get higher pay. But when I go to eat, I will spend more on food,” she said. 

Some cities in the SGV have been a step ahead on the minimum wage hike. Pasadena got a jump-start on this matter when it approved in March a raise in its minimum wage, according to San Gabriel Valley Tribune. The minimum wage will be raised annually according to the local consumer price index after 2022, which means employees in Pasadena will receive higher pay, if inflation goes up. 

The Alhambra Source encourages comment on our stories. However, we do not vet comments for accuracy or endorse links to posts in the comment section. The thoughts and opinions expressed belong solely to the author of the comment.

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2 thoughts on “Is a higher minimum wage a double-edged sword for Alhambra?”

  1. Richard, it’s seems like you have never owned a business before and if you did, don’t know or don’t seem to care what hoops and hurdles small businesses must go through today. Small businesses make-up a large contribution of jobs in our country, not just our cities.

    Along with increased minimum wages, small business employers must also pay extra into employee social security and Medicare taxes. You may think employers must pay their “fair share” but many are doing so already by creating jobs with risks to their own money, not yours.

    Also critical…income equity doesn’t equate to productivity equity. Managers making $16-$20/hr will now feel cheated and will either seek further skills for higher pay, demand higher wages, or have their duties obsolete by lower-skilled workers who now have to “do more with less”.

    As the article content mentions, smaller businesses will have to raise prices but it’s not that easy. Small businesses on thin profit margins can’t demand higher prices, at least in a sustainable fashion, without showing added value to customers.

    Customers who don’t get the full benefits of higher minimum wages will seek cheaper places and higher-income customers will seek higher perceived value. Who wins? Large corporations who can produce the economies of scale for lower prices at good value. Who loses? Small businesses who end up subsidizing lower skilled employees on limited capital.

    Yes, pay higher fees. In the end, we get equality at the price of losing thousands of mom-and-pops willing to work hard and take risks. The result will only be the large corporations left controlling Main St…

  2. I DO NOT mind paying higher fees if this law helps others; I DO NOT mind paying higher taxes,if the higher taxes will help the country. If we want to live in good economic conditions, then we must be able to pay for it – NOTHING IS FREE! Recently I saw a documentary of some European countries have free education, free health care coverage for all their citizens (even for foreigners living in those country) with residents of those country having to pay higher taxes – but those that were interviewed said they don’t mind paying higher taxes if those taxes make life better for all their citizens.Seems anytime there is talk about treating other citizens well, providing others with necessary aid to improve their lives, people that oppose those efforts paint a gloomy picture. For example in the 70″s Proposition 103 passed by a wide majority fixing some problems in the insurance industry. Those opposing Proposition 103 insisted “if that proposition becomes law, no insurance company will want to do business in California, many will leave.” Instead, we have seen an increase of insurance company moving in, doing business in California.