Bad timing makes minimum wage increase a bad idea

Last month, the National Federation of Independent Business in California released a study on the impact of Assembly Bill 10, which would increase California’s minimum wage to $9.25 per hour in three years. The bill would also provide for future increases in the minimum wage, depending on inflation.

The study, conducted by NFIB’s Research Foundation in Washington D.C., found that the long-term effect of AB 10 would be the loss of jobs and economic productivity in the state. Depending on the future rate of inflation, the passage of AB 10 could result in more than 68,000 jobs lost in California over 10 years and a $5.7 billion reduction in real output.

There couldn’t be a worse time to add costs onto small-business owners. Most of us are still figuring out how to deal with Proposition 30’s massive tax increases that were passed in November, along with many local taxes and fees. And the real cost to small business to implement the massive and sweeping new federal health care law is still unclear.

With all those costs, why would our state legislature continue to go back to the same well over and over? I’ve got a news flash — the well is empty with no signs of filling up anytime soon.

I wonder if the folks who came up with this proposal understand the full cost to me, the employer. What doesn’t get mentioned is the increase in my employer taxes – a 15-plus percent increase – on top of the direct payroll cost increase.

It’s another surcharge, another kind of inflation, that makes it more difficult for me to keep my doors open. And it certainly is a disincentive to adding any new crew at Seabreeze.

Here’s the picture: For most of the products I sell in my store, the retail prices are set by the government, or printed on the book covers, or otherwise readily available to the consumer.

My costs go up, but I can’t raise my prices to accommodate the increase. I can sell for less than the so-called “suggested retail” but I cannot sell for more. And as a consumer myself, I can expect to be paying more to the businesses I buy from as they try to cover their own cost increases.

Each of us should demand that our leaders stay focused on job creation, not job loss, and strengthening, not weakening, the economy. A recent poll by the Public Policy Institute of California found that 45 percent of those surveyed thought that the most important issue facing the state was jobs and the economy. Is Sacramento getting that message?

Let’s start creating policies that reduce regulations, reform the tax system and make the lives of our job creators — and their employees — a little easier. They deserve nothing less.

Kinner is NFIB/CA Leadership Council vice chair and owner of Seabreeze Nautical Books in San Diego.

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