The reality of the new $15 minimum wage is just starting to hithomr across New York and California – the first states to roll out the increase. Though an absolute godsend for millions of workers in desperate need of taking home a living wage, many smaller businesses are finding it difficult to come up with the necessary compensatory measures.
Their labor costs have in some cases skyrocketed, while their overall revenues remain unchanged – a potentially nightmarish scenario.
Contacted for comment, a variety of smaller businesses across these two states have spoken of getting both creative and somewhat severe with measures to help weather the financial impact. In a fair few coffee houses and restaurants for example, table service has been withdrawn entirely and diners are asked to serve themselves. In even more workplaces, older and more experienced workers are being taken on as a means by which to do the job of two or even three entry-level younger workers.
Or in other words, workforce numbers are being significantly reduced.
And in other instances, businesses are being forced to increase their prices at the very real risk of becoming uncompetitive.
Still, it’s a change that’s been on the horizon for some time which has in turn given business owners ample opportunity to make all necessary adjustments. Minimum wages have been on the up for years, in the wake of a series of low-pay worker strikes involving a variety of industries – the fast food industry in particular.
Massachusetts and California pay the highest minimum wage of $10. As of this month, new laws went live in New York and California that will see the statewide minimum wage increased to $15 over the next few years. It is estimated that around 75% of workers in the US still don’t receive the federal minimum wage of $7.25 an hour for working in retailing, leisure or hospitality industries.