Should Gavin Newsom delay a minimum wage hike? California businesses ask for reprieve

The California Chamber of Commerce is urging Gov. Gavin Newsom to postpone a minimum wage increase to ease the expenses of businesses struggling to emerge from the coronavirus outbreak.

California’s current minimum wage is $12 an hour for businesses with fewer than 26 employees, and $13 an hour for businesses with 26 or more. Those numbers are both slated to increase by $1 an hour on Jan. 1, in line with a gradual escalation towards $15 an hour by 2023.

The governor has the option to delay the scheduled wage hike if unemployment rises or sales tax receipts decline. So far, he has declined to exercise that power — a move that advocacy groups say will wreak havoc on businesses that are already suffering amid the economic downturn.

“The criteria in the law for postponement fit the current conditions like a glove,” a May 26 Chamber of Commerce letter reads. “If postponement is not indicated under this dire economic and budget circumstance, then just when would this offramp apply?”

The Chamber, which boasts 40,000 members, opposed the 2016 legislation that set the state on the path to $15 an hour. So did the California Restaurant Association, which spoke out against the governor’s scheduled wage increase in late March.

Up to 30 percent of the state’s 90,000 restaurants are now in danger of permanent closure without decisive action from the state, the association’s president, Jot Condie said.

John Kabateck, California state director for the National Federation of Independent Businesses, also has called for a delay in the wage increase. .

Labor groups maintain that the increase is essential to supporting low-wage workers.

“The governor has many tough choices to make [to] balance the budget, but, frankly, implementing the minimum wage increase as planned isn’t one of them,” California Labor Federation spokesman Steve Smith said in a statement. “Low-wage workers spending wages at local businesses is key to getting our economy back on its feet.”