The minimum wage will be going up $1 a year until it hits $15 an hour in 2022. It currently is at $11 an hour for companies with 26 or more employees. Does anyone have any idea how this is going to affect the price of things in California?
The stock market tanked mostly on news that wages were going up. Well, of course they are. Eighteen states have increased the minimum wage, and some will go up yearly like in California. Raising wages increased fear of inflation. The stock market stampeded like sheep by the mere hint of a wolfish rise in the rate of inflation.
Missouri raised its minimum wage from a mighty $7.70 to $7.85 an hour. No leaping off cliffs for the steady Missourians. California is more sympathetic since it is run by Democrats; they are all for a “living wage.” After all, California is way more expensive to live in than Missouri. The Bay Area is one of the most expensive places to live in the whole country; prices for homes and rentals are off the charts. We have homeless people mostly because they can’t afford to rent anything.
So, I get it; we need a minimum wage increase in California. But $15 an hour? And why can’t there be a reduced wage for beginners like kids ages 18 and under? You really think anyone will want to hire a 16-year-old with no experience for $15 an hour?
California has also changed the laws in agriculture. It is going to change the whole face of agriculture in the state that produces more food for the country than any other state. In the next five years, there will be a drastic change that will shock people.
The overtime rules have changed for agriculture. Farm laborers worked 60 hours in a week before they got overtime. Now, a city slicker who doesn’t know anything about agriculture will think that those workers are being exploited. They changed the rules so that agricultural workers will get overtime after 40 hours, just like everyone else. This means that with rising minimum wages, those workers will be getting less pay. Yes, less pay because the farmers will tell them to go home when they hit 40 hours.
And this is at a time when farmers are having problems getting farm workers at all. The crackdown on illegal immigration has had a ripple effect in agriculture where most illegals work.
What will this do? Farmers will go to crops that can be mechanized. It is already happening. Have you noticed all the walnut and almond orchards going in? Did you see that as you enter San Joaquin County on Highway 26 that about 100-plus acres of grapes have been ripped out? Want to guess what will go in there? I was told that 600 acres of almonds can be grown and harvested by two people. How many people does it take to grow and harvest 100 acres of grapes? If it can be mechanized somehow, it will be.
Most of the walnuts and almonds grown in this state are shipped out-of-state or out of the country. What will happen to the other crops that we grow here? What about peaches and plums and cherries? What about tomatoes, grapes and strawberries? The prices for anything labor-intensive will go up. Prices for nursery plants will go up, too. They already are.
One nursery in California I have dealt with since I got into horticulture is going out of business after 73 years. The recession and the drought took their toll, but the rising minimum wage and excessive regulations regarding water and nitrogen use were some of the other factors. The company shipped some of its fruit trees out of state, but with the minimum wage in other states in the $7.25 to $7.85 range, their out-of-state sales were declining. Sixty percent of the workers were hired at minimum wage at peak season for harvest, often working more than 40 hours a week. How do you compete with other nurseries or businesses across the country when your minimum wage is $15? Will this happen to other businesses in California?
So get used to buying more produce from Mexico. And get used to paying more for produce and more for that hamburger, and that glass of wine. Prices will rise or some businesses will simply close. This won’t only affect minimum wage earners; the ones making $15 an hour now will expect their pay to rise. After all, if they have been working hard at their company for a few years, why should they only make minimum wage?
Don Urbanus is a Burson business owner. Contact him at email@example.com.