Will California's Small Business Owners See a Minimum Wage Hike?

A new legislative proposal could force small business owners across the Golden State to pay as much as a $13 minimum wage. 

Earlier this session, the proposal reared its ugly head, in the form of Senate Bill 3, authored by State Senator Mark Leno. The bill would use a two-step approach, increasing the wage from $9 to $11 in 2016, then $13 by 2017. Then, the wage would increase automatically, indexed to inflation. 

“Small business in California already have to deal with the highest statewide sales and income taxes in the nation, and adding on more costs to small employers makes running a business even more difficult,” says NFIB/CA ExecutiveDirector John Kabateck. “Our legislators should be supporting policy that encourages job growth by reducing regulations and taxes, and providing incentives for small businesses to create jobs—not laws that will turn Main Street into a ghost town.”

In 2013, NFIB Research Foundation studied the economic effects on a potential minimum wage increase, focusing on Assembly Bill 10, which would have increased the base wage to $9.25 in 2016. NFIB found that such an increase would result in over 68,000 lost jobs across the state over a 10-year period, as well as a reduction in real output of up to $5.7 billion.

“More than 63 percent of the lost jobs would be jobs from the small business sector of the economy,” writes the Research Foundation’s Michael J. Chow.

Committee hearings have not been scheduled yet, but for information—or to voice your opposition—contact your legislator or Ken DeVore, NFIB/CA legislative director at [email protected] or 916-448-9904.