SANTA MARIA, Calif. - Minimum wage employees in California are earning $11-$12 an hour in 2019. Experts say some Central Coast businesses might have a hard time adapting to the recent wage increase.
“You either pass those costs on to your customers or you have to absorb those costs,” explained Anne Cremarosa, president of the Santa Maria Business Development Center. The organization works with local entrepreneurs to help them start, or grow a small business.
"At one point, there's only so much you can charge for say, a regular meal," she says.
Cremarosa fears the minimum wage hike could impact the number of jobs available.
“if you're paying $10 an hour, and you have three people, you're paying $30 an hour. But if costs go up to $15 an hour, those same $30 only buys you two [employees],” she said.
Cremarosa says some Central Coast shops may continue to struggle as the paychecks get bigger, reaching $15 an hour by 2023.
“Our population doesn't have the highest level of disposable income,” the Santa Maria Business Development Center president said, adding that small businesses have a specially hard time flourishing in places like Santa Maria where tourism and income levels are lower than in cities like Santa Barbara.
Other businesses report the changes haven't impacted them as much. At the Santa Maria Mexican restaurant Senor Taco, employees earn $11 an hour.
“Some of our employees come in and they are excited, like oh the minimum wage went up!” said Elideth Dimas, a cook at Senor Taco.
However, the new payroll may have contributed to new meal costs.
“The prices did go up this year,” Dimas said, adding that multiple factors determine price changes.
Companies employing 26 or more workers must pay $12 an hour, while businesses employing fewer than 26 must pay $11 an hour.