On Jan. 1, the minimum wage in California rose to $14 an hour. For businesses with 25 or fewer workers, minimum hourly pay will go up to $13 an hour. There are concerns over how the pay increase will affect local businesses that are already struggling during the pandemic.
“I’m responsible for 20 something people’s livelihoods. It’s a big responsibility to get them what they need and they stick behind me,” said Joe Scalzitti, owner of Mary’s Donuts in Lakeside.
During the pandemic, Scalzitti has adapted to changing restrictions. Now, with the minimum wage going up, he is facing another financial challenge.
“I’m gonna have to tighten my belt and take on a few more jobs here,” said Scalzitti.
Instead of cutting employees, Scalzitti is doing more of the work himself.
Many businesses across San Diego County are dealing with a rise in payroll expenses. Valentina in Encinitas was forced to cut its staff in December due to coronavirus restrictions. They don’t want to make any more staff cuts.
“We don’t want to go,' Hey, the minimum wage is up, we’re going to get rid of people.' That’s not what we’re about,” said Ricarco Zarate, Jr., Director of Operations at Valentina.
While there are concerns rising wages will hurt struggling businesses, worker advocates say higher wages will help San Diego’s economic recovery.
“For all of us to thrive, and to get out of this, we’ll need spending power from everyone in our county to be able to go buy something,” said Aldor Calderon, Director of the Employee Rights Center
Calderon argues a rise in minimum wage will eventually help higher earning employees increase their salaries.
There are still worries the cost of the wage increase will be passed to consumers. Small businesses in San Diego County like Valentina and Mary’s aren’t ready to do that.
“It’s going to be challenging for me to do that to my community,” Scalzitti said.
“These are my neighbors, these are our people so going through a pandemic right now and passing this minimum wage onto them, I can’t do it,” Scalzitti said.
California’s minimum wage is scheduled to increase to $15 an hour in 2023.