Chamber Says Survey Reveals Members Have Cut Payroll, Raised Prices to Cope with Minimum Wage Hikes

Published : Tuesday, February 5, 2019 | 5:42 AM

Paul Little, Pasadena Chamber of Commerce President and CEO

The Pasadena Chamber of Commerce said a survey of its membership reveals that employers have cut workers’ hours, overtime, bonuses, and benefits – and sometimes eliminated them, to cope with the City’s mandated minimum wage requirements

The survey was conducted in January, 2019, according to a statement from the Chamber, which is now asking the Pasadena City Council to synchronize planned wage increases with the State of California’s more deliberate schedule.

“This is not a request that they roll back the current Pasadena minimum wage,” the chamber said in a Feb. 4 statement, “but simply defer increases so that the State of California will eventually catch up (and exceed) the Pasadena minimum wage.”

The move, the Chamber said, would reduce the law’s impact on employment opportunities, especially for low-wage and low skilled workers and stabilize the small business environment locally.

Chamber President and CEO Paul Little said the chamber received 416 responses as of Jan. 31, from among nearly 2,000 employers that received the questionnaire.

The biggest number of poll respondents, about 18 percent of them, are full-service restaurants. About 9 percent are traditional small retailers; 8 percent are office-based businesses, such as insurance, finance, etc.; 7 percent are non-profits, and 7 percent are consultancies.

Fast-food restaurants comprised about 4 percent of those who responded. Fast-casual restaurants, banks, and credit unions, home health-care providers, automobile sales and service businesses, and contractors and builders, represented at least 3 percent each, according to the statement.

Asked what kind of adjustments had been made to meet the demands of the new minimum wage, 54 percent said they raised the prices of their products, while reducing employee hours and workforce size.

Forty-one percent said they did not hire new employees, while 40 percent said they decreased their workforce, and 38 percent did not hire temporary or seasonal workers.

About 32 percent demanded a higher skill level from minimum wage employees, and 29 percent found other ways to reduce expenses, such as more aggressively bidding out supplies, foregoing health insurance, reducing employee benefits, eliminating employee bonuses, cutting marketing expenses, expanding off-site services that require fewer employees, and reducing donations to local nonprofits.

Some 18 percent did not make any adjustments as a result of the wage increase, the chamber said.

The chamber also cited data from the City of Pasadena’s own consultants saying that, for predominantly minimum wage industries, there has been no wage growth since 2015. In some industries, such as janitorial, there has been a decline in overall wages, the statement said.

“When you compare the experience in Pasadena with other metropolitan areas, we cannot help but note that wage growth here has trailed behind those other areas,” the statement concluded. “Similarly, employment growth in Pasadena has lagged behind other areas.”

 

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