San Diego Businesses React To Minimum Wage Boost
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San Diego voters approved boosting San Diego’s minimum wage from $10/hour to $10.50/hour in June, and it got another bump Jan. 1 to $11.50/hour. The local referendum established an annual minimum wage increase based on an inflation-adjusted formula, which could incrementally push San Diego’s minimum wage beyond the state’s scheduled minimum wage increase to $15/hour by 2022.
Economists have opposing views on how the higher minimum wage will affect jobs. Some predict the state will lose thousands of jobs, while others expect higher wages to generate more spending and cause employers to hire more people. One San Diego company has announced it will move part of its operations to Texas, where the minimum wage is $7.25/hour. Competitive Edge Research & Communications, a political consulting and polling firm that has been downtown since 1987, is moving 75 call center jobs to El Paso, with 10 employees remaining in San Diego, chief executive John Nienstedt told the San Diego Union-Tribune.
Restaurants may pass the minimum wage increase through to their customers. Many of San Diego’s full-service restaurants are introducing an average surcharge of 3% of the meal tab to help cover labor costs, which some operators contend will amount to hundreds of thousands of dollars annually, the Union-Tribune reports. Citing a thin profit margin, restaurateurs said diners would better tolerate a charge on their bill than continuous price increases.