California Raises Minimum Wage To Ease Cost Of Living Strain – But Will it Work?

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Californians (like residents in other states) are terribly affected by the recession. The government now offers a solution and in January, California will raise the minimum wage for its residents — but not everyone thinks the solution is that simple. Starting in 2023, Californians will receive a $15.50 minimum wage, regardless of size of employer.

Here are some factors that need to be put into consideration.

Housing

It’s no surprise that the most populous city in California is Los Angeles. Unfortunately, as captivating as the Golden Coast is, LA is also the fourth most costly city to live in worldwide; the most expensive one is located in the other corner of the country, New York City.

When it comes to housing, the worst case that can happen to an inhabitant is to lose their home. Homelessness has been a problem in both Los Angeles and New York. The average monthly rent for a 1 bedroom apartment in LA is $2,527. NYC costs over a thousand dollars more with the average rent being $3,844. Many California residents and New Yorkers cannot afford to pay this much lease if their hourly salary is the current $14.50 and $13, respectively. Thus, many opt to flee to other cities.

Businesses

Business owners are the most negatively impacted entities in the minimum wage hike; they’re the ones who have to pay each of their employees around an extra dollar and a half per hour of their work. To make up for their financial losses, merchants charge their customers higher prices for products or services, inadvertently also impacting the very segment of the population the minimum wage increase is supposed to help. That extra cost for a haircut? When California raises minimum wage it’ll likely be passed on straight to the consumer.

Furthermore, business owners who find it difficult to sustain their employees’ salaries resort to laying them off. Even giant companies like Netflix (whose headquarters is based in California) and Facebook’s parent company, Meta, are also dismissing their workers.

Individuals

The minimum wage increase is made for the employees but not many believe that they’ll feel a lot of benefits from it. The cost of living in big cities like Los Angeles and New York City is so expensive they’re immensely suffering from the inflated rates they spend their money on. This is evident from the recent New York strike as several workers are growing more hostile against their employers and the state.

As California raises minimum wage, the extra buck or so may not go far enough. An Angeleno’s monthly grocery would take around $300-$400. In NYC, it would cost about a hundred dollars more; groceries in New York cost $400-$500 every month.

Other U.S. States

California and New York tend to slightly be more influential when it comes to their appeals to the government (this is partially because of their huge population) but other states are also affected by the economic crisis. Here are a few other states that will undergo a minimum wage increase this 2023.

Washington currently has the highest minimum wage and they are to increase it from $14.49 to $15.74 per hour.

Nevada’s ballot question is still on hold, when passed, the minimum wage of $10.50 will increase to $12.

New York will also increase its employees’ minimum wage. It will be raised from $13.20 to $14.20; workers based in New York City, Suffolk, Nassau, and Westchester will get a minimum of $15 hourly rate.

According to the Oregon Bureau of Labor and Industries, their minimum wage will be “adjusted annually based on the increase, if any, to the US City average Consumer Price Index for All Urban Consumers.” The current minimum wage is still at $13.50.

The discussion of Michigan’s wage increase is delayed until February 2023. The hourly wage of Michigan employees is $9.87. Once resumed and considered, the average minimum wage will increase to $12 along with paid sick leaves.

Closing Remarks

States like California raise minimum wages to keep the residents afloat, but their quality of life keeps getting compromised. The USA is currently stuck in a cycle where employees would get paid more, but they would also have to spend more. Their complacency in their employment status also diminishes every day as many workers have been laid off and many more keep getting laid off. In relation to this, if you believe you’ve been wrongly dismissed by your employer, it’s important to consult a lawyer about this.

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