Next year, the minimum wage in California will increase to $15.50. Some Santa Maria businesses are bracing for the added expense.
Back in 2016, California lawmakers voted to increase the state's minimum wage to $15 per hour. However, that same law said the minimum wage must increase $.50 if inflation rose more than 7% between the 2021 and 2022 fiscal years.
Right now, the California Department of Finance projects inflation for 2022 will be 7.6% higher than the previous year, meaning in 2023, California businesses will have to pay their workers more.
Still, the owners of Gina’s Piece of Cake, a local bakery at the Santa Maria Town Center, say increased expenses are nothing new.
"We’ve been doing this for some time in the state of California," said owner Kevin Martin. "It's an unfortunate thing that this is forced upon businesses because what the businesses do is turn that cost onto the customer."
The California Department of Finance estimates roughly 3-million California workers will receive the bump in pay.
"For us, we have about 15 employees, so each one of those employees are going to get that wage increase. So not only do we have to pay the employee, but we have to pay the employee’s taxes to the state," Martin added.
Meantime, a few blocks down the road, Sergio Diaz, owner of Sergio's Furniture and Mattress, says he is encouraged that wages are going up.
"It has to happen for people to live on the Central Coast, for them to afford an apartment, they have to make more income," Diaz told KSBY.
He says he already pays his employees above minimum wage but admits items in his store have doubled in cost in recent years as a result of inflation.
The official inflation figures for the 2022 fiscal year will be finalized later this summer. The details of the increase are part of the $18-million inflation relief package proposed by Governor Gavin Newsom.