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Businesses, expert weigh in on upcoming California minimum wage increase

Wage increase taking effect Jan. 1, 2023
Posted at 6:18 AM, May 13, 2022
and last updated 2022-05-13 09:18:39-04

SAN DIEGO (KGTV) - Aimee Vargas has climbed the ranks to manager in her roughly four years at Cross Street Chicken and Beer on Convoy Street in Clairemont.

She said despite her success, making her money stretch is as important as ever. Vargas told ABC 10News that California's latest step to raise minimum wage from $15 to $15.50 an hour is definitely a step in the right directions and one she's thankful for.

"I'm 25 and I still live with my parents. So, it's going to help me a lot more in the sense where I can save more money to like possibly get a house,” Vargas said.

The minimum wage is going up in California based on a state law which triggers the increase if inflation exceeds seven percent.

Tommy Nguyen, the owner of Cross Street, said everyone in this economy needs a little bit more to survive, especially in California, and he thinks it’s great to push wages further up.

"We want to make it fair for our customers as well,” Nguyen said.

But he does add it could pose some changes when it comes to overhead costs.

"I understand that it's not just going to be us that's going to be potentially having to raise our prices, but it's our vendors, people we actually get our inventory from,” Nguyen said. “I think when that comes into factor and everything just moves up along the way, it's going to present many challenges."

With minimum wage rising, University of San Diego economics professor Dr. Alan Gin said this could impact other wages as well.

"A lot of other wages are tied to the minimum wage. They have to be a certain amount above the minimum wage. And I think that will basically ratchet up wages and income for people who are close to that level,” Gin said.

Nguyen agrees that's something he'll have to account for that in his business. Whether you view it as two quarters or five dimes, any boost in income is welcomed.

"Sometimes, we do have slow days where people aren't tipping as much or whatever. Or we just might not have any customers walking in. So, those 50 cents do help a lot,” Vargas said.

Nguyen said that it's already a struggle to hire on new employees and he feels that this upcoming bump isn't going to make things any easier.