Small business knows how to take a punch, and the California Senate knows how to deliver one.
Senate Bill935 seeks to raise California's minimum wage and it's not taking any prisoners. SB935 is looming and we should all be afraid.
If SB935 passes, it would increase entry level wages by 65 percent, and that's not a typo. Imagine owning a small business or any business and waking up one day only to find out you have to pay 65 percent more for something, but you get the same product in return.
Does that seem like a fair fight?
The ink is barely dry on Assembly Bill10, which was signed by the governor just last September and raised California's minimum wage by 25 percent, and now the state Senate, with its blinders firmly in place, wants to deliver a body blow to small business.
Let's be reasonable here. Since 1980, each time the minimum wage was raised in this state it has gone up an average of 10.81 percent. Those are percentages most small business owners can wrap their arms around. We can trim payroll, cut corners, raise prices and adjust our business models to compensate.
But SB935 is too much, too soon, too fast.
Before we raise labor costs 65 percent, why not let us absorb the costs associated with mandated health care? Give us some time to figure out how were going to pay for the ever-increasing costs of goods, which is skyrocketing out of control.
Let us absorb dramatic increases in payroll taxes, let us absorb workers' compensation costs that seem to have no ceiling. But most important, let us absorb the most recent 25 percent wage increase (AB10), which hasn't even gone into effect yet!
But Sacramento politicians don't seem to care about small business in California. All they care about is getting votes and re-elected. They contend there is nothing better than feel-good legislation that gives everybody a 65 percent pay increase.
To make matters worse, SB935 contains a trigger that will automatically raise wages each and every year. So, no longer will employees have to earn a raise, the state has taken care of that for them. So much for hard work.
It is difficult to believe there is a one-size-fits-all wage scale in a state with more than 38 million people in it. Why aren't we talking about tiered minimum wages?
How about an entry-level minimum wages for those workers just entering the work force (for whom the minimum wage is really intended)?
What about a separate wage for tipped employees? Forty-four other states have tiered wages for those who earn tips; why not California? You say tips shouldn't count as wages? The IRS says they do, in fact they mandate it.
Dramatic increases to the minimum wage are not just about the wage earner. Everybody is affected. Mandated higher wages don't come from free money, although our elected officials seem to think they do. Someone has to pay, and that someone is all of us. The state has done good a job of explaining why it feels the need to artificially raise everybody's wages, it just hasn't explained to small business where the money is going to come from.
Small-business owners are accustomed to dealing with issues like rent increases, higher utility bills, higher insurance premiums and unforeseen repairs. Those are things we can negotiate and, over time, adjust our business plans to compensate.
What we can't take is the destructive fallout from SB935. This is a game changer. Make no mistake. Small business can take a smash to the jaw, the jab to the rib cage and an uppercut to the chin.
But this knock out punch will keep us down for the count and beyond recovery.
Rocco Biale is owner of Rocco's Pizzeria in Walnut Creek.