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Minimum Wage Increase, Costs Affect Businesses

California's minimum wage increased on Jan. 1 from $7.50 per hour to $8 per hour. Nearly 1.5 million California workers such as salespersons, restaurant workers, farm workers, childcare workers, janitors, homecare workers, security guards, and more will benefit from the wage increase, according to the California Labor Federation.

Local businesses, however, are feeling the pinch of an increased cost of doing business due to the wages and insurance costs.

Valorie Glor, co-owner of The Learning Tree childcare center, employs approximately five minimum wage employees out of 30 with a facility in Oakdale and two in Escalon. She said that when minimum wage goes up, it bumps those wages over or close to that of other employees such as some teachers and other employees. She said they have to raise a number of those other employee wages as well because of it.

"The minimum wage increase is tough ... It's a big drain, it's a problem for us," said Glor. "What we're doing is we're pushing it on to our parents."

She said that they feel bad about having to pass the cost of doing business along to their customers, but they don't have a choice.

Sierra Railroad Dinner Train President Chris Hart said that he's not worried about the minimum wage increase, it's the annual increases in employee insurance and workers compensation that drives him "nuts." He said that those costs increase 10 to 20 percent each year and those make the cost of doing business much higher.

"I don't think the 50 cent increase is negatively impacting us that much," Hart said.

He added that for employees such as the dinner train servers, gratuities make up a portion of their pay, so they are not just reliant on a minimum wage paycheck alone.

"I certainly understand the need for an increase in minimum wage," said Glor.

She added that it'd be really hard for a minimum wage employee, especially a head of household, to raise a family on that. She also said that people who are getting minimum wage aren't really getting ahead because of prices going up all around and that there should be a cap on prices for things such as gas.

"We are employee heavy. We have to maintain our ratios... The small business owner really does take it," she said. "It's hard on us. Big corporations, like Wal-Mart, still have a bigger profit margin."