Local restaurant chain owner Jeff King has accepted what appears to be the inevitable: an increase in the minimum wage that he will have to pay many of his 1,800 employees.


It doesn't mean that he likes it.


"We know the minimum wage is going to go up and it's going to affect our budget," said King, founder of the King's Seafood chain of restaurants in Southern California and owner of the upscale Water Grill restaurant in downtown Los Angeles. "It's just hard to plan right now because we don't know what the wage is going to be."


King is among the thousands of business owners in L.A. and throughout the state who are bracing for a hike next year in the state's current minimum wage of $6.75, a hike that will hit the hospitality, restaurant and retail sectors particularly hard.


These businesses have already been hit hard by rising costs of fuel and basic materials and are facing the prospect of a slowing economy.


Nonetheless, most businesses and business organizations are resigned to the political reality that the state's first minimum wage increase in five years is in the offing. But they are strongly opposing an effort to institute annual increases in the minimum wage.


"We think it's a reasonable increase and a compromise that will serve the state, workers and the business community as long as there are no annual increases," said Gary Toebben, the new president and chief executive of the Los Angeles Area Chamber of Commerce.


Muted response
Toebben's reaction was typical of business leaders throughout the region last week as negotiations intensified between Gov. Arnold Schwarzenegger and Democratic leaders in the Legislature.


Both sides agree that an increase in the state's minimum wage from the current $6.75 an hour to $7.75 an hour is warranted. The last increase was five years ago and everyone is acutely aware that voters are growing increasingly discontented about the rapidly rising cost of living.


But Democrat lawmakers are pushing to have the minimum wage increased every year tied to the inflation rate, a move that Schwarzenegger and the business community oppose.


"We are very much against the indexing of the minimum wage to inflation. It turns the minimum wage into a benefit like Social Security instead of a floor for wages, like it was originally intended," said Lonnie Kane, president of Karen Kane Inc., a local women's garment manufacturer.

For reprint and licensing requests for this article, CLICK HERE.

Prev