How Have Pasadena Chamber Members Adjusted to Minimum Wage Changes?

The Chamber now encourages the City Council to defer to the state schedule and not further increase the minimum wage in Pasadena. – Courtesy photo

The Pasadena Chamber of Commerce release results from a survey of its members concerning the impact of the city’s minimum wage requirements. The survey was conducted in January and 416 of its members, out of 2,000 who received the survey, responded.

The Chamber now encourages the City Council to defer to the state schedule and not further increase the minimum wage in Pasadena. According to the Chamber, this change “would lessen the negative impact on employment opportunities, especially for low-wage and low skilled workers and create a more stable environment for Pasadena small businesses.”

“In the past three years we have seen the minimum wage increase by more than 30 percent. During that same period, we have seen overall payroll expenditures remain static while the number of businesses, including those that employ minimum wage workers, also remain the same,” said Pasadena Chamber CEO Paul Little. “Each of the studies commissioned by the City of Pasadena to determine impacts of the minimum wage increase verify what our poll respondents said: the same number of employees are earning the same amount of money, which means they are working less in 2019.”

According to the poll, this is how the 416 responders adjusted to the recent local minimum wage increases:

  • 18 percent did not make adjustments as a result of the increase.
  • 40 percent decreased their workforce.
  • 41 percent did not hire new employees.
  • 38 percent did not hire temporary or seasonal youth employees.
  • 11 percent decreased operating hours.
  • 54 percent raised prices (more than 90 percent also reduced employee hours/payroll).
  • 7 percent changed the way they interact with customers (more online sales, etc.).
  • 9 percent relocated outside Pasadena.
  • 3 percent closed.
  • 4 percent expanded to attract more customers.
  • 29 percent found other ways to reduce expenses (more aggressively bid out supplies, forego health insurance, reduce employee benefits, no employee bonuses, cut marketing expenses, expand off-site services that require fewer employees, reduced donations to local non-profits, renegotiate vendor costs. All made cuts to employee hours.).
  • 15 percent found ways to increase sales (all of these also made cuts to employee hours).
  • 32 percent demand a higher skill level from minimum wage employees.
  • 9 percent laid off less productive employees.

In its statement the Chamber summarizes that “When you compare the experience in Pasadena with other metropolitan areas, we cannot help but note that wage growth here has trailed behind those other areas. Similarly, employment growth in Pasadena has lagged behind other areas.”

February 7, 2019

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