California political leaders have agreed on a deal that will lead to imposing a $15 minimum wage statewide, not only in San Francisco and San Jose, where the median wage is expected by 2022 to be $34-37, but also in Fresno and Chico, where the projected median wage in that year is around $20. [Noam Scheiber and Ian Lovett, New York Times]
Cities with high real estate prices are typically better able to withstand minimum wage increases than cities with low prices, because wages represent a smaller fraction of a business’s overall cost in those cities and therefore have a smaller effect on the bottom line….
Craig Scharton, the owner of a farm-to-table restaurant called Peeve’s Public House in downtown Fresno, said he was still smarting from a recent increase in the minimum wage from $9 to $10 an hour. He said the increase had forced him to close on Mondays and Tuesdays and played a role in reducing his staffing to a dozen today from 18 two and a half years ago.
Mr. Scharton was at a loss to explain how he would absorb the new increase. “We’re trying our best to revitalize downtown,” he said. “This just kind of kicks our legs out from under us.”