Market Overview

Minimum Wage Increase Sends Ripple Effect Through Stay Green, Other Southern California Businesses

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67% Hike Increases Overall Labor Costs, Leaving Businesses and Customers Holding the Bag for ‘Trickle Up' Consequences

SANTA CLARITA, Calif. (PRWEB) July 25, 2018

It's a fact of life for Southern California businesses, workers and customers: A graduated 67-percent hike in the Los Angeles County minimum wage is increasing overall labor costs, jeopardizing jobs and increasing customers' costs for goods and services.

"Everyone needs to be prepared for inflation in the pricing of goods and services throughout Southern California," says Stay Green CEO Chris Angelo. "The simple truth is a minimum wage increase doesn't just affect labor costs for minimum wage workers — it affects every labor cost throughout a business, and it affects labor costs across a wide variety of industries: fast food, hospitality, janitorial services, and more. Those costs are on the rise in L.A. County, and the impacts are felt not just in L.A. County but throughout Southern California."

L.A. County is in the midst of a six-year, 67-percent increase in the minimum wage, with yearly increases ranging from 5 percent to 14 percent every year from 2015 to 2020, elevating the minimum wage from $9 in 2014 to $15 in 2020. A new increase took effect July 1, 2018, raising the minimum wage to $13.25 for large businesses — a 47% increase since 2014.

Angelo said Stay Green Inc. places a high priority on delivering value and excellent service to clients, while also providing competitive pay and benefits for the employees who help Stay Green continue to succeed as a Southern California landscape industry leader. It can be a delicate balancing act, and at the core of that balancing act, Stay Green constantly strives to apply its values of efficiency, fairness and integrity.

"The balancing act is getting increasingly challenging," Angelo said. "The minimum wage increases that have already happened, and those still to come in the next several years, are backing L.A. County businesses into a corner. These increased costs are inevitably passed through to customers. You can see it affect pricing in our proposals, where we list our wages."

Angelo pointed out a major example of the ripple effects of the minimum wage increase: Exempt employees — including those who supervise others — by law must earn at least double the minimum wage. So, with every increase in the minimum wage, also comes an increase in the "minimum" wages for all supervisors and other exempt employees. As L.A. County and California move from $9 in 2014 toward a $15-per-hour minimum wage, the minimum for exempt employees moves from $18 to $30 per hour.

"All of a sudden, Southern California businesses will have a lot more $30-per-hour employees — even businesses that don't employ many minimum wage workers. This escalates labor costs throughout a business," Angelo said. "Any time a business experiences a two-thirds increase in an expense, it can't help but have an impact on that business, its operations, its employees and its customers."

Angelo said the fact that all entry-level service wage industries are competing for employees in a tight labor market, with rising local minimum wage costs, will inevitably lead to double-digit percentage increases in the costs for services and goods. In fact, he said, many of those increases are already happening, and may be surprising to some customers.

In the landscaping industry, Angelo said, many customers are finding their costs increasing in an industry where businesses try to hold the line on costs as much as possible.

"Obviously, it's complicated," Angelo said. "In many cases, there will be a combination of impacts, as customers' costs increase in some combination with impacts on workers. Some companies' employees will find themselves facing reduced hours — or worse, unemployment — which of course doesn't help anyone."

Angelo said Stay Green is working hard to maintain the right balance, but in general, clients of Southland businesses can expect costs to increase from now through the coming few years.

"We have to find every efficiency we can to continue providing value to our clients," Angelo said. "However, it's going to be a fact of life for years to come: Doing business in L.A. County is getting more and more expensive, in large part due to this drastic increase in labor costs. Unfortunately, everyone needs to have their eyes open to that fact, and be prepared for their expenses to increase — substantially."

About Stay Green
Founded in 1970, Stay Green Inc. (http://www.staygreen.com) provides award-winning landscape maintenance, tree care, and plant health care services for premiere residential, commercial and industrial properties throughout Southern California. Stay Green serves clients throughout Southern California, and exercises environmental stewardship through its Sustainability Practices, which are applied across all service lines to help customers protect the environment as well as the bottom line. Stay Green Inc. is recognized as a leading provider of high-quality landscape services, having achieved a 95 percent customer retention rate, along with receiving the industry's most prestigious awards.

For the original version on PRWeb visit: https://www.prweb.com/releases/minimum_wage_increase_sends_ripple_effect_through_stay_green_other_southern_california_businesses/prweb15649507.htm

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