Minimum wage hike impacting small business
RED BLUFF, Calif. - A Tehama County produce grower says she's being forced to raise prices in order to cope with a recent minimum wage hike, and she might have to hire fewer employees when the next hike hits January 2016.
Kathy Brandt owns Julia's Fruit Stand out of Dairyville, just south of Red Bluff.
This year she increased her staff to 23, the largest since she started in the fruit and vegetable business some 12 years ago.
When the California minimum wage rose a dollar at the beginning of July, she says she was forced to make changes.
"When the wage went to nine dollars an hour we had to raise all of our prices," Brandt said.
Brandt hires mostly teenagers to run her fruit stand and help her at farmer's markets.
"We pride ourselves on hiring a lot of teenagers to try to teach them how to work and to help them learn communication skills and just get some responsibility and a pride and a work ethic."
Teenage employees also means low-wage workers, but the minimum wage increase meant she had to pay them all a dollar more per hour.
What's more, her payroll taxes also rose with the higher wages.
To make up for the lost profits, Brandt she raised prices a quarter per pound and a dollar per flat of produce, essentially passing on the burden to her loyal customers.
"People have said, 'Oh, your prices are higher,' and I've said, 'Well, we do try to employee a lot of teenagers.'"
Brandt said this year has been an adjustment, but she's looking at more trouble when the minimum wage is set again to rise a dollar in January 2016.
"I think we will not be able to have as many kids hired. We'll have to cut back on our workforce, which is really, it is a bummer," Brandt said.
While the customers are feeling the pinch now, she says the young workforce will be the next ones hit.
"If you talk to businesses around town, many people aren't really excited about hiring teenagers," Brandt said. "We do because you're investing in the youth and you're investing in the future really of our community. It's hard for them to find jobs so it's sad that we won't be able to hire as many."
Brandt says she was hoping to expand her business, but will just have to do more with less instead.