One California city has set the highest minimum wage in the country at $19.08 per hour, leaving small business owners to question how they’ll stay afloat.
The West Hollywood City Council announced the increase went in effect as of July 1 and will remain until June 2024 when it will be raised again.
Brett Latteri, owner of The Den on Sunset, explained on "Fox & Friends" Thursday that the wage increase isn’t the whole story.
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"There's a whole other component – a paid time off component – that part-time and hourly employees get to accrue, which adds about another $2 an hour to the wage," Latteri told host Steve Doocy. "So by the time you're all said and done with payroll taxes and [workers'] comp, you're at about $23 to $25 an hour per employee."
"How do you survive?" he asked.
Latteri said the city council’s intent was to allow the opportunity for anyone to live and survive in West Hollywood, even on minimum wage employment.
But the minimum wage increase in the midst of "bleak" economic conditions, Latteri said, will only create a more aggressive cycle of inflation.
"I believe it was good intentions," he said. "It's poor implementation and very poor timing."
"You raise prices, it just costs people more to live and so on and so forth. So we keep raising wages, which causes more inflation. So I don't see how we get out of this or how this ends well for anybody."
Latteri said he’s already seen the impact of rising costs as customers are "cash strapped" and dining out less frequently.
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And the wage increase only makes West Hollywood less competitive compared to surrounding areas like Beverly Hills, which Latteri said have significantly lower labor costs.
"The past three years have been very stressful on the small business community. Profits go down every single year. Stress goes up," he stressed.
Latteri said he is now frustrated, and he called on city council members to consider the true cost of the wage increase.
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"I come here as a small business owner, an entrepreneur, trying to offer a great experience, competitive pricing and a great product. And I want a great workplace," he said. "I don't know how to do that anymore."
"I would love for the city to come and meet with the business owners and reevaluate the decision that they made."
