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I wish every Chamber member a Happy New Year. The Chamber networking meetings are great opportunities to come together, share ideas, and support each other’s businesses. Our first lunch meeting will be at Fleming’s Steakhouse on Thursday, January 6, 2022, with City Manager John Gillison as our guest speaker. This is a great chance to hear what is happening in our city and network with other members while enjoying a great lunch.
We had many Ribbon Cuttings in 2021 and have two more this month: Cindy’s Avon on January 11 and Kana Financial Consulting on January 18. Supporting local businesses helps all of us, especially when a new business opens. We function better as a community when we help each other, and one way to do so is to shop local.
Although there are many challenges facing us, I encourage all to stay hopeful and motivated. “Hope is a match in a dark tunnel, a moment of light, just enough to reveal the path ahead and ultimately the way out.” (Dr. Judith Rich). Do not let anyone take your match away from you for that is your hope and your light. When you strike your match, please share your light to help someone else find their match so they can create their light and find their way. There is no greater gift than helping someone discover their purpose and achieve their dream. We can do this by motivating one another, mentoring someone, or lending a hand to someone in need.
As we start the new year, you will inevitably notice an increase in prices on goods and services due to inflation. A significant component to inflation that is often overlooked is California’s increase in minimum wage, which goes up another dollar this year and causes ‘wage push inflation’. In 2017, California began its yearly dollar increases to the minimum wage from $10 to $14 per hour for companies with 25 or less employees, and $15 per hour for companies with 26 or more employees. An artificial 40% increase in the cost of labor over the course of five years (50% for companies with 26 or more employees) creates a permanent inflationary trajectory. What in your business has increased 40-50% in a good way the last five years? The higher the cost of labor, the higher the cost of everything associated therewith.
But the increase in minimum wage does not stop there as it has a ripple effect throughout the economy. Modest increases can be absorbed, but a dollar increase every year is a shock to the system. Minimum wage becomes a disparate control that separates labor demand from labor supply thereby stifling job growth, suppressing wages for middle income earners, creating unemployment, underemployment, and decreased production – all of which ultimately hurts the working class it was supposed to help. There are limits to what businesses can pay for labor, especially small businesses, and either quality tapers off, hours are reduced, and/or workers are expected to do more with less.
We would be better served as a society if we allow for slow and steady growth and increases that followed closely in line with market conditions and economic factors. When we exponentially increase the cost of labor, even with noble intentions, we ignore the negative effects on workers total well-being and purchasing power – all of which decreased the past five years. Raising the floor on wages typically hurts those in the middle income bracket the most while doing little to benefit the minimum wage earner. If you need proof, then ask yourself if a person making minimum wage is better off now than they were in 2015?
The lesson to be learned here is that we should not raise the minimum wage for the next ten years and allow the labor market to stabilize on its own. When the saber-rattling push for $18 or $20 per hour starts later this year, please kindly say no thank you.
I am hopeful in 2022 that we all remember and cherish our rights as citizens. We must hold on to our Constitutional rights because such rights are not meant only for good times, but necessary during difficult times to prevent us from relinquishing life, liberty, and the pursuit of happiness. Rights cannot be temporal, subject to the passion and persuasions of our time, for that is illusive and not lasting. We should not forego rights for the sake of safety for then we will have given away our match and no can longer illuminate our way.
When Patrick Henry famously stated: “Give me liberty or give me death!” – he was not asking to die, he was asking for the chance to live with dignity and self-determination. Constitutional rights can and will endure challenging times if we are patient and persevere the way we have for 234 years.
If the Chamber can be of any assistance, please contact me at Chairman@ranchochamber.org.
Sincerely,
Robert A. Hufnagel
President-Chair
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