My brother is heading to Puerto Rico later this month to find an apartment for himself and a business office in which to relocate his company's call center. California is forcing him out. As I said in a prior post, the minimum wage increase is going to compel him to increase his product pricing to a level that is uncompetitive. When the company is fully relocated, California will have lost 30+ jobs. That might not sound like much, but when you consider that hundreds of thousands of California's small businesses must be facing a similar fate, it's hard to imagine the state avoiding a major economic collapse.
How would your business tolerate such an increase, micro? Remember that it affects even businesses that pay more that the minimum. First, the prices of components will rise. You may not pay your staff the minimum, but whoever makes your packing containers or cleaning supplies might.
Second, every employee's pay will suddenly be less attractive. In other words, if a business owner is currently paying an employee from across town a generous $17.50/hr to do something challenging, but the employee discovers that he can make $15/hr stocking shelves at the 7/11 next to his home, he may understandably demand more money, or quit!
I expect to see many businesses fleeing California in the near future. Some, like my brother's, will leave the United States. That should be great news for Puerto Rico and the Virgin Islands but not so good for the liberal havens here at home.
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