Analyzing the Implications of California’s Minimum Wage Raise


California’s minimum wage is now $15.50 per hour since the voter-approved Senate Bill 3 was enacted on Jan. 1, 2023. The increase is significant due to the state’s famously beautiful and notoriously expensive real estate and living expenses. The bill aims to ensure that low-wage workers in the state are able to afford basic necessities such as housing, food and health care.

Some believe that increasing the minimum wage will positively impact the economy as a whole. According to, when workers have more money to spend, they are more likely to spend it on goods and services, which in turn stimulates economic growth. Proponents of this increase asserted that it would improve the lives of millions of people, empowering many of the state’s lower-income workers. 

An increase in the minimum wage also offers part-time student workers increased earnings, which can significantly improve their financial situation and support these individuals in keeping up with the rising cost of living in California.  

“As a part-time worker, I feel that the economy will be more competitive, and getting jobs and internships will be more difficult. I have a couple of senior friends attempting to get a job, but they have lucked out,” senior Ivy Nguyen said. 

Nguyen indicated that this competition directly correlates to the future of the job market — as the minimum wage rises, more teenagers will be inclined to search for a job and apply to a variety of corporations.

Conversely, some critics argue that increasing the minimum wage will lead to higher costs for businesses, which could lead companies to cut jobs.  

Local boba shop, Mr. Sun Tea, said that in comparison to small businesses, larger corporations typically have more money in reserve. Larger companies also tend to have stronger branding names, so they naturally receive more business and money to pay a higher salary than the minimum wage. Additionally, large companies can easily outprice small businesses, making it harder for small businesses to hire and retain employees. For adolescents, this wage increase reduces student labor demand as employers may opt for more experienced and skilled workers. 

Mr. Sun Tea intends to offer a competitive salary compared to other stores in the area. As a small business, they stated that it is increasingly difficult to match the compensation of larger food chains like In-N-Out Burger or Starbucks. In response to the minimum wage increase, Mr. Sun had to slightly raise the prices of their drinks. 

“We also had to be cognizant of not drastically increasing the prices where they become a sticker shock to customers,” said Jennifer Menq, a representative of Mr. Sun. Some customers took notice of the pricing change on their menu and posted negative reviews on Yelp and Google. Mr. Sun Tea grapples with financial responsibility while trying to preserve the customer experience — some of which is attributed to satisfactory pricing. 

Oren Hummus also raised its menu prices recently by around 2 to 5 percent in response to the minimum wage increase. The Vice President of Operations, Marcus Belardes, said, “As far as morale, I think workers are appreciative of the increase, but then again, in Silicon Valley, it actually doesn’t really make a dent in what their costs deliver.” 

Similarly, Be’Anka Ashaolu, Founder and CMO of Nirvana Soul, said their company increased its prices last year. She aimed to save on labor by working with her sister Jeronica Macey,  co-founder and CEO, along with their CFO, Dapo Ashaolu. Small business owners often run their businesses off the ground – meaning they do not pay themselves. Said Be’Ank Ashaolu, “We’re doing our best to operate lean but also ensure that our team is able to get enough hours to do what they need to do.” 

To gain a greater financial understanding, the CFO spoke on the minimum wage increase and its direct impact on Nirvana Soul. 

Minimum wage is a very divisive topic for small businesses. It can often mean a very unexpected expense increase, and I think a lot of times, people have a hard time separating small local mom-and-pop operations from large companies,” Dapo Ashaolu said. He conveyed that the issue is much more multifaceted than just increasing wages. Once inflation is incorporated, he said, it can leave people either in the same position or sometimes in even more inferior ones. He expressed that this problem must not just be looked at from one direction: a holistic view must be taken.

“How do we make housing more affordable so that the dollar raise does not just go into the landlord’s pockets? Or how do we ensure that education is affordable so that the extra money you’re getting is not just going to pay off student loans? And, in general, how do we transfer wealth from small businesses to large corporations and entities?” said Dapo Ashaolu.  

He instills the notion that the goal is not just to raise the minimum wage but to raise people’s standard of living.

Overall, the minimum wage increase in California is a positive step toward ensuring that low-wage workers in the state are able to afford basic necessities while also helping boost economic growth. Many Cupertino businesses expressed support for the minimum wage increase, arguing that it will lead to a more stable and productive workforce, ultimately benefiting their bottom line.