Local businesses unhappy with new legislation that raises CA minimum wage to $15 by 2022

FRESNO, Calif. (KFSN) -- A major victory for big labor Monday as Governor Brown signed legislation increasing California's minimum wage to $15 an hour by 2022.

The new law is expected to boost the income of more than five million people. But economists say low-income families aren't the only ones who will feel an effect.

From 7:30 a.m. to 5:30 p.m. every day the employees at Herndon Auto Service work hard for their pay. But very soon those hours could be cut.

"Instead of thinking how I am going to create more jobs-- now I'm thinking how am I going to cut my labor to survive," said Ricky Altero, business owner.

Altero said the new $15 an hour minimum wage is tough to stomach. Even though he already pays most of his employees more than that, he will still see costs go up.

"Every time labor goes up, everything goes up with it. Our workers comp insurance goes up-- we gotta pay more taxes."

The law is expected to raise the salary of every 1 in 3 people. But economists say in reality everyone will be impacted. Employers from school districts to the state government will probably have to start paying more too.

"Normally, if somebody has minimum wage, it's the minimum skill they need. So people coming out of college could usually be about two to two and a half times that amount because they now supposedly have the ability to manage people," said William Rice, professor.

Supporters cheered this morning as the Governor signed the bill into law. They said minimum wage will help working families overcome income inequality.

"It's about creating a little, tiny balance in a system that every day becomes more unbalanced," said Governor Brown.

But others fear prices will go up, hours will be cut, and jobs will disappear.

"It's going to cause a lot of heartaches. You'll have a lot of small business people thinking, 'How am I going to do this,'" said Rice.

A delicate balance that Altero said he is trying to figure out.

"Some guys just don't wanna work. And now we got the good guys and the bad guys and we are paying the same for each of them-- and I think that is unfair."

Businesses Action News they will also be less likely to hire people with little experience. Because the starting salary-- or new minimum wage-- is too high to pay for their skill level.