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Sunday, April 21, 2024

Effects of California’s minimum wage law


UC Davis eatery raises prices in response to minimum wage increase

In January, the minimum wage in California increased from $10.50 per hour to $11 per hour for businesses with 26 or more employees. This change, though it may seem minute, does have significant effects on UC Davis employees.

The CoHo, a well-loved campus dining staple managed by the Associated Students Dining Services, employs over 250 students. Darin Schluep, the food service director of ASDS, projects that because a majority of the Coho employee base is comprised of students, the minimum wage will have a substantial impact on the CoHo’s overall labor operations.

“The new minimum wage has not changed the way the Coho is being operated on a day-to-day basis, but it is impacting our labor cost,” Schluep said in an email. “Because a vast majority of our employees are students, whose pay is directly tied to the minimum wage figure, a $0.50 per hour increase in the minimum wage equals approximately $150,000 more in labor costs over the course of a year.”

The CoHo management team decided early on that it needed to slightly modify the prices on many CoHo products this year in order to reflect the higher minimum wage.

“We adjusted the Coffee House, the CoHo South and BioBrew pricing at the beginning of January to offset the costs of the increased minimum wage,” Schluep said. “This was a fairly across-the-board adjustment, but a few items, such as coffee and tea, were not included in the price increase.”

According to Schleup, the CoHo’s consumer base, which consists of mainly students trying to dine on a tight budget, has responded quite positively to the price increases.

“The customer feedback that has been gathered up to this point has been fairly understanding,” Schluep said. “I think it helps that our prices are still, even with a modest increase, extremely competitive and budget-friendly.”

California’s law is set to raise the minimum wage $1 each year until it progressively reaches a minimum wage of $15 per hour by 2022. In response to this law, Schluep and the CoHo management team expect to institute major changes over the next few years in regards to revenue, pricing and overall efficiency.

We are taking a multi-faceted approach to the increase in minimum wage over the next four years,” Schluep said. “We are not only looking at gradual price increases, but also [at] how we can better maximize efficiency in the kitchen, leverage some of our buying power and take advantage of some labor-saving technology to keep our costs down. We will attempt to balance these opportunities with our guiding principle of employing as many UC Davis students as possible.”

Kelli O’Day, a production manager and sustainability coordinator for the Associated Student Dining Services, believes that CoHo products are still reasonably priced despite the minor price increases.

“All of the CoHo products are still fairly priced, especially compared to other food operations on campus,” O’Day said. “The management team considered the heavy impact of price changes on students and put a lot of thought into which items would increase. You’ll notice that we only increased items that were necessary and opted to keep our drip coffee the same price.”

Some students, however, disagree with this sentiment. Jacqueline Allen, a fourth-year psychology major, argues that the price increases can and will have detrimental effects on students who are barely getting by as it is.

“I think that we’re all struggling college students for the most part, so I don’t necessarily think it’s fair to increase prices when a lot of us are going off a limited income,” Allen said.

Allen said that if future price increases become too taxing, she will have no choice but to turn to dining alternatives.

“The [price increases] are definitely discouraging,” Allen said. “I might have to find options elsewhere if it starts to impact me financially.”


Written by: Emily Nguyen — features@theaggie.org




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