Latest Headlines:   Minimum Wage Hike to Impact Restaurants, Smaller Motels BY RICHARD SPRINGER India-West Staff Reporter The state of California will have the highest minimum wage in the U.S. in January 2008, if a deal struck Aug. 21 by Governor Arnold Schwarzenegger and lawmakers is approved by the state legislature. Under the agreement, the minimum wage will increase by $1.25 an hour over the next two years from the current rate of $6.75 an hour to $7.50 by January 2007 and to $8 by January 2008. Schwarzenegger had pushed for just a $1-an-hour raise over two years, but compromised after Democrats dropped a demand for automatic annual increases to keep pace with inflation. Jag Kapoor of Kapoor Enterprises, the operator of Bonfare Markets, Mexicali Grill and the Una Mas fast food chain, told India-West that many fast-food outlets in the San Francisco Bay Area are already paying above $7.50 an hour. The impact, he pointed out, will be felt more by sit-down restaurants like Mexicali Grill, where waiters and other servers receive tips to supplement lower wages. Restaurant owners will "have to consider raising prices" if they have to pay more to workers who are paid less before tips are taken into account, said Kapoor, who is on the advisory committee of the California Grocers Association. Tom Nickel, the owner of O'Brien's Pub in San Diego, told the San Diego Union-Tribune that he is circulating a petition among local restaurateurs to get the governor and legislature to make an allowance for tips in the minimum wage bill, but he doesn't expect much success. "I feel like it's a doomed project," he said, adding he will have to pass on the costs of the wage hikes - which he estimated at more than $20,000 per year - to customers. The California Restaurant Association has warned that its members might lay off workers to compensate for the increased wages. And not all fast-food outlets in California pay more than $7.50 per hour currently. George Patel, who employs eight workers at a Subway sandwich franchise three blocks from the state Capitol, told the Associated Press that the minimum wage boost could force him to lay off some workers. "As the owner, I'm not very happy about it," he told AP. "Right now, I could not afford an extra $1.25. I would have to do layoffs. Over two years, maybe I could afford it. But I would be looking to increase productivity." Tarun S. Patel, director-at-large and treasurer of the Asian American Hotel Owners Association, told India-West that the impact would impact motel owners in the state mostly in small markets, where pay is not as high as it is in the San Francisco Bay Area. "It will depend on the geographical markets," he said, adding that the housekeeping positions will be the most affected. He said AAHOA has a procedure in place in case the members want to unite to express their opposition to the bill. Many California college students working on and off campus are likely to see pay raises resulting from the minimum wage increase, reported the Daily Bruin, the student newspaper at UCLA. Most Associated Students UCLA employees would receive a $0.75 increase by January 2007 and another $0.50 increase by January 2008, Bob Williams, director of ASUCLA, told the newspaper. ASUCLA, which employs over 1,500 students currently, pays its employees at least $7.50 per hour, and said it was already planning to increase wages. Most economists feel that an increase in the minimum wage generally has a minimal impact on employment levels, reported the Union-Tribune. "The bulk of the research, including the most credible studies, find that moderate minimum wage increases have no detectable effect on employment," said Alan Krueger of Princeton University, an economist and co-author of a book on the effects of minimum wage increases. Marney Cox, chief economist with the San Diego Association of Governments, told the Union-Tribune that the demand for workers in the U.S. is so tight that he doubts the rise in wages will lead to any job losses locally. "As it is now, there are lots of help-wanted signs for (low-wage) jobs," he said, adding that about 2.4 million workers in California now make less than $7.75 per hour. Six states - Alaska, Connecticut, Oregon, Rhode Island, Vermont and Washington - and the District of Columbia currently have minimum wages that are higher than California's. They range from $7 an hour in the District of Columbia to $7.63 in Washington State. The federal minimum wage floor is $5.15 an hour. New Jersey plans to raise its minimum wage from $6.15 to $7.15 an hour Oct. 1 and the Massachusetts legislature recently overrode a veto by Governor Milt Romney to increase the minimum wage to $8 in 2008. Oregon, Vermont and Washington increase their minimum wages annually to keep up with inflation. Schwarzenegger, who is seeking re-election, vetoed two previous attempts to raise California's minimum wage. "I have always said that when the economy was ready, we should reward the efforts of California's hard-working families by raising our minimum wage," Schwarzenegger said. "This is another sign California is coming back stronger than ever." The California Chamber of Commerce, which opposed proposals to increase the minimum wage, praised Schwarzenegger for "standing firm" against tying the minimum wage to inflation. "Raising the minimum wage is one thing, but locking in automatic increases year-after-year, regardless of the condition of the economy or the health of a business, is another entirely," Vince Sollitto, spokesman for the California Chamber of Commerce, told AP, adding that the chamber remains opposed to any wage increase. :by indiawest