The cost of labor continues to increase throughout San Diego. This affects many industries that rely on labor to provide services, including the landscape industry. Read more to learn about how the rising cost of labor and changes in minimum wage can affect you.
San Diego Minimum Wage Increases
In 2016, San Diego City voters approved a referendum to boost the city’s minimum wage first to $10.50 then to $11.50 as of January 1, 2017. This wage increase put the City of San Diego above the current California state minimum wage and effectively gave the city a head start in California’s plan to increase minimum wage to $15 by 2023. Since 2015, San Diego City has increased the minimum wage by 44% from $8 to $11.50. The next minimum wage increase for San Diego City will come on January 1, 2019, and every year following.
And San Diego County (excluding the City of San Diego) will steadily increase minimum wage by $1 each year from 2019-2023. By 2023, minimum wage will reach $15 and have increased 88% in eight years. That’s like your $4 cup of coffee increasing to $7.50!
Minimum Wage Increases Affect All Salaries
Minimum wage increases don’t just affect labor costs for minimum wage workers. Increasing the minimum wage creates a chain reaction across all levels of pay, whereby all labor costs increase throughout a business. Over these last few years, companies that rely on entry-level labor have had to adapt to the rising cost of doing business and a decrease in profitability. The rise in labor costs greatly impacts landscape companies because this industry is built on labor. For example, the price of a hamburger won’t increase in parallel with labor cost increases because the hamburger price is based mostly on the material (beef, bun, etc.) with only a small portion of the price going to labor. Landscape maintenance, however, is basically all labor. So when labor costs go up, the price of the service has to increase, too.
San Diego’s Competitive Labor Market
The situation is compounded by the fact that entry-level service wage industries are competing for employees in a tight labor market, making it more expensive to attract and retain top talent. The landscape industry in particular faces tough competition when it comes to finding workers. It becomes a delicate balancing act for companies to deliver top-tier service to their clients while also offering competitive pay and benefits to their employees.
Rising Cost of Labor Results in Price Increases
Inevitably, the rising costs of operating a service business will be passed on to customers. Heaviland Landscape Management works hard to find efficiencies within our business and pass those savings onto our clients. But at a certain point, we will have to increases prices to maintain a viable business operation. Doing business in San Diego is getting more expensive as both minimum wage and competition for labor increases. Knowing this, it’s important that both providers and customers prepare for price increases.
We’re Here to Help Care for Your Commercial Property
Heaviland offers commercial landscape management at competitive prices. We can work within your budget to provide tailored services and give you, the property manager, peace of mind. Give us a call today at (760) 598-7065 to get started. You can also download our free Annual Landscape Budget Template to plan for any price increases or unforeseen costs in the coming year.
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