Child-care assistant Eunice Medina, 23, was thrilled when Oakland's minimum wage took effect in March. But almost as quickly, Medina's workdays were cut and her hours shaved from eight to six.
Her employer, Asiya Jabbaar, says she had no choice. Despite slicing hours and laying off one of three assistants, Jabbaar says she still may need to close her business next year and convert it to a part-time after-school program.
It's a big letdown for the 38-year-old Jabbaar, who launched Reaching Beyond Care in 2010 from her East Oakland loft apartment.
Her experience illustrates what can happen to small employers when minimum wages jump suddenly. The effect on licensed or government-regulated entities, such as Jabbaar's, can be particularly sharp.
Because state law requires at least a 6-to-1 child-teacher staffing ratio for small home-based child-care providers, it's difficult to respond to higher wage costs by simply trimming hours or staff. And Jabbaar voluntarily adheres to an even stricter ratio of 3 to 1.
Similar business owners have responded by raising tuitions, asking parents to provide lunches and supplies, or simply closing down, says Richard Winefield, head of the child-care referral agency known as Bananas.
So while Oakland's new higher minimum wage may lure some stay-at-home parents back into the labor force, the irony is that they may face higher prices and fewer options when searching for child care.
Jabbaar worries most about maintaining high-quality staff if she's unable to offer steady pay raises. Before the wage hike, she started workers at $9, and every year bumped up their pay by a dollar or so, hoping to keep them satisfied and at their jobs until the next raise came around.
"There's no room for growth now," Jabbaar said on a recent morning as she cared for three 2½-year-olds. "It wouldn't be fair to keep [workers] at $12.25. They're at that cap."
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