SCV WEIGHS PROS, CONS OF MINIMUM-WAGE HIKE.

Byline: SUE DOYLE Staff Writer

An agreement reached in Sacramento would give minimum-wage earners $1.25 more an hour in the next year-and-a-half, making California the nation's highest paying state for this base pay.

The measure is expected to win final approval and workers would see the increase in two phases -- first a 75-cent increase from today's $6.75 hourly wage on Jan. 1. The hike equals about $30 more per paycheck. An additional $20 per paycheck would come Jan. 1, 2008, when the wage increases by 50 cents more.

After twice turning down minimum-wage increases in the past, Gov. Arnold Schwarzenegger said on Tuesday that this agreement was possible because of today's thriving economy. He said the people who will benefit most from the agreement are the ones who helped the economy recover from its shaky days of the past.

``They are partially responsible for making the economy come back, and they should share in it,'' he said at a press conference in Sacramento.

The measure -- Assembly Bill 1835 -- was authored by Assemblywoman Sally Lieber, D-Mountain View.

The news was well received by minimum-wage earners such as Cruz Iniguez, a cashier at a Castaic doughnut shop. Living close to her job, Iniguez doesn't spend much on gas and will benefit from the slight boost to her pay. But at the same time, she wondered what that will mean for the prices in stores and restaurants -- businesses that will have to fork out more money to pay the employees these increases.

``I'll have more money, but everything else will go up, too,'' she said.

However, prices for food, gas, rent, clothing and many more expenses have also gone up significantly since 2004, the last time minimum-wage earners saw an increase to their base pay.

Chief economist Jack Kyser, of the Los Angeles County Economic Development Corporation, said the move will certainly help minimum-wage workers, who have felt the pinch in their paychecks through the years.

``It'll probably move them a little away from the edge,'' he said. ``But will it move them into a solid economic position? Probably not.''

Kyser said the overall effect won't have a huge impact on the economy but that it will likely hit specific industries, such as restaurants and apparel, where business owners, especially smaller ones, could pass the cost of increased wages on to consumers.

Quiznos shop owner Arvind Talwar said his sandwich joint has already felt the pains from increased gas prices, and he knows the minimum wage increases will also have repercussions for his Castaic store.

These days, customers are making small sacrifices in his store to pay for gas and are buying less food than in the past and are ordering free tap water instead of sodas. He knows prices for the sandwiches and chips in his store will increase to accommodate higher pay for his minimum-wage earners.

``They don't need to raise minimum wage,'' he said. ``They need to drop gas prices, so people can afford more.''

Down the way inside Dollar 'N Beyond, owner Mariam Habis wonders how long she'll be able to keep prices close to $1, with the costs of overhead, gas and now employees surging.

She said the increase to minimum wage is certainly fair, but at the same time those workers will soon be in the same situation they are today, as prices for the goods they buy will also rise.

``To go up in minimum wage is understandable, but everything else will go up,'' Habis said.

Sen. George Runner, R-Lancaster, opposes the minimum-wage hike because of the potential loss of entry-level jobs. He said it could force employers to make decisions about hiring employees or replacing them with automated services, such as self-serve lines in grocery stores, movie theaters and airlines.

``We're beginning to see more and more of that as labor becomes more expensive and technology becomes less expensive,'' he said.

But to 19-year-old Marissa Martinez, the increase has definite appeal. Earning minimum wage at her cashier job at an arts-and-crafts store, the Canyon County teen quit her job because there wasn't much left to her paycheck after taxes and paying for gas.

Now she baby-sits for fun money to spend however she wants. She said it was a good business decision, because she has more money in her pocket now than in her cashier days.

``I used to work for $6.75, and that's nothing,'' she said. ``It's a waste of time.''

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CAPTION(S):

2 photos

Photo:

(1 -- color) Mariam Hasis, owner of the Dollar 'N Beyond in Canyon Country says she wonders how long she'll be able to keep prices close to $1, with the costs of overhead, gas and now employees surging.

(2) Marissa Martinez, 19, of Canyon Country says she might go back to work if the minimum wage is increased.

David Crane/Staff Photographer