Lost Coast Brewery founder and owner Barbara Groom recently went through the menu and raised prices on some dishes offered at the brewery’s cafe in Eureka.

Pacific Outfitters owner Aaron Ostrom looked at his staffing and did the math involving his budget for labor.

That’s how two local businesses are reacting to the next incremental increase in the state minimum wage, which takes effect Jan. 1.

“Every time (minimum wage increases), we have to increase (prices),” said Groom on Thursday afternoon. “We work on a very low margin. We can’t pay a $1 hour more increase.”

Ostrom said it comes down to the hours of work his business can afford to pay.

“Our budget for labor is our budget,” he said. “We can’t necessarily exceed that. If the wage goes up, we work with fewer people.”

Come Jan. 1, an estimated 24,000 residents in Humboldt County will see their paychecks increase with the next incremental increase in minimum wage as the state moves toward paying $15 per hour by 2023. Starting Jan. 1, businesses with 25 employees or fewer will pay $11 per hour; businesses with 26 employees or more will pay $12 per hour.

North Coast state Sen. Mike McGuire said the increase could help boost the economy.

“While this upcoming increase can be challenging to some small businesses, we also know the uptick in wages will put hundreds of millions of dollars to work in our economy and will help working families put food on the table and pay their rent in this red-hot market,” McGuire said in an email to the Times-Standard.

He added that the increase is a boost for families across the state.

“Income inequality is the highest it’s been in over four decades in America,” he said. “This alarming trend continues to grow and it’s hurting women and kids the most. Two-thirds of minimum wage earners in California are women and when women aren’t paid what they’re worth, families suffer.”

By 2023, minimum wage workers — regardless of the size of the employer — will all be paying a minimum wage of $15. The move stems from legislation passed under SB 3 in 2015.

The federal minimum wage is $7.25 per hour. It was last increased in 2009.

Under the rules, some salaried employees will also receive raises because the mandate requires those workers earn double minimum wage.

Ostrom said rules for salaried workers are complex in California and create a deterrent.

“New hires are getting closer and closer to our most established wage members,” Ostrom said. “… Really California is kind of anti-salary. It’s been more and more difficult with wage laws. We have been weaning people off salary and going to (hourly) wages. If there is overtime, that way we can pay them.”

Groom said her employees typically earn well in excess of minimum wage when tips are added in.

“We have to pay the waitresses minimum wage, but they make $30-$40 an hour (with tips),” Groom said. “They are not affected. The ones that are are the dishwashers and bussers.”

She added that some states have lower minimum wage rates for wait staff.

“That’s probably one of the big bones of contention with waitresses,” Groom said. “A lot of states, the minimum wage is lower for wait staff.”

Many states allow tipped employees to be paid a minimum wage of $2.13 per hour to account for the increase created by tips.

“But not California,” said Groom.

Ruth Schneider can be reached at 707-441-0520.