For 16 years, Roland Cook charged restaurant customers $2 for a drink with free, unlimited refills.

But that changed last year, when Cook and his wife, the owners of ROC’s Firehouse Grille in Palm Desert, increased their non-alcoholic beverage prices to $3 each.

The price bump is one way the restaurant is adjusting to the statewide minimum wage, which will creep up from $10 in 2017 to $15 an hour for all workers by 2023. Cook is raising wages for his own workers and facing higher prices from vendors doing the same.

“Without an increase in revenue, something has to give,” he said.

On January 1, the minimum wage in California will rise from $11 to $12 per hour for businesses with more than 25 employees and from $10.50 to $11 for smaller businesses.

Proponents say the incremental increases are a long-overdue boost to the 5.6 million California workers projected to get a raise, either directly or because of the ripple effect for workers making a little more than the minimum – and good for businesses, too, since more money in the pockets of workers stimulates consumer spending and reduces employee turnover. Critics of the policy say rising wages will spur employers to hire fewer workers, cut the hours of existing workers or, like Cook, raise their prices. They warn that raises for employees will accelerate the automation of the jobs filled by low-wage earners today.

Although previous economic studies have tracked the impact of minimum wage hikes in specific cities, it’s still early to measure how the minimum wage increases in California are affecting the economy.

Nonetheless, in July 2018, the Legislative Analyst’s Office published research showing the two lowest-paying occupation groups in California – food preparation and service, and farming, fishing and forestry – saw the biggest wage growth in the state between 2013 and 2017 roughly tracking minimum wage increases. The LAO research also suggested minimum wage increases boosted wages for better-paid workers making $3 per hour more than the minimum.

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A handful of local employers in the Coachella Valley said their businesses have weathered the increases in different ways.

Alma Gutierrez, whose family owns Plaza Garibaldi restaurant in Coachella, said the impact on the business to date has been far from drastic. Before 2017, she said, the minimum wage was not enough to support a single person, never mind a family.

“As an employer you know your staff deserves to be compensated well for their efforts,” she said. “Especially in the customer service/food industry where days can be both physically and mentally draining.”

Plaza Garibaldi increased some prices this year, she said. The business also had an unusually steady summer, a time when sales typically slow.

“Although the wage increase is not entirely the cause, we feel it may have something to do with it,” Gutierrez said. “Our staff and other minimum wage workers are earning more and are able to consume more.”

Nearly a third of all workers affected by the $15 minimum wage are retail and food service workers, according to an analysis by the University of California Berkeley Labor Center.

Brandon Weimer, a co-founder of Rancho Mirage food maker Brandini Toffee, plans to continue paying employees at least a dollar above the minimum wage.

“It’s a feel-good benefit to working for our organization,” he said, “and we want to have a competitive advantage.”

At the same time, growing Brandini Toffee is “a very expensive and exhausting process,” he said, and rising wages put pressure on small businesses like him.

“I just know that our workforce is the backbone of our organization,” he said, “and therefore I think they deserve to make a fair living.”

For some larger employers, the minimum wage hikes have had a negligible effect. David Kowalczyk, the vice president of human resources at Eisenhower Health, said fewer than 40 of the hospital’s more than 3,800 employees are earning minimum wage. Amazon, which employs 18,000 people in the Inland Empire and recently announced plans to open its latest fulfillment center in Beaumont, announced in October it would pay employees at least $15 an hour.

Christopher Thornberg, founding partner of the Los Angeles research and consulting firm Beacon Economics, said he has discovered relatively small effects in research into the impact of the minimum wage increases so far.

“What we’re finding is, it’s clear that the minimum wage has an impact on employment in certain industries, but the broader health of the economy is so good that it doesn’t matter much,” he said.

When SB 3, the law creating the new minimum wage schedule passed in 2016, Thornberg predicted that lower-income workers with fewer skills would be impacted most by higher consumer prices, as well as by any cuts to jobs or hours resulting from minimum wage hikes. He also criticized the statewide wage floor as a “one-size-fits-all,” forecasting that the change would slow growth more in less expensive, inland economies than in pricier coastal communities.

Ken Jacobs, chair of the University of California Berkeley Labor Center, said research shows large benefits for workers, with comparatively smaller effects on the number of jobs or hours of jobs being offered as well as prices – including in the restaurant industry, where a larger proportion of workers make minimum wage.

Then again, he said, in places where housing prices have risen dramatically, “$15 an hour still won’t meet basic needs” for families.

One indicator suggests that could be the case in Riverside County. According to the Living Wage Calculator, a tool developed at the Massachusetts Institute of Technology, two adults working full time in Riverside County would have to earn $17.81 an hour each to support a family of four. That’s the equivalent of each adult making $37,000 a year.

Amy DiPierro is the real estate and business reporter at The Desert Sun in Palm Springs. Reach her at amy.dipierro@desertsun.com or 760-218-2359. Follow her on Twitter @amydipierro.