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  • felizardogaxiola

Lower unemployment & higher wages. What can you do?

Updated: Jul 29, 2020

The California unemployment rate held steady at 4.3% in April 2019, according to the state’s Employment Development Department. Also, wage growth in California picked up, average hourly earnings grew by 5.2%, and wage growth has topped 5% every month of 2019.  Great! right?...

Well… not if you consider the rapidly increase in minimum wage of $15 per hour by 2022—a 50% hike over 2012. A recently released study by the University of California Riverside, demonstrates how California’s perhaps well-meaning minimum wage policies produce underwhelming results at best—but more typically create corrosive side effects for business owners. It shows how many businesses have attempted to pass along the rise to customers and have been forced to close operations after the cost hike.

Why is this affecting business owners?

Simple, with low unemployment rates the minimum wage is not an option. In other words, the supply of labor is greater than the demand, and in such a tight labor market, employers typically need to pay higher wages to attract employees.

Increasing the cost in wages should lead to higher prices for products and services in an economy, ultimately pushing the overall inflation rate higher, and increasing product prices could affect competitiveness, especially in industries controlled by big corporations that can afford higher wages due to their economy of scale.

Regardless, it is hard to see minimum wage nowadays, and it is almost impossible to see minimum wage on professional and skilled workers, where is not uncommon to see $25+ per hour plus employer costs, compliance and legal responsibilities. This is one of the reasons most of the top corporations are outsourcing their admin duties as a business strategy.

At Bridge Solutions Group we specialize in creating teams for USA companies working remotely from our office at the California border, saving tens of thousands per year per employee and increasing productivity. But you might be wondering, how does this work? Simple, Bridge Solutions Group acts as a Staffing company and also host your staff in our operations facility located in Mexicali Baja, a border city with California, where the talent is less expensive and has a great cultural affinity with the USA. All our personnel are bilingual professional both English/Spanish and are able to travel to the USA for training purposes. Bridge process is simple and you don’t have to deal with all the legal, the outsourcing service is paid in California. Our only mission is to make sure your business can compete in the big leagues. 

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