BUSINESS WATCH:

Newport-Mesa’s lowest-paid workers will get a boost in their paychecks this year, as California raised its minimum wage Jan. 1 to the second-highest of any state in the U.S. That didn’t come as good news, though, to Jim Walker, the owner of the Bungalow Restaurant in Corona del Mar.

Walker, who also co-owns a restaurant in Long Beach, said his eateries go through tough times whenever the minimum wage goes up, as it did at the same time a year ago in California. When restaurants have to pay their entry-level workers more, he said, they have to increase other wages to keep pace — and unless they want to raise the menu prices, that means a drop in revenue.

“I think, in the economic climate we’re in, most restaurants are reluctant to raise their prices, so it just comes out of profit,” Walker said. “It’s going to lower the profits by $2,500 a month.”

The Bungalow owner wasn’t the only business leader in town unhappy with the latest hike in the minimum wage, which resulted from 2006 state legislation that increased the rate by 75 cents last year and 50 cents this year. California’s $8 minimum wage now ranks alongside Massachusetts’ as the second-highest in the nation, behind $8.07 in Washington state.

Ed Fawcett, the president of the Costa Mesa Chamber of Commerce, and Richard Luehrs, the president of the Newport Beach Chamber of Commerce, both said the 50-cent increase would do little to help entry-level workers and would damage the economy in a greater sense by speeding inflation.

“I don’t believe there truly is a gain on the minimum-wage worker’s side of it,” Fawcett said. “I was there at one time many years ago earning minimum wage and, to me, minimum wage was a starting point. It wasn’t designed to be a living wage from my perspective. It was a springboard to my future. So I didn’t take it like, ‘I have to raise a family on this.’ Some people think every job has to be able to sustain a family of four, which is ridiculous.”

Luehrs said the increase would only benefit workers for a short amount of time, since other expenses would soon rise as well.

“The cost of a meal goes up,” he said. “The cost of retail goes up. Everything follows the minimum wage.”

For the moment, though, minimum-wage employees around town said they were happy to pocket a few more dollars a week.

“It pays the bills, I guess,” said Amanda Faust, a server at the Zinc Cafe and Market in Newport Beach. “An extra trip to the movies or something.”

MICHAEL MILLER may be reached at (714) 966-4617 or at [email protected].