California governor Jerry Brown has proposed a $15 minimum wage by 2022.
If the legislation passes, it will wreak havoc on city budgets, state
budgets, businesses, and jobs.
Please consider California Moves Toward $15-an-Hour Minimum Wage.
Gov. Jerry Brown’s administration has told leaders in the
Democratic-controlled state Legislature he supports boosting the state’s
minimum wage to $15 by 2022, a person familiar with the matter said. The
approach would give the governor some control over an issue that looked set
to be decided directly by voters in November.
Moving ahead with the plan would give the most populous U.S. state the
nation’s highest minimum pay floor. The minimum wage in California is now $10
an hour, already one of the highest of any state, though some cities have set
higher minimum levels.
Gov. Jerry Brown’s administration has told leaders in the
Democratic-controlled state Legislature he supports boosting the state’s
minimum wage to $15 by 2022, a person familiar with the matter said. The
approach would give the governor some control over an issue that looked set
to be decided directly by voters in November.
Moving ahead with the plan would give the most populous U.S. state the
nation’s highest minimum pay floor. The minimum wage in California is now $10
an hour, already one of the highest of any state, though some cities have set
higher minimum levels.
States appear to be the next battleground. Lawmakers in New York are in
advanced discussions to bring that state’s minimum wage to $15 an hour, from
$9 now. Gov. Andrew Cuomo, a Democrat, is trying to include a vote in the
Legislature on the measure as part of the state’s budget, due April 1,
although details are still under negotiation.
The proposed increases have met resistance from business groups and
Republicans—including presidential front-runner Donald Trump—who say they
will lead to fewer jobs for low-skilled Americans. Critics say they are an
inefficient way to help the poor, as many minimum-wage earners are
high-school students or others without dependents.
Of particular concern is the magnitude of the proposed increase. Previous
hikes have generally been more gradual, and large swaths of big states like
California have a low cost of living and fragile economies.
“I think there’s going to be job loss everywhere,” said David Neumark, an
economist at the University of California, Irvine. “You get out of the big
cities and California is not a rich place at all.”
The plan, which was outlined to legislative leaders by Mr. Brown’s office
last week, would raise the wage from $10 an hour to $10.50 on Jan. 1, 2017,
followed by a 50-cent increase in 2018, the person familiar with the proposal
said. Yearly $1 increases would continue through 2022, the person said.
Minimum Wage Hikes Kill Jobs
Proponents of such legislation claim hikes don’t hurt jobs. They point to
job growth and studies as proof.
However, it’s a mindless argument, because no one can prove what would
have happened had there not been wage hikes. The fact of the matter is
employment goes up over time simply because of population growth.
Cities and municipalities will be affected, even poor cities that can
least afford such wages.
Stores that are marginally profitable at one pay scale many not be
marginal at another. Businesses can raise prices the proponents says.
If prices go up, those on fixed income will get clobbered.
Already there is pressure on businesses to automate workers away. This
move is guaranteed to increase the pressure on businesses to automate; it’s
guaranteed to slow the expansion of retail stores and restaurants; it’s
guaranteed to slow the growth in jobs, and it’s guaranteed to put pressure on
cities to raise taxes.
Logically speaking, there’s not a single good thing one can say about
forcing the minimum wage up to $15.00.
Mike “Mish” Shedlock
