California’s Minimum Wage

It’s already devastating the restaurant industry, and it hasn’t even fully kicked in yet:

Christopher Thornberg, director of UC Riverside’s Center for Economic Forecasting and Development, told the San Bernardino Sun that politicians should have adopted a regional approach. He said it would been better to adapt minimum-wage levels to varying economies – something like the Oregon model, the nation’s first multi-tiered minimum-wage strategy.

Oregon’s minimum-wage law is phased, with increases over six years. By 2022, the minimum will be $14.75 an hour in Portland, $13.50 in midsize counties and $12.50 in rural areas.

“That makes sense,” Thornberg told the Sun. “That’s logical.”

California is even more varied economically than Oregon. Thornberg believes hiking wages in blanket fashion will spark layoffs and edge low-skilled workers out of the job market.

It’s not “logical.” It’s just slightly less insane. And this is why a federal minimum wage is even more insane.

15 thoughts on “California’s Minimum Wage”

  1. We did the same thing as California here in Washington. The wage goes up a little bit every year or so until it tops out at $15.

    I was having a discussion with someone in the employment industry and he said that only 3% of the jobs pay minimum wage so increasing the minimum wage wouldn’t matter. So then why do it?

    The reality of it is that those 3% would likely get pay increases through performance or longevity based raises. And many people make between $9 and $15, so the real number of jobs affected isn’t just the people making $9 an hour but everyone in between.

    Most people think of a wage increase as just the money that goes to the worker but fail to consider the taxes the employer pays as a percent of the wage. Depending on the job, the real cost to employers with a $15/hour wage is about $18-19.5 an hour.

    The same guy said he talked to a lot of economist and said none of them knew what would happen but at the time, there was a lot of data to look at from California and Seattle. Even now, it is having adverse impacts on business owners but our local media doesn’t cover it.

    1. I’m sure I also read that a bunch of union contracts set wages as ‘minimum wage + $X’, so their wages automatically increase when the minimum wage does?

      If true, that may be more than enough to explain the demands for increased minimum wage.

    2. They need to find a better economist. I advise avoiding ones given noble prizes or employed by the government. I fairly sure the government economist knew about the additional tax burden and was counting it as a guarantee, as if markets are steady state or something.

    1. and also have a massive social program for health, education, social services, unemployment, child benefits, state child care, supplementary benefits, education…

      and also, in effect, bring in the Universal Basic Income (means tested)

      1. They also have tax rates of 50-70+ percent to pay for all of that “free stuff”, combined with high prices for everything.

        1. Hmm state, federal, and local taxes often rise to 50%+ in the USA, why don’t we get more credit for our expansive government from the lefties?

        2. And the high Scandinavian tax rates start on about the first 1000 in income. By our standards, they have almost a flat tax, and tax the poor just about as much as the rich.

  2. I have a novel concept. Employers offer any wage they like and employees get to say no.

    That way, the guy willing to work for $8/hr doesn’t lose his job to someone only willing to accept more.

    The guy only willing to accept more does so because he’s spent the time to make himself more valuable to an employer.

    A living wage has nothing to do with offer and acceptance. An entry level job is not supposed to be something you live on. It’s supposed to be a stepping stone to something better. Remove low wage jobs and fewer people can make the leap beyond, which requires more than just education.

    Force a low level job to pay a living wage not only reduces the number of those jobs, but perhaps even more important, reduces an employees incentive to make themselves more valuable.

    What? That’s crazy talk. Evil employers must be forced out of business by paying employees more than they’re worth because the market is somehow unfair.

    Then again, it requires no laws, just people willing to have some regard for their own self worth and not expecting something for nothing (or as little as possible.)

    Next step, minimum wage and unfire-able.

    1. The ultimate goal is to push minimum wage so high that everyone–except our leftist overlords–will be paid the same. Then, and only then, will we have reached Equality Nirvana.

      1. It certainly makes sense that if everyone is equal they deserve equal pay for equal time served regardless of what they produce.

        All men person’s of indeterminate gender are created equal after all.

        Notice that some are born rich and some poor. There aught to be a law against evil rich people that aren’t the spawn of our ruling elite.

  3. Disregarding for the moment the stupidity of current minimum wage thinking in general…
    It’s typical of California to take an idea which might have a bit of merit, and then eff it up. E.g. the “3 strikes” rules. Most places which had made these part of criminal sentencing, had specified that the strikes had to be “serious” or “violent” felonies. CA (via voter initiative, IIRC) opted to make pretty much any felony a strike. This led (unexpectedly!) to fiascos like attempting to give a life sentence to a petty crook whose 3rd strike was shoplifting a piece of pizza while on parole.

  4. The desire for a $15 minimum wage is a result of high rental/home prices, food prices, education and health care prices.

    I will ask these proponents of a high minimum wage if it wouldn’t be better to lower those costs so their current wage is enough.

    Eyes blink, crickets chirp and they walk away. Our public schools have done a wonderful job at creating little Marxists.

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