Sister Toldjah:
“But at least they raised the minimum wage!”
Perhaps they didn’t want to be left behind by their progressive friends in Seattle, but the California State Senate last Wednesday passed a bill that would raise the minimum wage to $13 per hour by 2017. From thelegislative analyst’s summary:
SB 935, as amended, Leno. Minimum wage: annual adjustment.
Existing law requires that, on and after July 1, 2014, the minimum wage for all industries be not less than $9 per hour. Existing law further increases the minimum wage, on and after January 1, 2016, to not less than $10 per hour.
This bill would increase the minimum wage, on and after January 1, 2015, to not less than $11 per hour, on and after January 1, 2016, to not less than $12 per hour, and on and after January 1, 2017, to not less than $13 per hour. The bill would require the automatic adjustment of the minimum wage annually thereafter, to maintain employee purchasing power diminished by the rate of inflation during the previous year. The adjustment would be calculated using the California Consumer Price Index, as specified. The bill would prohibit the Industrial Welfare Commission (IWC) from reducing the minimum wage and from adjusting the minimum wage if the average percentage of inflation for the previous year was negative. The bill would require the IWC to publicize the automatically adjusted minimum wage.
The bill would provide that its provisions not be construed to preclude the IWC from increasing the minimum wage to an amount greater than the calculation would provide or to preclude or supersede an increase of the minimum wage that is greater than the state minimum wage by any local government or tribal government.
The bill would apply to all industries, including public and private employment.(h/t California Political Review)
“Leno” is Senator Mark Leno, whose district includes, naturally, San Francisco. You can kind of guess his politics. (He also backed a bill allowing children to have more than two parents. Yes, you read that right.) He’s also a prime example of Thomas Sowell’s observation about politicians who don’t have to suffer the consequences of decisions they impose on others. In this case, causing the cost of labor to skyrocket forces business owners to decide whether to pass on the cost to consumers, cut workers’ hours or whole jobs, or go out of business. As the head of CKE Restaurants told CNBC, people are doing all three:
CKE Restaurants’ roots began in California roughly seven decades ago, but you won’t see the parent company of Carl’s Jr. and Hardee’s expanding there much anymore.
What’s causing what company CEO Andy Puzder describes as “very little growth” in the state?
In part it’s because “the minimum wage is so high so it’s harder to come up with profitable business models,” Puzder said in an interview. The state’s minimum wage is set to rise to $9 in July, making it among the nation’s highest, and $10 by January 2016.
In cities in other states where the minimum wage has gone up considerably, Puzder said “franchisees are closing locations” after riding out lease expirations.
If the federal minimum hourly pay shoots up to $10.10 from the current $7.25—as many lawmakers and President Barack Obama are advocating—Puzder predicts fewer entry-level jobs will be created. If this happens, CKE would also create fewer positions, he forecast.
A recent nonpartisan Congressional Budget Office study also predicted mass job losses, estimating that a hike to $10.10 could result in a loss of about half a million jobs by late 2016, even as it lifted many above the poverty line.
(h/t California Political Review)
For some reason, I don’t think those who lose their jobs because of the wage increase will see themselves as “lifted out of poverty.”
Minimum-wage jobs are not meant to be lifelong careers. For people just entering the labor market, they’re ways to acquire skills needed to move on to better-paying jobs. For others, they’re a means to bring in additional, supplementary income into the household. The pro-increase arguments distort facts and wrap them in myth, all to disguise what is really a wealth redistribution program.
When California demands federal tax dollars to avoid bankruptcy, I pray the remaining 49 send them a giant raspberry…..
Do the California politicians really want the state to survive? It seems they are doing everything they can to destroy it.
Won’t be longer before CA will be a ghost state. Those living there will wonder why high taxes and a high minimum wage chased away all of the employers.
California might be a ghost state anyhow and it’s showing up where I live. Dozens of businesses sit empty and the for sale signs on houses are popping up like mad again. The problem is that new jobs here are going for $10 per hour while rent is $900 a month for a dump. After groceries, taxes, utilities, insurance etc., the cost of living is too high for the wages so people are moving out. Skilled work is about $15 per hour.
As for businesses, the problem is rent increases, not wages. If most of the money is going to be paying the rent for housing, the new businesses can’t get the money to pay the leases which keep going up even while the building sits empty. One example is a 4,600sq ft empty building with a rent of $87,768 per year. A 5% increase in rent is $4,388 which is the equivalent of giving four guys a 52 cent per hour raise.
June 2, 2014
Surprise! $15 an hour minimum wage backfires
Thomas Lifson http://americanthinker.com/blog/2014/06/surprise_15_an_hour_minimum_wage_backfires.html
It turns out that leftists can’t repeal the law of supply and demand. In the Seattle suburb of Seatac, adjacent to the airport and full of parking lots, hotels, and restaurants with many low wage employees, the minimum wage was hiked to $15 an hour, and the results of this social experiment are coming in. United Liberty reports:
A February report from the Seattle Times revealed:
At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe…
Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small “living-wage surcharge” for a daily parking space near the airport.
That’s not all. According to Assunta Ng, publisher of the Northwest Asian Weekly, some employees are feeling the pinch as employers cut benefits. She recalls a conversation she had with two hotel employees who have been affected by the wage hike:
“Are you happy with the $15 wage?” I asked the full-time cleaning lady.
“It sounds good, but it’s not good,” the woman said.
“Why?” I asked.
“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.
The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.
What else? I asked.
“I have to pay for parking,” she said.
I then asked the part-time waitress, who was part of the catering staff.
“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.
In my hometown of Berkeley, “activists” are pushing for a referendum to raise the minimum wage to $15. I assume it will pass. And then we will see restaurants raising their prices and some closing. The McDonald’s outlet in downtown Berkeley frequently hosts “members of the homeless community” (I think that’s the preferred nomenclature these days, but I could be behind the times). If it raises prices, people with cars can drive over to Oakland or other burgs to get their Big Macs more cheaply, but the homeless can’t afford bus fare, or a ticket on the BART train. Oh, the unfairness of it all. And if all the cheap restaurants close or raise prices, they will have no place to spend their panhandling income.
It turns out that leftists can’t repeal the law of supply and demand. In the Seattle suburb of Seatac, adjacent to the airport and full of parking lots, hotels, and restaurants with many low wage employees, the minimum wage was hiked to $15 an hour, and the results of this social experiment are coming in. United Liberty reports:
A February report from the Seattle Times revealed:
At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe…
Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small “living-wage surcharge” for a daily parking space near the airport.
That’s not all. According to Assunta Ng, publisher of the Northwest Asian Weekly, some employees are feeling the pinch as employers cut benefits. She recalls a conversation she had with two hotel employees who have been affected by the wage hike:
“Are you happy with the $15 wage?” I asked the full-time cleaning lady.
“It sounds good, but it’s not good,” the woman said.
“Why?” I asked.
“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.
The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.
What else? I asked.
“I have to pay for parking,” she said.
I then asked the part-time waitress, who was part of the catering staff.
“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.
In my hometown of Berkeley, “activists” are pushing for a referendum to raise the minimum wage to $15. I assume it will pass. And then we will see restaurants raising their prices and some closing. The McDonald’s outlet in downtown Berkeley frequently hosts “members of the homeless community” (I think that’s the preferred nomenclature these days, but I could be behind the times). If it raises prices, people with cars can drive over to Oakland or other burgs to get their Big Macs more cheaply, but the homeless can’t afford bus fare, or a ticket on the BART train. Oh, the unfairness of it all. And if all the cheap restaurants close or raise prices, they will have no place to spend their panhandling income.
We left CA 15 months ago.
Empty storefronts out-numbered businesses on most main drags.
Empty, even abandoned homes, condos and apartment buildings meant gangs taking over, stealing electricity and water from neighbors and setting up their illegal activities.
In Utah, the minimum wage is lower but, as a result, most people are working.
There is the occasional empty storefront, but it usually has a ”Coming Soon,” sign in the window.
People manage on lower income because prices are lower, too.
CA could take a lesson.
But it won’t.