Voters should reject the increase to California’s minimum wage on the November ballot.
The measure would push the minimum wage from $15 per hour to $18 per hour by 2026. If this happened in a vacuum, it might make sense. But it isn’t happening in a vacuum, doesn’t make sense and the unintended consequences make it simply bad policy.
Increases in the minimum wage can lead to higher prices for consumers and reduced hours and job loss for minimum wage workers – all of which undercut the modest wage gains.
Seattle, for example, passed a minimum wage increase in 2014 that University of Washington researchers determined led to a 9% reduction in hours, which cost workers a loss of $125 per month. The study also found a reduction in the rate these workers were hired.
This alone should give anyone pause.
Supporters of an increase in the minimum wage often dismiss the effect compulsory wage increases have on businesses by saying big companies can afford it. But the vast majority of private sector jobs come from small businesses, many of which operate on tight margins.
If a small business makes more money, it can afford to give its workers more money. But driving up labor costs while revenue stays stagnant leads to consequences that harm the very people minimum wage increases were supposed to help.
The private sector in California is hurting. In the past 18 months, California’s private sector jobs declined by 46,000. We should be supporting job creation, not finding new ways to make it collapse.
Supporters act as if minimum wage workers would not get a raise any other way. But minimum wage workers aren’t condemned to a lifetime of minimum wage work. I had many minimum-wage jobs when I was younger — In fact, I remember thinking everything would be alright if I could just get a job that paid $10 per hour.
I am happy to say I don’t work for the minimum wage today, thanks largely to upskilling, and it required no government intervention to get there.
My story is not uncommon. According to research published by the Legislative Analyst’s Office, the largest cohort of low-wage workers are those younger than 25. But as these workers age, the number of them working for the minimum wage drops significantly.
One troubling trend in LAO’s research is the persistence of those who don’t age out of the minimum wage. The second largest cohort of low-wage workers are those 50 years old or older.
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Who are these workers? Many are immigrants, since immigrants make up 40 percent of low-wage workers and might have a tougher time adapting to our economy.
Regardless of whoever they are, upward mobility is essential. Do they need upskilling? Language assistance? Determining precisely what challenges they face and then connecting them with the resources they need seems to be a much better use of time and energy than hurting them with the higher prices, job loss or reduced hours that come from the minimum wage.
On top of that, California lawmakers should focus on reducing the cost of living. It’s not so much that wages are too low as it is that expenses have grown too high. Build some housing or bring down energy costs. A nominal raise is fine but it does little to offset California’s exorbitant cost of living.
Voters should reject this proposal and demand real solutions.
Matt Fleming is an opinion columnist for the Southern California News Group and CEO of Sower Strategies, a digital marketing and public affairs firm.
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