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Katy Grimes

California’s Department of Business Prevention Strikes Again: Another Minimum Wage Hike

From the State of California’s Department of Business Prevention comes another random minimum wage hike to help kill off more businesses.

The final phase of the 2013 Assembly Bill 10 went into effect Jan. 1, bumping the minimum wage to $10-per-hour statewide. AB 10 is the final step of a two-stage increase. California and Massachusetts are now the states with the highest minimum wage. Only California is also home to the highest income taxes, sales taxes, and high property taxes.

Bureaucrats Interfere

Work should be valued only between those who provide it and those who pay for it. Those of us who labor in the real world, revere free market principles, and are used to dealing with reality, know the minimum wage is arbitrary and nothing more than a vote-getter for liberals.

Bureaucrats’ and liberals’ delusions of equality have no place in the wage department – particularly since most have never signed the front of a paycheck before. The other problem with bureaucrats making decisions about wages is they don’t understand that private sector employers have limited money to spend on labor – unlike the unlimited finances (other people’s money) spent by government on labor. When private sector employers are forced to unnaturally increase wages, something else must be cut from the business.

Minimum wage employees are only worth what an employer will pay for the work, and nothing more. Many minimum wage workers are trainees. Many are entry-level, unskilled employees. And many aren’t worth the minimum wage they are currently paid – at least not until they master the job and begin to take on new skills.

I used to employ hundreds of people. If the unskilled workers cost the company more every year because of government-induced wage hikes, but they delivered the same amount of work product, I was forced to cut other unskilled workers’ jobs, and require that everyone do more. The decision to increase wages was taken from me by the government, who rewarded all minimum wage workers with pay increases, and not just the good ones.

Economists Put Limits on Minimum Wage

Most Economists agree that increases in the minimum wage end up reducing employment opportunities for unskilled workers – especially large minimum wage hikes like Seattle’s at $15 per hour, and San Francisco’s at $12.25. Berkeley city council even recently considered bumping its minimum wage to $19 an hour, which would have made it the highest in the country.

There are some benefits of minimum wage increases, but only to some workers – those who get to keep their existing job and receive the higher wage. But there are more downsides to artificially high minimum wages as we’ve already seen in Seattle and San Francisco – layoffs. And sadly, the layoffs are of the less-skilled minimum wage workers, who will have a more difficult time getting and keeping another job.

Sacramento Nitwits Increase Wage Even More

Democrats in the California Legislature have been pushing for years to increase the state minimum wage to $15 per hour.

Only 18 months ago, California’s minimum wage increased to $9 an hour.

The minimum wage increased to $10 per hour on Jan. 1, 2016.

Not to be outdone by state lawmakers, the Sacramento City Council passed a new ordinance increasing the city’s minimum wage:

– $10.50 by 2017
– $11 by 2018
– $11.75 by 2019
– $12.50 by 2020

Despite opposition from labor leaders and owners and managers of small businesses, the city council passed the increases. Not one business owner is on the council.

Relles Florist, a renowned Sacramento business for nearly 70 years, Revolution Wines, and the Esquire IMAX Theatre testified against the proposal. “’This change will add $100,000 to our bottom line,’ said Doug Link with the Esquire IMAX, adding that the theater has barely broken even over the past 15 years,” the Sacramento Bee reported.

“Another speaker, Brenda Ruiz, criticized the City Council for presenting an altered plan the day of the vote. ‘Are we going to draw it up right now?’ she asked. ‘Let’s get out the cocktail napkins and some Sharpies. I would have no problem if they raised the minimum wage where I am. I’d just dump half of my employees and tell the other half to either work harder or join the ones I dumped. Problem solved.’”

Feds Want Increase

The current federal minimum wage is $7.25. President Obama has made no secret that he wants it increased to $10 per hour. By seeking to increase the federal minimum wage, the Obama administration is admitting that there is inflation – something they’ve vehemently denied. Some workers’ rights groups have turned their attention to the Obama administration, and recognize that its economic policies have hurt the lowest paid workers in the U.S. more than any group. 

While Georgetown University professor Harry Holzer agrees with Obama on the hike to $10 per hour, Holzer draws the line there. “Lately minimum wages have risen too high to $15 an hour in some cities,” Holzer wrote. Holzer is a Democrat, and worked in the Clinton administration as a top labor economist.

Holzer said that while the increase might work in a few cities, as a national policy “such increases are extremely risky.”

There are 7 million men between the ages of 25 and 54 who are unemployed or have stopped looking for work. They are rewarded with welfare and food stamps, federal healthcare subsidies, and virtually free health care through Medi-Cal in California, and Medicaid in other states – rather than opportunities to work.
This is Obama’s America, and Gov. Jerry Brown’s California. Increasing the minimum wage $1 per hour will hurt businesses and job seekers far more than it will help.

California doesn’t need higher minimum wage; we need the path cleared of regulations for businesses, to allow them to invest as they deem fit and raise wages as they decide they can afford.  This would also help encourage the unemployed to get out and look for work. Former President Ronald Reagan was able to create so many more jobs than the Obama administration in a much smaller economy because of his free market ideals, and a reliance on private sector decisions to guide real recovery.

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