Get free daily email updates

Syndicate this site - RSS

Recent Posts

Blogger Menu

Click here to blog

Jon Fleischman

When Arnold supports mandate government wage hikes, I am forced to remember the importance of playing defense…

Talk about taking the wind out of my sails.  I came home on Sunday from the State GOP Convention all pumped up for the Fall elections.  The Governor’s speech was great, and really fired me up.
 
The Governor asked the audience, "What do we say to more government control?"
 
The audience answered with a resounding "NO!"
 
Well, by agreeing to hike the mandated wage that California businesses, large and small, must pay employees, the Governor has said a resounding "YES" to more government control.  And that is exactly what has happenned – as Arnold Scharzenegger, without the support of our GOP legislative caucuses, has cut a deal with legislative Democrats to impose more government control on all California employers.
 
His support for hiking the minimum wage (to the highest in the nation) strikes right at the heart of those who believe that the size and scope and regulatory authority of government is too vast, and that at risk is the liberty of all Californians.  This ‘deal’ will impose another job-killing mandate (and that IS what will happen) on employers.
 
Anthony Archie of the Pacific Research Institute said in a recent column:

"The most well known distortion is the higher unemployment that results from minimum-wage laws. Setting the minimum wage above the level where employers and employees would have mutually agreed on labor services forces employers to cut back on the number of hires. This has been empirically documented in a half-century’s worth of economic research, most notably in studies on the fast-food industry. Beyond unemployment, the labor market is distorted in other, more indirect ways."

And nobel prize winning economist Milton Friedman says about mandating wage increases on employers:

 "Minimum wage laws cost jobs. Employers cut out, or mechanize, jobs that are not worth the minimum rate to them. Worst affected are the inexperienced young people, those with poor skills, and minorities."

Back in December, I wrote this piece when the word started going around that the Governor might support a hike in the state’s mandated wage.  Almost six months later I wrote this commentary, so this has been an issue of much angst for me.
 
State Senator Bob Dutton, in a column he penned for this website, said about a hike in the minimum wage:

Nothing, however, about increasing the minimum wage is compassionate for those it is intended to help – the poor. In fact, study after study has shown that increasing the minimum wage will do nothing but harm those who the raise is intended to help. At the same time it levies higher costs on small business – the kind of business not generally represented by the California Chamber of Commerce – forcing them to either cut back on staff or employee hours, or pass the cost on to the consumer.

In our featured Golden Pen column today (on the main page), which focuses on this faux argument that creating and raising government-mandated wages, Roger Koopman says, "In a free society, people must have the right to offer their services in the marketplace for whatever price they choose, whether they are workers serving employers or businesses serving consumers. It is by this process that productivity, wage rates, and prosperity are maximized. Government has no more business objecting to a low wage rate for a menial job than it has objecting to a business that offers its services or products for a low price. Government intervention in these matters distorts economic decision-making, misallocates scarce resources, and destroys personal liberty."
 
This is so true.  My Republican Governor signing off on this bill has served to remind me that the next couple of months will be a roller-coaster ride for sure.  On his worse policy day, Arnold Schwarzenegger is better on the issues than Phil Angelides (Angelides would have probably doubled the wage-mandate AND indexed it to inflation) but that really doesn’t make it any easier to accept that Arnold Schwarzenneger’s view of a limited role for Governor includes allowing politicians in Sacramento (himself included) to order all employers in the State of California to pay employees a government-mandated wage.
 
Yeah, I will still be working to re-elect the Governor this November.  But today I feel like I am suiting up for the defense, to keep Phil Angelides from scoring a win.  I can tell you that playing political football is a lot more fun when you have possession of the ball, and you can score a touchdown.
 
I’m sure that the political calculus is there – that this embrace of a wage-mandate is popular with the centrist voter, and maybe even center-right voter.  But for this conservative voter, it’s a tough pill to swallow.  And for this agreement to come out within 48 hours of the Governor’s call to Republican leaders for saying "NO!" to Governor control leaves me a bit cynical this afternoon.
 
Right about now is when I need Angelides to propose another billion or two in taxes.  It will remind me, once again, that playing defense IS important, after all.  Even though it isn’t nearly as fun.

Care to read comments, or make your own about today’s Daily Commentary?

Just click here to go to the FR Weblog, where this Commentary has its own blog post, and where you can read and make comments.