Helping The Poor By Hurting Them

Minimum WageIt appears that a $15 minimum wage will become law in California. Almost invariably, the rationale offered by proponents includes the assertion that it will help “the poor.” But, as labor economist Mark Wilson put it, “evidence from a large number of academic studies suggests that minimum wage increases don’t reduce poverty levels.
Beyond the host of logical and empirical issues involved in deciding whether a minimum wage bump will provide more income to “the poor” as a group, there is another ethical issue that never seems to get discussed. Even if low-income households did gain current income as a group in statistical studies, only individuals bear actual benefits or costs, and such wage mandates redistribute wealth away from many low-income individuals in the name of helping “the poor.” As a consequence, much of the desired help for the poor will actually come from others who are poor.
How can a requirement to pay low-skilled workers more harm low-income individuals? Some lose jobs. Others lose work hours. Further, for those who keep their jobs and hours, on-the-job training and fringe benefits will fall, and required effort will rise, to offset hiked wages. And higher current wages are often less valuable than what is given up, particularly on-the-job training that enables people to learn, and therefore earn, their way out of poverty. That is why labor force participation rates fall and quit rates rise when the minimum wage rises (an effect that will be heightened by the large magnitude of the current proposed hike), which is the opposite of what would happen if all workers who kept their jobs benefitted from higher mandated wages.Higher minimum wages will not only disadvantage the least skilled compared to automation and outsourcing possibilities, their increased cost will also force them to compete with more skilled labor. That explains why unions are the biggest backers of such measures — their members will gain from an increased demand for their services regardless of whether the poor gain or lose. But those with more limited skills will suffer from the undermining of their one big competitive advantage — a lower price. And those with the fewest skills, least education, and job experience will face the greatest employment losses now, as well as having rungs to advancement removed from their potential career ladders. These effects will be further magnified by the fact that employers pay far more than the minimum wage to those workers, through added costs for the employer half of Social Security and Medicare taxes, unemployment insurance taxes, worker’s compensation premiums, etc.

With a higher minimum wage, some of those low-income workers lucky enough to already have job experience and a work history will keep their jobs. Many others will simply find themselves to be unemployable. The main consequence will not be that the poor gain, but that some low-income households benefit at the expense of other low-income households.

Minimum wage hikes thus illustrate a very serious, though all-but-ignored issue. Even if poor people in the aggregate end up with higher incomes (a position far from established), it only means that one subset’s increased earnings will be at least somewhat greater that another likely to be even poorer subset’s decreased earnings, greatly harming many of them. And such government-imposed harm cannot be justified by the intent to help the poor.

Gary M. Galles is a professor of economics at Pepperdine University and research fellow with the Independent Institute. His books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).

Labor Unions, Legislature, Governor Reach Deal to Raise Minimum Wage

Minimum wage1Labor unions, legislative leaders and the governor came together on a minimum wage deal to presumably keep a minimum wage initiative off the ballot – presumably because there is more than one way to get on the ballot. More on that later.

The governor got what he wanted from the reported deal. Labor got pretty much what it wanted, albeit, with a slight delay. Details of the deal as reported in the Los Angeles Times include a 50-cent minimum wage increase for the next two years, hitting $1 a year after that, reaching the $15 mark by 2022, a year after the initiative planned. Businesses with 25 employees and less will have an extra year to adjust.

The hit on the General Fund will not be as great if the minimum wage increase to state workers is half what is proposed in the initiative. To some extent, that satisfies the governor’s office, which warned that a larger, faster increase in the minimum wage would put a heavy burden on the General Fund. State minimum wage workers would cost the state an additional $4 billion at $15 an hour according to the governor’s office.

Significantly for the governor, the immediate effect of the increase on the state budget is lessened and the full force of the deal comes into play once Governor Brown and his administration will be well into the history books.

Apparently, the business community and small business were not a part of the final negotiation and they don’t like the result. The business community raised concerns that the speedy wage climb to $15 and additional increases would hurt employment and threaten small businesses that survive on the margins.

Two issues the business community sought in minimum wage negotiations were a pre-emption for local government seeking their own $15 or higher minimum wage and preventing an automatic cost-of-living provision that would increase future minimum wage amounts to inflation. Reportedly, neither of those provisions made it into the negotiated settlement. The only reported provision to deal with economic uncertainties is power given to the governor for freezing minimum wage increases in economic downturns. The details are unclear.

If the deal is passed by the legislature and signed by the governor and the union is satisfied with all aspects of the plan, the already qualified initiative can be pulled from the ballot by proponents.

However, the minimum wage question could still find its way to the ballot by referendum.

If the business community objects to the final deal, a referendum gathering the necessary signatures would freeze the law passed by the legislature until the next scheduled election. Depending when the bill passes and is signed and when a referendum qualifies that referendum vote could be in 2016 or possibly 2018.

Is a referendum possible? Cost of signatures brought in by professional signature gatherers is prohibitive right now with many initiatives circulating. However, while labor said that a pre-emption of local minimum wage laws was a non-starter for any negotiated settlements, business made the same argument about the automatic cost-of-living issue.

If the negotiated settlement becomes law with no adjustments for business concerns, the business community will have to decide if it will take its argument to the voters.

The piece was originally published by Fox and Hounds Daily

Proposed Minimum Wage Hikes Hurt More Than Just Small Business

Minimum wage1Despite the heavy mudslinging and name-calling that never ceases to accompany an election year (this one clearly setting a new low standard), there’s one thing that Democrats, Republicans and persons of most every political persuasion are likely to agree upon: every red-blooded American deserves the right to and a fair shot at earning more money to realize their dreams.

Work hard, get paid, provide for one’s self and family – something our parents repeatedly hammered into our brains and a cornerstone of the red, white and blue capitalism that makes our country great. Every employee that has met minimum qualifications for a position deserves a reasonable “foot in the door” from day one – something that offers a temporary first plank from which to prove themselves to the employer, customers and workplace.

Now enter the Minimum Wage – a topic that is probably not foreign to you unless you’ve been hopelessly abandoned on the Red Planet a la Matt Damon. Labor unions are pushing the “Fight for $15” without first understanding the empirical data and repercussions of current minimum wage increases that have yet to fully manifest.

As with many government programs and activities that were created with the best intentions – think social security, welfare-to-work and state retirement systems – the minimum wage these days is spinning more out-of-control than The Donald in front of a microphone at an Iowa pep rally. Efforts to push, push, push for a higher minimum wage without seeing the existing ones take shape is making it impossible for small businesses and even many social programs to keep pace. And, at the end of the day, something – or more commonly, someone – will feel the negative fallout.

To put things into perspective, Californians have witnessed a 25 percent increase in the statewide minimum wage over the past two years – an increase from $8 to $9 in 2014, and another $1 increase, spiking it to $10 an hour, this past January.

Peering ahead and atop these already-dramatic increases, we’re witnessing other proposals and jurisdictions taking it even higher without knowing or seeing how the current increase in California will play out. Los Angeles and Santa Monica just hiked their local wage to $15, Long Beach to $13, Pasadena to $13.25 and Sacramento to $12.50. Add to that a legislative proposal to hike the minimum wage to $13 an hour and two measures aimed for the November ballot – one that would hike the wage to $15 over five years, and the second that would raise it to $15 over four years and add six days of mandated paid sick leave — and it leaves many asking “When is enough, enough?” as well as “Why the rush?”

Some in the Capitol and in many council chambers are heard uttering, “We can’t afford to wait – the time is now!” However, we must bear in mind that minimum wage hikes at any level that are too much, too fast, too soon will have negative consequences for many more than just small businesses in our communities.

Our policymakers need to take a careful look at other notable stakeholders that are very likely to be affected by a reckless, ill-conceived, rushed minimum wage increase policy:

In-Home Supportive Services (IHSS)/Persons with Disabilities

According to discussions with experts in the IHSS and disabilities community, a minimum wage hike will unquestionably be passed on to clients with disabilities because the resources simply aren’t there. There are over 300,000 IHSS workers in California, most of them unionized. This will be a higher cost to scores of private clients – yes, our most vulnerable patients – who are on a fixed income and they won’t be able to afford to sustain same level or duration of care. Counties, especially those in rural and disadvantaged regions, will tell you they simply won’t be able to absorb those costs. And keep in mind that many IHSS workers are family members of the clients and are likely to lose hours and in many cases health benefits because of this.

Many Californians with disabilities will be forced into institutions at a major cost to the state rather than keep them in their homes and having people care for them. To put a fine point on it, one person with special needs noted that their agency rate is about $200 a day for 24-hour in-home care, but for many it’s upwards of $350. He noted that a $5 an hour increase would be “a huge hit and for me and many disabled because that money simply isn’t there.”

Education

A representative from one Central Valley school district said a minimum wage increase of this magnitude would impact schools in two ways: (1) raising the wages of everyone who makes less than $15 currently; and (2) the compaction of the salary schedule that will create a ripple effect and force increases up the ladder and competition in the workforce. How can schools compete with others who are offering the same or more? While schools have received funding the past few years, that money isn’t appropriated in the future. By 2019, schools are expected revert to “cut-back mode.” What then? Unlike a small business, schools can’t raise prices on customers.

What are some examples of programs where reductions are likely?

  • Class size reductions
  • Hiring freezes such as grounds, maintenance, custodial staff, resulting in deterioration of facilities
  • Transportation cuts, resulting in decreased number of bus fleet runs and not enough drivers to transport students to events
  • Reduced technology dollars, resulting in network failures and computers and activities simply not there to meet the needs
  • Reduced work days
  • Reduced discretionary budgets for school sites – field trips, copy machines, etc – and other opportunities such as athletics or music.

Career Tech/Workforce Development Programs

According to a notable vocational education leader in California, these programs have already been decimated over the past thirty years, reducing the career prep they’ve been providing California students. Employers are facing untrained, undertrained workers with little or no job skills. Access to good programs is limited – with a minimum wage increase, this access will continue to decline. There will be fewer internships and work experience opportunities. The impact will be a further reduction or elimination in job readiness programs and opportunities for young workers, minority workers and low-skilled workers.

At the end of the day, school boards will face pressure on wage compression to drive wages higher. The boards can’t increase revenues so they must make cuts. The irony is that the very employees who get these raises will be among the first ones to be cut. It’s not just mom-and-pops singing the blues here.

Seniors

Seniors and retirees on fixed incomes are not likely to support any program to increase the minimum wage, as long as their own increase isn’t in the equation.

The federal government – in freezing any increase in social security – are stalling this direction, but maybe there will be a change one day.

Many seniors look for post-retirement jobs, but this would dry those up and edge seniors out of the market. And many others have made it clear that, on a fixed or limited income, they simply cannot afford a minimum wage increase in grocery stores and on the retail goods that sustain them. And remember, many of these individuals also will face higher costs with their in-home workers, making it impossible for them to keep them on their current schedules, thus lowering the quality and time of care.

We’ll all be there one day – why aren’t we thinking about this now before we all must face the grim realities of such pressures on the greying population?

Small Businesses – Our #1 Job Creators

Make no mistake – Main Street gets hit with such a hike, and when that happens, nobody wins. No matter how small and in which distressed neighborhood a small business may be, many politicians make the brash assertion that “You can foot the bill.” If someone has first-hand understanding running a California small business, they’ll tell you that’s simply not the case, especially with the thin operating margins most confront each day.

If unions truly cared about lifting the neediest out of poverty, they would fully embrace the “Total Earnings” concept, which allows employers to exempt from the minimum wage increase those employees already earning $20, $30, $40 or more, well north of the minimum wage in tips and commissions as total earnings/wages. This would actually allow employers to dedicate those scarce labor dollars to those employees who, as it was ruled this past week in the courts, are prohibited from sharing in tips – “heart of the house” employees such as prep cooks, line cooks and others. Why is labor pushing for such inequity – giving a wage increase to the highest-earning employees of a business while leaving those in the back, well,in the back and out to dry? Whose interest are they really looking out for?

The Governor was wise to recently criticize and warn against the two ballot measures that would increase the statewide minimum wage to $15 an hour, noting that they would cost the state as much as $4 billion a year by 2021 and return the state budget to annual deficits. The nonpartisan legislative analyst has noted that the first ballot measure proposal would result in “an increase to state and local government spending totaling billions of dollars per year”, with an independent fiscal analysis pegging this annual increase as high as $1.7 billion. Just last week, the American Enterprise Institute revealed the raw numbers revealed through evidence from the Bureau of Labor Statistics from the $15 minimum wage increase approved for Seattle by its City Council, with the first increase to $11 an hour taking effect on April 1, 2015. The effect of an eventual 58% increase in labor costs does not look pretty. Since that first phase of the increase went into effect:

  • Seattle’s employment has fallen by more than 11,000
  • The number of unemployed workers has risen by nearly 5,000
  • The city’s jobless rate has increased by more than 1 percentage point

Our policymakers and voters need to heed the Governor’s advice, nonpartisan state numbers, and data that’s trickling in from other cities that are now grappling with grim reality of these hikes before moving forward in any way. Let’s allow the ink to dry, dust to settle and current minimum wage policy – notably our statewide increase – to first play out so we can see what the impacts truly are. Otherwise, instead of branding it a “fair wage” we’ll all see it for what it truly is: a “fare wage”, with every one of us taxpayers – seniors, schools, disabled and many others – paying down an outrageous bill and debt for generations to come.

resident of Kabateck Strategies, and former CA Executive Director of NFIB

Originally published by Fox and Hounds Daily

New Year Brings Country’s Highest Minimum Wage to CA

Minimum WageCalifornia will start the new year with a record-setting wage floor.

“On Jan. 1 California will have the highest minimum wage in the country,” as Capital Public Radio noted. “California workers earning minimum wage will get an extra dollar an hour at the beginning of the year. The state raised the rate from $8 to $9 in July 2014. Soon it will be $10 an hour.” Legislation hiking the wage was sponsored by Assemblyman Luis Alejo, D-Salinas. According to Alejo, the increase would result in about $2,000 more net dollars over a year’s time working 40 hours a week at the new minimum wage.

A few other added benefits passed into law were set to take effect at the same time. “Workers will also be able to use job-protected leave to address child-care or school emergencies as of New Year’s Day,” CBS reported. According to data from the federal Bureau of Labor Statistics, the channel noted, the new rules were expected to impact over 9 million California workers at or below the $7.25 federal minimum wage. (This year, legislators made one additional change to state labor law, the station noted, requiring “the cheerleaders and dance teams of professional sports organizations such as the Los Angeles Lakers to be classified as employees.”)

Faced with setbacks in Congress, Democrats nationwide increased pressure on state legislatures this year to hike their minimum wages. But in California, their push gained even more traction at the municipal level. “According to the UC Berkeley Labor Center, there are 29 cities and counties in the United States that have wage floors higher than their state’s minimum,” the Bakersfield Californian observed. “Fourteen of those local governments are in California.”

Local blowback

But some Golden State municipalities have balked. A new city leadership in Desert Hot Springs killed an ambitious minimum wage ordinance that “would have hiked the minimum wage for such employers to $10.20 per hour next year, with $1 increases in each of the following two years and jumps tied to the consumer price index after that,” as the Desert Sun reported. “Unions and franchisees would have been exempt,” it added — unlike Walmart, which signaled it would re-evaluate its long-time plans to add a franchise in town if the wage proposal went through.

The Southland’s economic situation has become a bone of political contention this election season, with Lt. Gov. Gavin Newsom taking heat for already pushing a $15 minimum wage statewide. “Labor markets in Imperial County, for example, already struggle to supply even more-experienced job-seekers with work,” wrote Michael Saltsman in a column for the Orange County Register. “The unemployment rate for all employees hovers around 22 percent. Across all occupations, the median hourly wage is $13.79. Even supporters of a higher minimum wage are uncomfortable with a wage floor that’s much higher than half of the median wage, which means $15 would be economic suicide for Imperial County.”

Replacing workers

Critics of dramatic increases in the state minimum have long contended that their impact includes cutbacks on hiring. “In an analysis of Los Angeles’ wage hike commissioned by the Los Angeles Chamber of Commerce, Beacon Economics argued the wage ordinance could lead to businesses employing fewer low-wage workers, resulting in a higher unemployment rate among unskilled workers,” as the Californian observed. But now, concerns about the outright replacement of workers by machines have been added to the mix. “Employer groups opposed to raising the minimum wage say labor costs are already driving decisions to replace human labor with technology,” KPCC reported. “They say higher minimum wages will accelerate automation trends in the workplace.”

Richard LoGuercio, president of an event rentals company in Van Nuys, told KPCC he was “just screwed” with the fast hike, although he supported gradual increases in the minimum wage. “After the minimum wage ordinance was approved, LoGuercio invested in a $150,000 industrial dishwasher he had been eyeing to save on utility costs,” the station recounted. “The machine will also allow him to stop paying six to eight people who earn $10 to $11 an hour washing dishes. LoGuercio expects to recoup his costs in nine months, and save a couple of hundred thousand dollars a year going forward.”

Originally published by CalWatchdog.com

Fight for $15 Hits Setback in Unexpected City

Minimum wage1In a huge setback to $15 minimum-wage supporters, voters in Portland, Maine rejected a proposal Tuesday to enact the policy in their city.

City residents voted nearly 58 to 42 percent against the increase. The city ordinance was designed to phase in over time. The Portland Green Independent Committee fought to get it on the ballot. While advocates argued it would help low-wage workers, critics warned it could severely limit job opportunities.

Right now I’m feeling a huge sense of relief for every small business owner in Portland, and everyone who works for me,” Play It Again Sports Owners Scott Rousseau said, according to Portland Press Herald. “I think it’s great news for the future of our city.”

Critics warn businesses would have few options to offset the added cost of labor– they could increase prices or hire less workers. In some cases, the businesses could have to close. The potential problem is especially true for low-profit industries like restaurants. Supporters, however, say the increase would allow more people to afford basic necessities. The increased spending would then stimulate economic growth.

Seattle led the way in passing the $15 minimum wage back in June 2014. San Francisco and Los Angeles followed not long after. Each local ordinance phased in the new wage over the course of several years. Some Seattle businesses, though, have reported problems because of the increase.

Much of the debate boiled down to rival media campaigns. Patriotic Millionaires launched ads in support of a $15 minimum on television, as well as online. The group normally fights for minimum wage increases on the national level. Its latest advertisements latest advertisements focusing on Maine premiered Monday. The Portland Regional Chamber has been opposing the policy with its own media campaign.

Nationwide, the group Fight for $15 has led much of the effort. The group is backed by the Service Employees International Union (SEIU). Conservative opposition research group AR Squared (AR2) alleges that the push is more about helping the union as opposed to low-wage workers.

“By voting against a $15 minimum wage, voters in Portland, Maine sided with their local businesses and rejected the SEIU’s effort to increase its membership rolls,” AR2 Communications Director Natalie Gillam said in a statement to The Daily Caller News Foundation. “From Portland to the Clinton HQ in Brooklyn, yesterday was a bad day for union bosses at SEIU in D.C.”

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Originally published by the Daily Caller News Foundation

UC system minimum wage increases to $13 per hour

As reported by the San Jose Mercury News:

The University of California’s plan to raise the minimum wage for all workers systemwide took effect Thursday, the first of three incremental raises expected to bring wages to at least $15 an hour by 2017.

The minimum wage rose to $13 an hour for all university employees hired to work 20 hours or more a week. It will be increased to $14 an hour on Oct. 1, 2016, and to $15 an hour on the same day in 2017.

UC president Janet Napolitano announced the voluntary minimum wage increase in July, the first of its kind to be established by a public university.

Click here to read the full article

What Unions Really Think Of The $15 Minimum Wage

Minimum wage1The Employment Policies Institute (EPI) released multiple ads Tuesday criticizing union leaders for seeking an exemption to their own $15 minimum wage proposal in Santa Monica.

The ads included a newspaper spot and mobile billboard. They called the request for an exemption hypocrisy. Unions have been at the forefront of pushing for the Santa Monica minimum wage proposal. Union leader like Rusty Hicks have also been pushing an exemption to the proposal for unionized workers.

“Labor boss Rusty Hicks was criticized nationwide after he tried to sneak a union exemption to a minimum wage bill he pushed in Los Angeles,” the ad declared. “Now, he’s at it again in Santa Monica.”

Hicks also sought an exemption when his own city of Los Angeles voted in May to increase its wages to at least $15 an hour. This despite him leading the coalition behind getting the measure passed. Despite national criticism, Hicks has since moved on to encourage other cities to increase their wages while exempting unions.

“I think they should ask themselves what’s the motivation,” EPI Research Director Michael Saltsman told The Daily Caller News Foundation. “Are unions supporting this just to help themselves and boosts their own ranks.”

Hicks has defended his stance. He argued both the $15 minimum wage and an exemption for unions will help workers.

“This clause preserves and protects basic worker rights and that is why nearly every city in California that has ever passed a minimum wage ordinance has included these protections,” Hicks said back in May. “I would never do anything to undermine the rights of any worker.”

Even other union leaders have criticized Hicks for wanting an exemption while continuing to advocate for a higher minimum wage. David Rolf, president of Local 775 of the Service Employees International Union, questioned the justification behind the request.

Despite this, it is not at all unusual for unions to opt out of laws which raise the minimum wage. According to a report released by the U.S. Chamber of Commerce last December, many labor unions are exempt from the various local minimum wage laws they support.

“Not all minimum wage increases come in the same form,” the report notes. “Some local ordinances in particular include an exemption for employers that enter into a collective bargaining agreement with a union.”

The report details how these “escape clauses” are often designed to encourage unionization because they make membership a low-cost alternative for employers. This raises questions about who these minimum wage laws are actually meant to help, according to the report.

Originally published by the Daily Caller News Foundation

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San Jose joins forces with seven other cities to raise minimum wage

As reported by the San Jose Mercury News:

SAN JOSE — Top officials from seven Bay Area cities will join Mayor Sam Liccardo on Thursday to announce an unprecedented joint venture to raise the minimum wage across the valley in a regional effort to close the growing gap between the rich and the poor in Silicon Valley.

The official announcement is expected in a news conference Thursday. The mayors of Campbell, Palo Alto, Cupertino, Milpitas, Morgan Hill, Monte Sereno and a representative from the city of Santa Clara are expected to announce their support for the initiative.

It’s the first time the region has seen such a large collective effort by multiple cities to raise wages. …

Click here to read the full story

CA Cities Engage in Minimum Wage Arms Race

Minimum WageForging ahead with plans to take minimum wages to new highs, California’s San Francisco Bay Area has touched off tit-for-tat increases, deepening fears that the region’s high cost of living has become a business-killer.

A growing dilemma

“Berkeley’s City Council approved a hike in June 2014 that will lift the minimum wage to $12.53 by next year,” the Los Angeles Times noted. “In November, voters in San Francisco and Oakland overwhelmingly approved increases, with San Francisco on track to hit $15 before Seattle does. Oakland went up to $12.25 this year.” Then, last month, nearby Emeryville surpassed Berkeley and Oakland with a $14.44 wage; “Berkeley sent its labor commission back to the drawing board. The council next month is expected to take up a proposal that would add paid sick days, extend wage hikes until they hit $19 in 2020 and then add cost-of-living increases in perpetuity.”

The upshot for businesses has been mixed at best: although some employers have crafted clever strategies for adding more value for customers, others have worried the path is unsustainable. “The necessity of paying people a living wage in the Bay Area is clear, so it’s hard to argue against it, and it’s something I’m really proud to be able to try doing,” one pizzeria owner told the Times. “At the same time, I’m terrified of going out of business after 18 years.”

As big wage increases have been passed into law across California, business interests haven’t always been the only ones to pump the brakes. In Los Angeles, where the city minimum is a $15 wage, critics of the increases howled when labor advocates wound up asking for a waiver on the eve of its passage. “The exemption was left out of the law’s final version after criticism from the local chamber of commerce and business groups,” noted the Wall Street Journal. “But similar exemptions are included in at least three other Los Angeles laws, including a minimum wage for hotel workers approved last year.”

Recalibrating business

Although California has led the country in grappling with stagnant wages and rising costs of living, the turn toward higher minimum wages has touched off broad debates across the country. Hospitality businesses such as the hotel industry have faced a particular challenge as wages have climbed upward. For years, bar and restaurant groups have lobbied policymakers to think twice, warning that dramatically hiking wages would undermine their business models, which politicians and analysts have often built into their assumptions about jobs and economic health.

“The problem with the minimum-wage offensive is that it throws the accounting of the restaurant industry totally upside down,” as Harold Miller, a restaurant consultant currently serving as vice president for franchise development at Persona Pizzeria, told the Chicago Tribune.

In tech-forward areas with high costs of living and high rents, the threat to the hospitality business model has accelerated the shift toward increased automation and decreased employment rolls.

Stalling statewide

Some California employers have set out to recalibrate their work forces, hoping that a shift to more temporary workers could blunt the economic impact of wage increases. But the political impact of such a shift has also become a problem. Faced with criticism over differential treatment between contract and career employees, the University of California system offered a $15 “minimum wage” set to apply to thousands of contract workers on a private, not public, payroll.

UC unions were still left cold. “Private contract firms will still make as much as $10 an hour or more in profit off the labor of workers being denied the same wages as UC workers doing the same jobs,” wrote the president of the system’s largest employee union in the San Francisco Chronicle. “UC could choose to send a different message by supporting SB376,” she argued, “legislation that would guarantee the employees of UC contractors equal pay as career employees doing the same work.” That bill was authored this spring by state Sen. Ricardo Lara, D-Bell Gardens.

But the latest Golden State bellwether, a bill creating a statewide $13 wage introduced by state Sen. Mark Leno, D-San Francisco, could signal that the minimum wage wave may be cresting. As the Sacramento Business Journal observed, Leno’s effort “moved farther than it did last year, but the bill’s fate is far from assured.” Although Gov. Jerry Brown has “proposed to tackle income inequality this year through an earned income tax credit,” he has declined to comment on the push for a $13 wage — letting a skeptical Department of Finance speak for him.

Long Beach Could Be Next In $15 Minimum Wage Movement

Minimum wage1In the past year the movement to raise the minimum wage to $15 an hour has seen success in a few major cities – and now several more are looking to be next.

Seattle led the way in implementing a $15 minimum wage back in June 2014. San Francisco and Los Angeles followed not long after. Each local ordinance phased in the new wage over the course of several years. Though it has yet to pass on the state or federal level, the movement has seen support across the country.

Still early on in the process, officials in Washington, D.C., Kansas City, Mo., and Long Beach, Calif., are considering whether they should adopt a $15 minimum wage as well. Earlier in the month, Long Beach announced it may initiate a study of the potential impact such an increase would have. The Kansas City Star reported Thursday that the Kansas City Council may seek voter input on the November ballot. D.C. announced last month it will test the waters with a ballot measure as well. New York City is also considering whether to implement a $15 minimum wage, but just for fast-food workers.

In addition to the cities that have already passed a $15 minimum wage, the University of California announced last month that the school will become the first public university to raise the on-campus minimum wage to $15 an hour. Democratic presidential hopeful and self-described socialist Bernie Sanders has even introduced a bill to raise the federal minimum wage to $15 an hour.

Supporters of the $15 minimum wage often claim it will help the poor and stimulate economic activity. They argue that it’s more representative of “the living wage,” which is the supposed basic standard by which someone can live comfortably.

Opponents, however, say the idea will actually hurt the poor by limiting job opportunities. How little or how much of either outcome usually depends on the study. Nevertheless, even the nonpartisan Congressional Budget Office agrees at least some job loss is expected.

By organizing rallies and utilizing media marketing campaigns, Fight for $15 has led much of the effort to raise the minimum wage in the last couple of years. Though claiming to be a grassroots workers movement, the group is highly influenced and funded by the Service Employees International Union.

The SEIU has been criticized by some, like Worker Center Watch, for using the Fight for $15 protests as a way of bypassing labor laws to more easily unionize fast food workersAccording to a report from the Center for Union Facts, a minimum wage increase would benefit the SEIU directly while hurting non-unionized SEIU competitors.

Additionally, unions often seek exemptions from the very minimum wage laws they support. According to the report, “Labor’s Minimum Wage Exemption,” which was released by the U.S. Chamber of Commerce in December, this is to encourage unionization by making membership a low cost alternative for employers. Los Angeles union leader Rusty Hicks was accused of just that when asked for an exemption for unionized businesses from the very wage increase he advocates for. Now he is pushing for Long Beach to go forward with its own increase.

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