Posted on 12/14/2021 8:54:19 PM PST by SeekAndFind
Here we go again. The latest scheduled round of minimum-wage increases, to $15 per hour ($14 for small companies), starts Jan. 1. It hasn’t even gone into effect, yet calls are going out for a $18 wage. Why not $28? Or $58? Or $118?
Joe Sanberg, identified by the Sacramento Bee as a “Los Angeles anti-poverty activist and entrepreneur,” is working to put on the November 2022 ballot an initiative that would boost the minimum wage to $18 by 2025. Actually, a real, “anti-poverty activist” is anyone who favors America’s free-market system that has produced all the wealth in this country, including that used to help the poor.
Sanberg also seems not to have noticed all the Help Wanted signs throughout the state. Business owners tell me the current $14 an hour ($13 for small companies) minimum is just a “starting wage,” raised as soon as the employee gets to know the job and is adding value to the company.
Despite the current labor shortage, California’s unemployment rate remains, as it has been for two decades, at least 2 percentage points above the national average. According to the U.S. Bureau of Labor Statistics, in October California’s unemployment rate was 7.1 percent, tied for worst with Nevada. The national rate was 4.6 percent. That is, California’s rate was 2.5 points above the U.S. rate.
Let’s look at some rival states, all also enjoying zero state income tax, compared to California’s 13.3 percent top rate:
Texas has a minimum wage of $7.25, also the national rate. Unemployment is 5.4 percent.
Florida’s minimum wage is $10. Unemployment is 4.6 percent.
Tennessee’s minimum wage is $7.25. Unemployment is 4.2 percent.
It seems a low minimum wage combined with no state income tax is a lot better for getting people, especially the poor, jobs than is California’s formula of high taxes and a high minimum wage.
“Cost of living is rising faster and faster,” Sanberg explained as a major need for raising the wage rate, “but wages haven’t increased commensurately.”
But if wages are raised due to government decree, businesses will have to pay for that either with yet higher prices—or going out of business.
He also doesn’t take into account how inland California remains much cheaper than Coastal California. Yet a statewide minimum wage would force inland businesses to pay the same high wage already common on the coast.
A check of Zillow.com shows many homes available for $250,000 in Bakersfield—less than a quarter of asking prices in Orange County. In San Francisco and Silicon Valley, it’s even higher.
The late economist Walter Williams also pioneered research on how a high minimum wage hurts minorities the most. He said it’s like cutting off the first rung on a ladder, making it harder to get started upward. Young people especially are hit hard because they’re just starting out and don’t have much to offer, but are willing to learn; after which their wages will rise—or they will move to another job where they are paid more.
His study for Policy Review magazine was called “Government Sanctioned Restraints that Reduce Economic Opportunity for Minorities.”
Williams wrote, “The minimum wage law gives firms effective economic incentive to hire only the most productive employees which means that firms are less willing to hire and/or train the least productive, which includes teenagers and particularly minority teenagers. But holding all else constant, such as worker productivity, such a wage law gives firms the incentive to indulge in whatever preferences that they may hold.”
He noted how black youth unemployment in the 1940s and early 1950s actually was less than for white youth. In 1948, it was 9.4 percent for black kids, but 10.2 percent for white kids.
But then in the late 1950s, the minimum wage was increased by 33 percent, to $1 an hour. That pushed black youth unemployment above that for white youth, and it never has gone the other way since.
In November 2021, according to the St. Louis Fed, black youth unemployment (16 to 19 years old) nationally was 21.9 percent, almost double the 11.2 percent rate for all youth that age.
If Sanberg’s initiative makes it to the ballot, we can expect heavy support from the Democratic Party and unions, and opposition from the restaurant and hospitality industries. And if it passes, California will in yet another way become less hospitable to businesses and jobs creation.
why not make everything free?
they let thiefs take stuff for free now.
What a stupid article. Why not $118 per hour??? That is NOT a relevant question. That is an attempt to make the concept of a minimum wage look arbitrary and stupid. But let’s answer it! BECAUSE, it don’t take $118 per hour to pay for a minimal existence. Anybody with a pencil and a piece of paper can jot down what the average rent/home pmt is in an area, what the average minimal food cost is, what it would take for a cheap car, and gas, and insurance. Add in the other basic costs of living - get a total, and then divide by 160 hours per month or thereabouts. $15 per hour is about $600 gross per week (ASSUMING THAT YOU HAVE A FULL TIME JOB AND NOT A 28 HOUR PER WEEK SCREW THE WORKER JOB!)which comes out to about $30,000 per year, which would provide a basic living in most areas. Not NYC or San Francisco. You ain’t gonna get rich at $30,000 per year, Good Lord Willing, your transmissions doesn’t go out, or you need any sort of medical care. Gee, that wasn’t hard. I wonder how come some people don’t get it, and feel the need to avoid thinking about the issue in an intelligent fashion???
The market sets the price in a free society. Your top-down statist thinking never leads to the intended result. It is not the government’s lane to heavy hand struggling businesses which grow sick of dictates and do away with jobs that would be there except for the “benevolent” government.
Back when I was a teen and the minimum wage was $1.60 per hour I was working for Martin Theatres. I was paid fours dollars per shift which was the length of a feature film plus the start of the next film. If I stayed till the close of the last film I go one dollar extra. There were fringe benefits to the job and I also got all the popcorn and soft drinks I wanted. I could watch the house (which meant watching the film but keeping an eye out for smokers, etc.) and I could flirt with the box office girl or the concession girls. It was a great job. Then the government cracked down and Martin Theatres had to pay by the hour and not the shift. After that there were less jobs available for teens in Nashville’s Green Hills Theatre.
When I was an undergraduate at Western Kentucky University I worked every third night from 12:00 AM to 7:00 AM as a night clerk at Central Hall Girls Dormitory. I could pull all-nighters studying and I was being paid for it I could flirt with coeds and was being paid for it !!! But my presence added to the security of the building. I could buzz late arriving girls in. It was a great job. Later Western was in trouble for paying too little to student employees. What?!
I am not getting your response. If you were paid MORE than minimum wage, then what does that have to do with minimum wages??? Minimum wages are a FLOOR - a point BELOW which an employer may not go. Most employees do make more than minimum wage.
In both jobs I was making less than minimum wage.
If the film is two hours long, and there is the break between the first and second feature, and then one stays for the shutdown after the final feature for that one dollar extra. then one is making five dollars for about five hours of duty. Minimum wage was $1.60.
With inflation, what difference does it make?
The left just pulls these numbers out of thin air. The new gimmick is saying spending money costs nothing. Try that with your personal budget. Won’t fly with banks or CC companies.
I am sorry. I misread it as $4.00 per hour. My bad. OK, then you should be all in favor of minimum wages. I hope you got repaid the difference. Who ended up getting the difference between minimum wage and what you got paid???
“In November 2021, according to the St. Louis Fed, black youth unemployment (16 to 19 years old) nationally was 21.9 percent, almost double the 11.2 percent rate for all youth that age.”
That ends with “for all youth that age” not for all OTHER youth that age, meaning blacks are included in the total, meaning the gap between blacks and non-blacks is greater than the 10.7 percent difference in those numbers. Just how democRATs want things.
You’re not serious. You can’t be. Less jobs like the ones described are available when min wage enforcement happens. I was lucky I had such a job.
You want to say Martin Theatres were exploiting the proletariat?
You just don’t get it do you? You are dedicated to your simple math formula and central economic planning. I guess that is why the Soviet Union always had such a robust economy.
With idiots like Biden and his merry band of freaks and commies in charge, inflation is galloping away unchecked. And now this moron wants to raise the minimum wage? All that will do, in a heavily damaged COVID economy, is cause layoffs, and businesses to go under. But fools like this can only think “MORE MONEY!” and not consider the far reaching consequences. Go ahead parents, continue to send your kids to the public indoctrination centers our public schools have become.
Did you forget your sarcasm tag?
The concept of a minimum wage IS arbitrary and stupid.
While it may be a good ethical and moral practice, a business owner who hires someone to clean the premises is NOT responsible for the lifestyle of said employee.
And, we already have that., it’s called welfare, which used to be and still should be shameful.
Idjit ‘thinking’.
In some ways it’s like these gargantuan spending bills Sleepy Joe keeps coming up with. Or huge minimum wage increases.
Both roads lead to inflation.
As we saw yesterday, the news? Largest 1 year increase in wholesale goods…in History as in EVER.
Nowhere do you mention productivity.
The difference is with current conditions it becomes part of the hyperinflationary spiral. Everything is costing more already because of the failure of the Biden administration and poor FED policy.
The initial burst of inflation should have been transitory to compensate for basically a lost year of commerce. It should have topped out after 4 months-6 months at the latest. Instead, the government kept pumping money into the system causing many workers to stay on the sidelines. Some even retire out of the system, others participate in The Great Resignation thinking the higher wages will improve their financial standing never thinking the higher wages are not being offered due to the employees improved skill offers. Current conditions are not being managed at all within the American economy.
The report that the PPI from yesterday is up 26% is very bad. Actually worse than the Carter years. What the FED needs to do ...has never been done. These poor workers at near poverty wages are the canary in the coal mine. After a summer of the Great Resignation and difficulty hiring for service sector jobs, wage increases for 30-50% in many cases, seeing a demand for minimum wage to increase already indicates the hyperspiral has already started.
Macro-levers in the economy need to be pulled. And the sad thing about that is we have democrats in charge. Over the next 3 months we are going to really, really miss having Donald Trump in office. I just do not think the Democrats understand how to manage this economy from small businesses to the huge corporates.
I said for months, as wages rose not in comparison to experience/skill levels or competition, this was dangerously bad to have to compete with the federal unemployment system to get people back to work. Well, to the pay more crowd, is the canary still breathing, do we have time to stop the spiral, and can it be done without triggering a deflationary depression 6 months from now?
We are nearing the end of Phase 5 and entering into Phase 6 of the collapse of the entire system.
I would venture to say that if your post is not sarcasm you heavily fall in to the category of someone who "does not get it." Why not raise the minimum wage to $1000? People would pay $100 for the McDonalds hamburger! A "living wage" is the mantra of the socialist demoncrats to pit one group of people against another. The "rich" "evil" people are the problem. They don't want to pay the "working man" his wages or should we say "living wages?"
Wake up and smell the coffee. It doesn't matter what the minimum wage is set at!
Unfortunately, $18 will be nothing by 2025.
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